Metaverse and Smart Contracts: A Brief Review
Metaverse and Smart Contracts
Since the metaverse is the ultra replication and depiction of the real world, activities in this digital realm are similar to that of our physical world. With customized 3D avatars, users can step into the metaverse, interact & collaborate with other avatars, and engage in various activities such as playing games, buying & selling digital assets, and socializing experiences. The metaverse also includes 3D versions of real-world objects such as buildings, meeting rooms, retail stores, etc.
While the metaverse means many things to many people and businesses, it is more than just an interconnected web of virtual realms. With the recent surge of blockchain and NFT use cases, many revolutionary and new projects have been launched including decentralized metaverse, which is one of the most feasible use cases of blockchain metaverse. Decentralization of metaverse is fuelled by blockchain technology which brings along other advantages like improved governance, DAO integration, and interoperability elements.
Based on the industry-specific requirements, enterprises can select from a wide range of blockchain protocol options, however, the demand for smart contract-enabled applications and platforms is comparatively high. Like real-life transactions, all the trade and exchange of virtual products and services inside the metaverse are regulated via smart contracts.
Smart contracts and allied technologies augment many aspects of the metaverse, and it constructs a new paradigm where metaverse applications can seamlessly run and operate in a decentralized manner.
In this blog, we will dive deeper into the role of smart contracts in the metaverse and how it is enabling businesses and industries to decentralize and secure the way they operate inside the metaverse.
How Can Smart Contracts Help in Solving Metaverse Challenges?
In order to better understand the prevailing challenges in the metaverse and how smart contract development services can solve them. Let us first understand the metaverse with respect to the centralized vs decentralized metaverse.
- Centralized Metaverse
A centralized metaverse means that a single authority governs a metaverse platform where users have to adhere to the entity’s terms, policies, internal servers, and other parameters. The idea of the metaverse from Microsoft and Meta (formerly Facebook) is centralized where users have to trust Meta’s and Microsoft’s authority and submit their data to enter and navigate the metaverse. Additionally, the user’s interaction is constricted to the horizon of the single metaverse ecosystem that they are using. In a way, the access to users is limited or restricted and they can not interact with the users in other metaverses or participate in activities like buying and selling digital assets and goods.
- Decentralized Metaverse
Decentralized metaverse, on the other hand, has the potential to address and solve the major challenges of the centralized metaverse- interoperability being one of the most pivotal issues. The concept of a decentralized metaverse is to architect an open-source space that comprises several interconnected virtual realms regulated and secured via smart contracts.
Based on the rules and conditions written on smart contracts, users can relish cross-metaverse trading without facing any compliant issues. Rather than a single entity, blockchain-powered metaverse can be accessed and controlled by the users, essentially through a DAO. Users have the entitlement to participate in decision-making strategies, cast votes, decide governance, and perform several other crucial roles through smart contracts.
Building Smart Contracts For The Metaverse
The attributes and properties of smart contracts vary in accordance with the structure, technical aspects, and feature requisites of a metaverse project. Therefore, smart contracts built for different projects are subject to differ. Moreover, gaming-based P2E metaverse projects are more prevalent these days and worth the hype as compared to other related projects.
For instance, a smart contract on popular metaverses such as Axie Infinity and Decentraland focuses on handling and managing the trading process of real estate, land parcels, in-game assets, and other digital assets that can be accessed and can be made available with NFTs. The smart contract development process supports a myriad of tokens and standard protocols such as ERC-721 and ERC-1155.
- Cardano Powering Smart Contract Development
Cardano is one of the most sought-after smart contracts development platforms based on the PoS blockchain. This year, it has seen a massive jump in terms of usability and popularity this year. Cardano operates on two separate programming languages that elucidate different parameters. Plutus and Marlowe, are the two programming languages that enable developers to construct Cardano applications and financial systems respectively.
- Chainlink Deals in Oracle
Chainlink is another smart contract development platform that enables businesses to build applications that are interoperable and can seamlessly interact with other blockchain networks. For the integration of new projects, the platform also provides ‘oracles’ or pre-built codes.
Chainlink smart contracts development allows for off-chain computation and interaction with real-world data while offering maximum levels of accessibility, security, and transparency that are standard for blockchain platforms.
Why Smart Contracts are Required in The Metaverse?
Smart contracts can be described as an ‘invisible’ technology that has already commenced its journey in the metaverse to evolve our lifestyles. One of the major transformations that smart contracts-based blockchains bring is the removal of unnecessary negotiations. Therefore, they are absolutely needed in the metaverse to increase the security and transparency of transactions within several areas such as eCommerce, real estate, media & entertainment, gaming, and more.
Being the dominant mechanism, smart contracts offer several merits to the blockchain metaverse whilst offering a helping hand to regulate and stabilize metaverse activities. Smart contracts on the blockchain allow interaction within metaverse communities while parallelly strengthening transaction expendability. Operating and active smart contracts need negligible or no maintenance costs associated with them. Moreover, it enables quick development and cost-effective running costs for diverse metaverse projects.
Metaverse is set to provide an abundance of opportunities and user-engagement possibilities to businesses across every possible industry that holds the intellectual property for evolving their strategies and becoming compatible with the virtual ecosystem. For the realization of a hyper-real metaverse and for supporting physical-world-like activities inside the digital realm, smart contracts and decentralized applications play a pivotal role in the metaverse.
Moreover, smart contract development is useful for authorizing the process of constructing extra features in the metaverse without essentially modifying or optimizing the entire metaverse codebase.
If you are looking for robust and secure smart contract development or decentralized app development services for your business, feel free to drop us a line. Our experts will get back to you within 24 hours.