The emerging technology behind the web3 version of the internet can produce and provide more changes in how we use and interact with the internet than what we are currently witnessing at the moment. The possibilities and potential of this technology can be seen in what is happening at the moment. Let’s take a look at some narratives in the crypto industry to be specific and the internet at large.
Blockchain technology and Satoshi Nakamoto’s proof of work mechanism cause the start of internet money and keep evolving to become a creator’s economy. These innovation steps lead to the designing of different blockchain projects to solve the problem of mass adoption of blockchain technology which are scalability, security, and most importantly decentralization. The main focus of the rest of this post will be dependent on the subject of decentralization.
As technology emerges, different problem leads to different innovations to counter them. one of these innovations is DEFI, which will lead us to a full understanding of the concept METAFI. The term Defi which means decentralized finance represent financial services without the impact and interference of centralized platforms or middleman. Defi in simple terms means performing different financial services like trading, borrowing, lending, saving, and any other financial services without any form of a third party.
The underlying technology behind Defi is a smart contract, which is a form of rules encrypted in a form of a code and gets executed when the criteria have been met. It is in a form of “If, and then”. When the rule has been met, it triggers the smart contract to be executed. Hence, removing the need for a centralized party and replacing it with codes that must meet the agreement before it can perform its task. Defi is constantly evolving and it can meet a new use case when it is combined with the META.
The formation of the word is the combination of two different subjects META+FI. Where FI represents Defi and META represents encompassing. While the META subject is also attached to the term METAVERSE, a 3D virtual reality world that can be used for socializing, meet-ups, trading, and immense experience on the internet. The word META in the subject METAFI also represents an encompassing ecosystem based on standardized metadata for items on the blockchain which will facilitate interoperability.
The growth of NFTs which means non- fungible tokens represent and enable ownership of asset on the internet and in the metaverse, users can make use of NFTs as wearable item, collectibles and the recent spikes in virtual land shows the uses of NFTs and the major roles they can play in the META. However, METAFI tends to incorporate fungible tokens with non-fungible tokens to represent financial trading services that can be performed with the combination of DEFI and META together. Here is how it can achieve this;
NFTs make use of metadata which include their detail, rarities, and also a link attached to it, with the use of standardized metadata, NFTs across from different blockchains can be arranged orderly on a single interface by sorting through the use of their metadata. Hence, provide a new NFTs marketplace that encloses different assets on different blockchains and solves the problem of interoperability in the moving, trading, and storing of NFT assets. By creating a standard for metadata, assets can become machine-readable and sortable.
METAFI can spawn a new narrative in NFTs yield farming where users can use their NFTs for staking and even lending it to other users in the meta. The real NFT use cases will be unveiled in the metaverse where assets can have their real utilities. Other potentials of the METAFI concept include DAO, TRADING, and FAN TOKEN which can be easily minted and serve their real purpose by giving the fans an advantage in attending virtual meet-ups, voting, etc.
The concept of METAFI is still in its infant stage, the main concept revolves around creating a standard for metadata to be used for assets across different blockchains, enabling interoperability that brings asset orderly, enable financial services such as trading, staking, lending, provide more utility to fan tokens, etc. The concept can bring about more possibilities for solving the ecological construction of each application like Gamefi, Nfts, and Defi by combining them on a single interface.
Finally, the future of the creator’s economy keeps evolving and we await different narratives to hit the crypto market and web3 at large.
Do you think the metaverse combined with defi can have a great impact in web3??? I will like to hear your thoughts in the comment box.