You’ve probably heard the buzz surrounding the metaverse. JP Morgan says it is a $1 trillion opportunity, and CitiBank projected the metaverse could be worth between $8 and $13 trillion by 2030. And with the metaverse comes a particular type of crypto that serves multiple functions. They are called the “metaverse coins.”
If you’re a tracker of Web3 articles, you’ve likely seen the headlines blaring out, “Best Metaverse Coins to Invest in for 2022” or “Top Metaverse Coins for April.” Suddenly, you have questions:
- What is a metaverse crypto coin?
- What are the best metaverse coins?
- How do I invest in a metaverse coin?
Crypto, Web3, and metaverse coins can be confusing. It may have given you a headache putting it all together. Don’t worry — we understand. That’s why we’ve put together this definitive guide to answer all your questions about metaverse coins. We’ll review what a metaverse coin is, the functions of metaverse tokens, the top metaverse coins by category, and the platforms through which you can invest in metaverse coins.
You’ll have enough information to get started on your journey with metaverse coins by the end.
What is the metaverse?
To get a complete definition of a metaverse coin, we must first examine the worlds that have birthed them: the metaverses. Descriptions of metaverses vary, but generally, they are considered shared virtual worlds built for virtual reality and augmented reality where people can socialize, interact with brands, work, and create.
Often, metaverses are associated with cryptocurrencies, non-fungible tokens, and various types of Web3 technology. Metaverses frequently fall into one of two categories: centralized and decentralized. Some common centralized metaverses include Roblox, Fortnite, and Meta’s Horizon Worlds. Some top decentralized metaverse platforms include Decentraland and The Sandbox.
The differences between centralized and decentralized metaverses are essential, and they speak to how the “virtual currency” in the virtual space is implemented.
Generally, an entity controls a centralized metaverse. For instance, Epic Games runs the Fortnite metaverse. There is no cryptocurrency, and NFTs don’t exist. These limitations mean that when someone buys something in a centralized metaverse, they buy from a company, which benefits the company. It also means that in-game currency can’t be transferred externally and cashed out for fiat currency or crypto. There is no property ownership.
Decentralized metaverses are different, and many consider them the next evolution of centralized metaverses. You own the property you buy in them, whether a piece of digital land or a pair of sneakers. This ownership is made possible through NFTs. Someone can turn around and sell a piece of land or anything they own on secondary markets.
Likewise, the money earned in these decentralized virtual worlds is in the form of crypto. Because you own the cryptocurrency you make, you can transfer that cryptocurrency out to another exchange, swap it for fiat or another crypto, and cash out. In other words, instead of owning a fake virtual currency in a centralized metaverse, you own an actual decentralized cryptocurrency that you can swap for fiat.
This cryptocurrency may vary, but they generally fall into one category: metaverse coins.
What is a metaverse coin?
A metaverse coin or token is a cryptocurrency directly related to a metaverse. Although that seems simple, let’s dive in a little bit deeper.
First, a definition of crypto. It is a digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend. Cryptocurrencies use blockchain technology (blockchains being a transparent, public digital ledger) to track transactions.
The first crypto was Bitcoin, which is still the largest by market cap. One important aspect of cryptocurrencies, and metaverse tokens by default, is that they are inherently fungible.
The fungibility of a metaverse coin means it can be exchanged for another of the same currency without losing any of its value. 1 SAND = 1 SAND, forever, in other words. This fungibility makes it different from the property within metaverses, which is non-fungible.
Metaverse coins, then, are subsets of cryptocurrencies as a whole. They share the same traits as other cryptos: fungibility, tethered to a blockchain, secured through cryptography. They also fall under the category of digital assets. But to dig a little deeper and thoroughly answer the question “What is a metaverse coin?” we must analyze the different functions of metaverse coins.
What are some functions of metaverse tokens?
