Facebook, now a subsidiary of Meta Platforms (NASDAQ:META), has taken the plunge and gone all-in with its recent “metaverse” rebranding. Metaverse refers to a second version of the Internet. This is where 3D environments are the norms for immersive social sharing. It involves NFTs (non-fungible tokens), virtual landscapes and realities, games, 3D avatars, metaverse cryptos, tokens, rewards, airdrops, decentralized apps (Dapps) and smart contracts.
But mostly it involves an alternative to the existing real universe. It is a “collection of open worlds and settings joined by interoperable assets and experience,” according to Decrypt online magazine. As the Wall Street Journal describes it:
“A virtual world featuring avatars, digital objects and functioning economies is a world where technology is all encompassing and not simply a discrete tool.“
People are now buying, acquiring, selling, and trading land, condos, money, clothes and more in the metaverse. And these are rising in value, either on exchanges or in games, either in real dollars or in metaverse cryptos. These rising crypto prices are just one manifestation of this alternative reality.
The metaverse certainly has its detractors as well. Barron’s magazine quotes a Jefferies analyst this week who says that NFTs (non-fungible tokens) could reach $25 billion in the very near term. Barron’s calls it a “weird” time in finance now. The Wall Street Journal says that the virtual world will have its real problems.
Sales of virtual world paraphernalia will be required and only a few companies like Facebook and Microsoft (NASDAQ:MSFT) sell them, but other companies, including Apple (NASDAQ:AAPL) are racing to catch up.
As a result, I thought it might be interesting to look at seven up-and-coming metaverse cryptos that might potentially be worthwhile investments. But they also have huge risks and investors could end up losing all their investments.
Some of these have very small market caps. That can both be a huge risk, as they are the moral equivalent of penny stocks in the stock market. But they also could have huge upside opportunities. These cryptos are in the process of creating their own virtual world platforms.
Just keep in mind that these are all highly speculative and not for the faint of heart. Moreover, I am not recommending any of these cryptos. Investors should evaluate their own personal investment situation to see if the volatility risks are worth the potential rewards, if at all.
Let’s dive into these metaverse cryptos:
- Decentraland (CCC:MANA-USD)
- The Sandbox (CCC:SAND-USD)
- Floki-Inu (CCC:FLOKI-USD)
- Efinity Token (CCC:EFI-USD)
- Terra Virtua Kolect (CCC:TVK-USD)
- Epik Prime (CCC:EPIK-USD)
- Highstreet (CCC:HIGH-USD)
Interesting Metaverse Cryptos: Decentraland (MANA-USD)
Market Cap: $4.5 billion
Decentraland is a crypto-powered virtual reality game or more correctly a virtual living platform written on the Ethereum (CCC:ETH-USD) blockchain. Using MANA tokens you can purchase land, outfits, scenes, and a host of other virtual assets. Some of these can grow to great value and you can later sell them to others, so in effect, it becomes an alternative reality. In effect, it is a “world owned by users.”
MANA tokens are now trading for $2.50 after spending a long time below $1.00. The Facebook move to virtual reality has sparked huge interest in this cryptocurrency and its associated reality. Recently in late October, the site held the first-ever Metaverse Festival from Oct. 21 to Oct. 24.
Everything in Decentraland is divided into parcels of LAND. Some parcels are further organized into themed communities or Districts. They have common interests and uses.
Decentraland is still under active development and is continually changing. The value of MANA tokens reflects the increased interest and popularity of the Decentraland virtual world.
The Sandbox (SAND-USD)
Market Cap: $2.2 billion
The Sandbox is another virtual world where people can “build, own, and monetize their gaming experiences.” It is a virtual metaverse owned by its users. Ownership of assets in the game comes in the form of NFTs (non-fungible tokens).
The game was acquired by Animoca Brands in 2018 (based in Hong Kong) and converted into it an Ethereum-based blockchain game where users could monetize their in-game creations.
On Nov. 1, Reuters reported that Softbank’s Vision Fund 2 led a group of investors who put $93 million into the gaming platform. This was after monthly active users exceeded $144 million in transaction volume on the platform.
Arthur Madrid, CEO of The Sandbox, said this will get it beyond gaming into fashion, architecture, virtual concerts and shows, art galleries, museums and more, according to Venturebeat.
The site has also partnered with celebrities to increase its popularity. For example, Snoop Dogg made a digital replica of his mansion on the site.
Reuters reports that Animoca Brands owns 20% of its $2. 4 billion worth of SAND tokens, prior to the latest investment round.
Interesting Metaverse Cryptos: Floki Inu (FLOKI-USD)
Market Cap: $2.2 billion
Floki Inu was started as a joke based on the name of Elon Musk’s Shiba dog he named Floki. But since then, the company has created a virtual panoply of cryptos, a university and is developing a game based on an alternative reality.
