JP Morgan, the largest bank in the United States, announced that it has become the first lender to enter the metaverse, opening a lounge in Decentraland, a virtual environment based on blockchain technology.
In addition to the launch of the Onyx lounge (the name relates to the bank’s suite of permissioned Ethereum-based services), JP Morgan published a study on how businesses might identify possibilities in the metaverse.
JP Morgan’s head of crypto and the metaverse, Christine Moy, stated in an email that there is a lot of client interest in learning more about the metaverse, so they put together our white paper to help clients cut through the noise and highlight what the current reality is, and what needs to be built next in technology, commercial infrastructure, privacy/identity, and workforce, in order to maximize the full potential of our lives in the metaverse.
With the mainstream use of non-fungible tokens (NFT), the past year has seen a rapid surge into the metaverse, a catch-all for immersive gaming, world-building, and entertainment, fuelled by integrated commercial applications.
Samsung launched a Decentraland counterpart of its New York shop in January, and Barbados established a metaverse embassy in November, also in Decentraland.
JP Morgan begins its analysis of “metanomics” by noting that the average price of a parcel of virtual land more than doubled in the second half of 2021, rising from $6,000 in June to $12,000 by December across the four major Web 3 metaverse sites: Decentraland, The Sandbox, Somnium Space, and Cryptovoxels.
In time, the virtual real estate market may begin to see services similar to those seen in the actual world, such as credit, mortgages, and rental agreements, according to the JP Morgan paper. It also stated that DeFi collateral management might play a role, and that this could be handled by DAO rather than traditional finance corporations.
According to the study, work in the metaverse will be successful as well, citing a variety of entertainment providers as well as apps such as RTFKT, a virtual shoe designer recently acquired by Nike. According to the bank, another large investment will almost probably be on advertising, with in-game ad spending expected to reach $18.41 billion by 2027.
The JP Morgan paper sought to contrast the hype surrounding the metaverse with reality, stating that several aspects need to be improved. The overall user experience, avatar performance, and commercial infrastructure are examples of these.