There’s a big word that goes around in Web3 circles, and one that people skeptical of Web3 knock: utility. Many people believe that cryptocurrency has no inherent value, nothing more than an investment tool that its investors take advantage of while relying on a concept called “greater fool’s theory.”
But make no mistake, metaverse coins have utility. This section will focus on three types, all with the end-user in mind. We’ll cover three utilities of metaverse coins here: governance, in-metaverse currency, and investment potential.
First, many metaverse coins function as governance tools for their metaverses. The governance utility of metaverse coins is similar to stockholders’ ownership power. Users can take the number of metaverse tokens they have and use them to vote on the directions of that metaverse. The more metaverse coins they have, the more voting power the user has.
Second, metaverse coins are often used as in-metaverse currency or medium of exchange. For instance, in the metaverse Decentraland, users pay with and receive $MANA when buying or selling items. If you want to buy a piece of Decentraland virtual land, you will pay in $MANA rather than fiat currency or another crypto. The same is true for The Sandbox with $SAND.
Third, metaverse coins are an investment tool for cryptocurrency traders, which leads to their rapid fluctuations in price. Because metaverse coins have underlying utility, traders can think that the coins will be in further demand in the future. This assumption allows for risk mitigation compared to other, more speculative crypto investments.
This utility as an investment tool is perhaps the most important for everyday people. Although they may never set foot in a metaverse or buy and sell digital real estate, they know that the metaverse is a hot concept, and some of the gains for metaverse coins in the past year have been massive. We’ve focused a good portion of this guide on reviewing the top metaverse coins.
Remember that none of this constitutes investment advice, and please do your own research. You can compare the coins on this list to those on other lists to get some ideas. Their rankings on these lists do not endorse any future potential or upside potential.
What are the three top metaverse coins?
This section covers the top three pure metaverse coins — ones unrelated to gaming and infrastructure. The three we have here are the top out of all metaverse coins by market cap. Two have been around for years, while one debuted in the past month.
$MANA. $MANA is the in-metaverse currency and governance token of Decentraland. It sits at a $3.2 billion market cap with 1.5 billion coins in circulation, giving each coin a value of a little over $2. $MANA, much like most of the crypto market, has fallen on hard times in 2022, but its price is still much higher than where it was in early 2021. Because it is the main currency of the top metaverse, it can be an attractive investment.
$SAND. $SAND is the in-metaverse currency and governance token of the 2nd-top metaverse, The Sandbox. It has a market cap of $3.1 billion with a circulating supply of 1.2 billion tokens. As of this writing, a single $SAND token is worth around $2.7. It has strong investment potential because it is the primary crypto in The Sandbox Metaverse, which has dozens of partnerships with regular and Web3 companies.
$APE. Yuga Labs released this coin in March of 2022, and it has quickly launched up the leaderboard of cryptocurrencies. It has ties to the Bored Ape Yacht Club NFT collection and, more than that, is likely the frontrunner for Yuga Labs’ virtual land sale in April of 2022. Yuga Labs may also use the $APE token as an in-metaverse currency, possibly giving the coin strong future potential. Currently, it has a market cap of $3 billion with a circulating supply of 278 million tokens. Each $APE token is worth around $11.
What are the three top metaverse game tokens?
These next three metaverse coins are specifically about gaming. They are an integral part of a game that has traditional gameplay but functions like a metaverse as well. One is the top metaverse coin around, and the other two are part of upcoming games that have people in Web3 circles talking.
$AXS. $AXS (Axie Infinity Shards) is the official governance token of Axie Infinity, the most popular blockchain game and the flag-bearer for play-to-earn games. $AXS is a tradeable coin, has a market cap of $3.5 billion, and has a circulating supply of 77.3 million tokens. Each coin today is worth around $46. Because $AXS is the main coin for the top blockchain gaming platform, it has functionality. And it has the top market cap of all metaverse coins.
