The future of value creation and exchange will know no national boundaries and jurisdictions. They will all be ecosystem specific. Therefore, all use cases need to be ecosystem-specific.
The future for DeFi, GameFi and SocialFi may be embedded. But, this embedding can only be implemented in a well-oiled ecosystem. The Metaverse that brings these user functions together will not only have experiential elements but also utilitarian and gamification elements.
For instance, a metaverse in which DeFi can be applicable will need to have opportunities for microtransactions. A metaverse in which SocialFi can be embedded will need to have an ecosystem that has creators and consumers contributing, being compensated and acknowledged for these contributions.
Let us now look at what we could see as embedded DeFi. Many of these have already been implemented in several metaverses.
As this space evolves, we see microtransactions, nonfungible token (NFT)-based lending, rental mechanisms, NFT marketplaces, micro token economies, token exchanges and many more bells and whistles that will support the Metaverse economy. Each of these features have their purpose in establishing a scalable economic model within the Metaverse.
For instance, Ecommerce within the Metaverse is already being tried in several ecosystems. Imagine a user with a good bag of NFTs, going into an art gallery. The art is expensive, and the user is short of liquidity. If NFT-lending has been integrated, the user could use their Ape or Punk to borrow some USDC to buy the art.
In the scenario described above, the user interface is extremely important in making the transaction frictionless. In the above example, instead of an Ape, if the ecosystem has a native NFT, that could be used more seamlessly. These NFTs will be more valuable as the user spends more time in the ecosystem — particularly if there are mechanisms by which they can be leveled up.
As users invest more time and effort in upgrading the value of their ecosystem assets like NFTs, land or in-game assets, these assets will play an important role in DeFi elements, which the user can leverage.
The term GameFi is often used in the context of large play-to-earn platforms like Axie Infinity. Yet, in many instances, gamifying an experience is as important as GameFi. Often, these features do not need to be intense Fortnite style gaming experiences. They can use casual games, leaderboards, loot boxes, battle passes and raffles to provide gamified experiences.
Much like DeFi components that add value to the economic model, GameFi elements are not only helpful in increasing user retention, but also critical to keeping users engaged and invested in the platform.
Components of GameFi rely on both DeFi and SocialFi to succeed. For instance, those who want to be part of a leaderboard can borrow or rent an NFT to participate. On a similar note, the leaderboards are only effective if the SocialFi elements are built with gamers and creators in mind.
Last but not least, SocialFi keeps the soul of the creator’s economy intact in a metaverse implementation. A metaverse often involves various stakeholders: asset creators, asset holders, gamers and/or users. A sustainable model is achieved when all these stakeholders or economic actors are incentivized proportional to the value they add.
This is often where gamifying the experience interacts with SocialFi principles. For instance, gamers who play and win consistently go up the ladder within the ecosystem. As a result, they will accumulate experience points. Similarly, creators whose assets perform well in the ecosystem will be rated highly.
This form of “social swag” is also critical in DeFi transactions. Creators and gamers with social scores or experience points can get better deals when they tap into the DeFi components of the Metaverse. More social swag allows economic participants to accrue value within the ecosystem faster.
Most of these activities within the Metaverse are on-chain, and concepts like soul-bound tokens can also be used to build credibility within a Metaverse economy.