The crypto is typical of “meme coins.” That is, it’s a crypto with no meaning, no purpose, no raison d’être. Its purpose it to take advantage of a craze.
However, recently the backers behind Floki crypto began offering users a sneak peek at its upcoming NFT-based metaverse game. The game’s name is Vahalla. One of the in-game characters for the universe would be none other than Elon Musk.
The meme coin will begin a TV marketing campaign starting during the first week of December and run through Christmas. The idea behind the ad campaign is to get people to buy Floki tokens as an alternative to owning Dogecoin (CCC:DOGE-USD).
In effect, the implied hook is that this crypto will run-up in value just like Dogecoin did. Dogecoin now has a market value of $34.5 billion and is the ninth largest crypto out there, based on Coinmarketcap.com stats. If this were to happen, the FLOKI crypto price would be over 15 times its present price (i.e., $34.5 billion/$2.2 billion mkt cap).
Obviously, there is no guarantee this will happen, so this remains a highly speculative coin. However, the backing team seems to have a well-thought-out marketing plan to give FLOKI real value.
Efinity Token (EFI-USD)
Market Cap: $86 million
Efinity bills itself as a “next-generation blockchain for NFTs.” It is next-generation since it is a scalable, decentralized, cross-chain network. It is built on the Polkadot (CCC:DOT-USD) blockchain network as a parachain startup, with just $500 million in trading volume as of March 2021.
Efinity claims it is unique in three ways. First, any NFT can move to Efinity’s marketplace from any site. In addition, the highest unfilled NFT order is able to earn token rewards.
Second, Efinity helps businesses reward their loyal users/customers via a new blockchain feature called Recipes. Recipes allow anyone to modify or create existing or new NFTs. The unique feature is that it does not require any coding to do any of this.
Third, its governance allows anyone who joins the network to be able to propose and vote on changes.
Interesting Metaverse Cryptos: Terra Virtua Kolect (TVK-USD)
Market Cap: $202 million
Founded in London in 2016 by two entrepreneurs, Terra Virtua bills itself as “a fully immersive, blockchain-driven VR entertainment experience.” Originally started as a blockchain game, it is now deeply involved in NFTs, including a marketplace for digital art and collectible NFTs, a gaming environment, and a token called the Terra Virtua Kolect token.
But its foray into hookups with Hollywood studios is what it is known for recently. Terra Virtua finalized deals with Paramount Pictures and Legendary Entertainment. They will license some of their most popular films and brands on their platform.
The company claims to have 120 designers, engineers, 3D modelers, artists, and developers working on its NFT marketplace. It also claims to have over 30 million downloads of mobile games from its site and its mobile app.
The company’s TVK tokens now trade on Binance, which should help increase its popularity over the long run.
Epik Prime (EPIK-USD)
Market Cap: $49 million
Epik Prime started producing “premium digital items” in 2018. The team felt these digital items would be the “future of consumer products and would play a central role in ownership.” The company claims to be the global leader in bringing brands into video games and producing unique in-game items, events and experiences.
The company’s token launched in Aug. 2021 in partnership with Huobi Global and its Huobi Prime program. It’s a program that introduces new, cutting-edge tokens to cryptocurrency traders, according to Cointelegraph.com. Being part of the program ensures that Huobi has completed due diligence on the company and its new token listing.
Epik’s focus on helping gaming companies create NFTs and in-game collectible assets set it apart from other metaverse crypto tokens. For example, it recently signed a deal with Ready Games, a “no-code” game developer as the gaming company’s NFT technology solutions partner.
Interesting Metaverse Cryptos: Highstreet (HIGH-USD)
Market Cap: $69 million
Highstreet is a metaverse blockchain gaming company with an MMORPG (massively-multiplayer online role-playing game) game where players can fight monsters and complete quests. In addition, it is starting a new type of NFT marketplace where “physical products are traded as nonfungible tokens, or NFTs, in a fully open phygital experience.”
This company recently raised a second investment from both Binance Labs and Animoca Brands (see The Sandbox above) for $5 million in funding.
Binance indicated that Highstreet will integrate with the Binance NFT Marketplace. This is Binance’s NFT portal for buying and selling NFTs.
Obviously given its early funding round, this is a more speculative NFT metaverse token, so investors should take some caution.
Conclusion: Metaverse Cryptos
These seven metaverse cryptos are riding a wave of enthusiasm in NFTs, metaverse assets, and second and third versions of crypto assets. Some of these are fairly small and so investors should exercise some caution and conduct complete due diligence before investing in any of them.
As always, my analysis is not investment advice and I am relying on the Publisher’s exclusion in the Investment Advisors Act of 1940 in writing about these highly speculative securities.
On the date of publication, Mark R. Hake held a LONG position in FLOKI-USD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.