$ILV. $ILV is the primary token in the Illuvium game and will have many utilities in both the game (possibly for gaming experiences) and the general ecosystem. Even though the game has not been released yet, a great deal of hype has built around it. The graphics in the clips shown are stunning, and the gameplay interesting. Still, $ILV is a highly speculative investment. It currently has a market cap of $353 million and a circulating supply of roughly 651,000 tokens. Each token is worth $542.
$TLM. $TLM is the primary token for the Alien Worlds game, which surged in popularity throughout 2021. It has a market cap of $123 million and a circulating supply of 1.2 billion tokens, making each $TLM coin worth 10 cents. $TLM has an exciting utility — you can earn it in the game by performing specific tasks, which makes it part of the game rewards and Alien Worlds true play-to-earn gaming. $TLM, then, is both a metaverse coin and part of a category called game assets.
What are the three top metaverse infrastructure coins?
While some metaverse cryptos are part of decentralized worlds and others part of blockchain games, there’s another growing segment of metaverse coins worth looking at. These coins relate to metaverse infrastructure. Here, you’ll find three — created by companies that supply the picks and shovels in the metaverse.
$THETA. $THETA is part of the Theta network, which allows users to lend their bandwidth to other users. The sharing of bandwidth could have significant implications down the road for people who want to participate in the metaverse but are hamstrung by internet providers. Today, $THETA has a market cap of $3 billion and a circulating supply of 1 billion tokens. Each token, therefore, is worth roughly $3.
$GALA. $GALA is the utility token of Gala Games, which runs a blockchain gaming ecosystem that allows users to trade NFTs. $GALA had a big 2021, gaining (percentage-wise) more than even the leading metaverse tokens. Today, it has a market cap of $1.5 billion and a circulating supply of 7.5 billion tokens. Each coin is worth roughly 20 cents.
$ENJ. $ENJ is the utility coin of ENJIN, a company that helps developers manage and create virtual goods on the Ethereum blockchain. The company’s programs integrate with games, and developers can use the Enjin Coin as in-game currency. Today, $ENJ has a market cap of $1.4 billion and a circulating supply of 934 million. Each Enjin Coin has a value of $1.53.
What are some top platforms to buy metaverse coins?
If you’re looking to buy a metaverse crypto coin, you have a few options. There are exchanges, large and small, that allow you to purchase metaverse coins directly with fiat or to swap your crypto for metaverse coins. The first important point is that crypto exchanges generally fall into one of two categories: centralized or decentralized.
Centralized exchanges (CEX) are often large institutions with a business model similar to stock exchanges. In them, you allow the exchange to have custody of your crypto but receive (often) better liquidity for trading. Generally, you can buy cryptocurrency with fiat money on CEXs. Usually, you’ll have to go through Know Your Customer procedures because the CEXs adhere to anti-money laundering rules.
Some popular CEXs are Binance, Coinbase, and Kraken.
Decentralized exchanges (DEX) allow you to swap one cryptocurrency for another. They operate with automated market makers, which are a bit like algorithms that determine the prices of the coins at the time of the swap. They allow you to retain custody of your cryptocurrency and often run on the principle of anonymity — so there are no invasive KYC questions to answer. A decentralized exchange generally promises lower fees but may have problems with liquidity. And a decentralized exchange usually corresponds to a particular blockchain: Ethereum, Solana, and so forth.
Popular DEXs include Uniswap, SushiSwap, and Soldex.
Whether you choose a CEX or DEX to buy your metaverse coins depends on your particular needs and whether you want to undergo KYC on CEXs or deal with the risks associated with DEXs.
Now you have completed the definitive guide to and review of metaverse coins. They are a subset of crypto and can be essential parts of full-fledged decentralized metaverses, blockchain games, or the infrastructure for metaverses.
Investing in them requires researching the facets of metaverse coins, finding information, and picking the suitable exchange to do your trading. Crypto and Web3 assets are generally considered speculative and can be subject to volatility. Add them to your portfolio at your own risk. If you want information about the other ways to invest in the metaverse, visit our more general metaverse investments article here.