Virtual Asset Entrance Ticket: Why is NFT the Foundation of the Metaverse?

Have you ever wondered why some people are willing to spend thousands of dollars to buy a virtual artwork but hesitate to spend the same amount on a game skin? The secret lies in a subtle yet super important thing—NFT.

The Metaverse is not a distant sci-fi; you’re already experiencing it

Remember the virtual world “OASIS” in Ready Player One? In fact, you’ve already been exposed to virtual spaces. When you spend money on LINE stickers, or use Bear Big GIFs to tease elders in family groups, it’s essentially the same as buying virtual land in Decentraland—both are about spending money on virtual assets.

What’s the difference? The former is renting server usage rights, while the latter is truly owning a digital asset that you can take with you. This is the core meaning of the Metaverse.

The concept of the Metaverse originated from the 1992 sci-fi novel Snow Crash, depicting a parallel virtual world to reality. Today, its definition is broader: It is a virtual space filled with visual content where people work, entertain, shop, and socialize—all built on blockchain and NFT technology.

NFT is the key to the Metaverse

NFTs (Non-Fungible Tokens) are blockchain-based digital assets that serve as a “counterfeit-proof ID” for everything in the Metaverse.

Imagine what a Metaverse without NFTs would look like:

• Purchased game items can’t be resold? Their value is stuck on the server, no different from waste paper
• Virtual clothes designed can only be worn by yourself? No commercial opportunities
• Hard-earned virtual houses get taken down by the platform? Assets instantly become worthless

The immutability of blockchain makes NFTs truly belong to you. Traditional digital assets can be arbitrarily modified, deleted, or frozen by platforms, but NFTs are different—they have ownership records on the blockchain and can be freely traded across multiple markets.

The frenzy and reality during the boom of the Metaverse

Talking about the impact of the Metaverse on the crypto market, it’s a double-edged sword—prosperity and decline go hand in hand.

In the last bull market, Decentraland and The Sandbox, two Metaverse projects, sparked a buying frenzy for virtual land. MANA tokens surged by 4,100% in 2021, far exceeding Bitcoin’s growth during the same period. The virtual land in The Sandbox was even more outrageous—rising from an average of 1,000 yuan to 45,000 yuan, surpassing Taipei real estate prices.

But bull markets don’t last forever. As the crypto market peaked and declined, the floor prices of these Metaverse projects kept hitting new lows, with 50% drops becoming common. Some niche projects even saw zero trading volume, completely abandoned, impossible to sell.

The lesson is clear: Although the prospects of the Metaverse are promising, current liquidity shortages are a fatal weakness.

How can beginners safely participate in the Metaverse?

For ordinary people, creating a Metaverse project directly is too difficult. The most practical approach is to buy and trade NFTs or related tokens. The process is actually quite simple.

Step 1: Choose a trading platform

Opensea is currently the most mainstream NFT trading platform, feature-rich and with a mature ecosystem. (Other platforms are similar in function and principle.)

Step 2: Prepare a digital wallet

The most common is MetaMask, used to connect to trading platforms and perform buying, selling, and transferring. After downloading and logging into the Opensea official site, click “Connect Wallet” in the top right corner, and follow the steps to create an account (no account opening fee).

Step 3: Recharge with cryptocurrency

You need to buy Ethereum (ETH) or other cryptocurrencies, which can be purchased through mainstream exchanges and transferred into your digital wallet.

Step 4: Buy NFTs

Enter Opensea, select promising NFT projects, and complete the purchase as instructed. If the floor price is too high, you can participate in auctions—auction prices are usually below the floor price, offering opportunities to snag bargains, but beware of significant losses.

Step 5: Sell for profit or cut losses

Find your NFT in your profile, choose to list it for sale or participate in an auction. Set the price and duration, then list it. When someone buys, you get the corresponding crypto. If you want to exit quickly, you can also accept lower offers (usually below market floor price).

3 safety warnings every beginner in the Metaverse should know

• Never input your private key on unfamiliar platforms (private key = bank password, this can never be compromised)
• Don’t use the same password for different accounts (to prevent total account loss if one is hacked)
• Be cautious of “guaranteed profit” NFT airdrop ads (99% are scams)

Investment advice for beginners

The entry barrier for Metaverse/NFT investments is obvious, and overall liquidity is still insufficient. Many projects face the risk of no buyers. For newcomers, small-scale testing is wise.

More importantly, beware of projects claiming “Metaverse” but lacking real-world application—these are purely hype-driven. Once market enthusiasm fades, prices will plummet sharply. If you don’t understand a project well, it’s best not to touch it.

Compare Metaverse/NFT investments with other investment methods: although Metaverse investments are flexible and volatile, they have poor liquidity and no short-selling; crypto investments have lower thresholds and support leverage, but project quality varies; futures and stocks are strictly regulated but may have limited upside and profits. Each has pros and cons; choose based on your risk tolerance.

Where are the long-term opportunities in the Metaverse?

Although the market is currently sluggish, the long-term potential of the Metaverse remains significant. Tech giants like Meta (formerly Facebook), Microsoft, and Google are increasing investments, indicating the overall direction is positive.

Technologically, virtual reality and artificial intelligence will become core drivers of the Metaverse. Economically, the share of virtual economy will continue to expand, with new business models and industry chains potentially taking root. In short, the Metaverse is expected to change how people live, socialize, and interact economically.

NFTs are also expected to evolve continuously, with more forms and supporting models emerging. Improved legal frameworks will lower entry barriers and reduce misconduct.

Common questions and answers

Are the Metaverse and NFTs scams?

Not risk-free, but mainstream and well-known Metaverse projects have real applications, not just marketing hype. As recognized development directions by mainstream capital, the Metaverse remains a target for technological innovation.

Is investing in the Metaverse risky?

All investments carry risks. The Metaverse is no exception. If you blindly participate in some seemingly cheap but essentially air projects, risks are high. But since NFT investments don’t support leverage, with basic trading discipline and risk awareness, and sufficient liquidity, you can freely enter and exit.

Bottom line: do your homework, control risks, and avoid heavy positions.