Metaverse | Assets on Layer2
Tags: Metaverse, Meta, Layer 2, Defi, Nft

First, let’s talk about Layer 2. The Ethereum gas fee is too expensive for ordinary people to use, so we need to strongly support Plian, Solana, Avalanche and other public chains. As most of the ETH infrastructure migrates to L2 early next year, and most of the Layer 2 projects issue tokens, the original ecosystem will find it difficult to compete with Ethereum.

According to the latest data from Footprint Analytics, the total amount of Ethereum Layer 2 locked up (or TVL) in the fourth quarter increased by 600% compared to the third quarter, breaking through the peak of $7.17 billion on November 25.

Layer2 and cross-chain have attached great importance to the whole blockchain industry this year, because the entire crypto market has doubled 10 times compared to which in 2017, and the number of individual users and institutions is much larger than before. However, the long-term development of Layer2, DeFi, and NFT is not only in the crypto market, but also in Web3, and MetaVerse. Here we mainly analyze Layer2 in the context of MetaVerse.

Expand the Capacity of DeFi

In fact, Layer 2 has no concept of blocks, no nodes, and no consensus mechanism, so blocks can’t be searched on the block browser of the Layer 2 net. The operator of Layer 2 is only responsible for arranging the transactions in order and then processing them. The key point of the Layer2 network is the sorting of transactions. The early Layer 2 was explored in the 2 main directions: state channels and side chains. However, in the process of exploration, it was found that the state channels could not meet the privacy protection requirements of decentralization and anonymity, and the asset control rights of the side chains were off the chain. There are great hidden dangers to asset security, so they are not the best expansion solution in Layer 2. A good solution is to maintain data security, transaction authenticity and anonymity, and short-term withdrawal cycles. Layer 2 also seizes these features to continuously improve and expand its capacity.

Many projects in the Ethereum ecosystem are making efforts to expand capacity through side chains, Rollup, ORU, ZK, etc., such as Polygon, Arbitrum, Optimism, or StarkWare. L2 is much cheaper than L1, and Ethereum has more opportunities and potentials because of the expansion plan.

The transaction volume of the DeFi market has exceeded 100 million. Decentralized finance is built on the blockchain, which integrates smart contract functions and a secure oracle network such as Chainlink. It contains a variety of DApps that can eliminate the traditional Intermediaries in financial services, which have established a brand-new financial model.

The DeFi protocol itself has composability without permission and is rooted in the open source development environment, so it can continuously improve and iterate on the established financial model. The increase in DeFi transaction volume and high fees have made many people choose to migrate their transactions to the L2 network. The importance of L2 is that it rapidly adds more channels, allowing a large number of transaction to be paralleled at a high speed. At present, most of the hottest Gamefi have chosen side chains. DeFi 2.0 is still on the Ethereum network, and Plian, Cosmos and Polkadot are also quietly working hard.

MetaVerse’s Asset Trading Channel

The economic system has always been the focus of MetaVerse, and the pricing and circulation of virtual assets are also the driving force for the continuous derivation of the virtual world. Today, giant companies are all building MetaVerse. Facebook’s parent company Meta’s virtual platform Horizon Worlds, Microsoft and Roblox, etc., all represent the importance of MetaVerse. Zuckerberg once described Metaverse as ‘an immersive and huge online field that will cover the entire digital society and economy’. MetaVerse is built and created through digital technology. The value weight of digital copyright is much higher than that of the current Internet. Therefore, NFT will have a high position in MetaVerse as the asset mark and uniqueness mark of digital works. As a distributed asset, the circulation of NFT in the secondary market requires a DeFi environment with a strong infrastructure to support it.

The current NFT trading market can be regarded as the initial stage of MetaVerse content, and MetaVerse needs a large amount of content in the future. And a healthy content ecosystem requires not only to protect the rights of creators, but also to ensure the enthusiasm of community members to promote works, and more importantly, to ensure the scarcity of works, because the cost of copying in the digital world is too low. Therefore, we still have to return to the NFT trading market to think of the initial development. The current NFT product categories include avatars, music, domain names, film and television, photography, sports, cards, virtual spaces, etc., but they are very scattered, and currently only have collections. The value does not show their integrity as “members of the MetaVerse.” Even so, auctions, collections, and long-term royalties are enough to support it to gain a large market. DeFi transactions and cross-chain on L2 could satisfy the sudden influx of massive user groups.

The technological innovation and rapid development of Layer 2 have also promoted the development of the DeFi market, NFT and virtual world. It symbolizes that Layer 2 is the future of ETH in improving the trading efficiency and reducing developer workload. After years of update and iteration, L2 has realized a secure solution for expansion on Ethereum, alleviating the problems of Ethereum network congestion and high gas fees, and has become a mainstream technical solution for the large-scale application of blockchain technology. The solutions have their own advantages and disadvantages, but each Layer 2 project develops the corresponding technology according to its own situation, so as to realize its maximum value.

Voice, Identity & Record

As mentioned above: MetaVerse now lacks content, NFT will become a marker of content assets in MetaVerse, L2 network and cross-chain technology will bring better financial infrastructure for the asset circulation and transaction of MetaVerse. Currently, Pizzap is making corresponding preparations based on this trend, encouraging community members to create content, and then encourage other members to spread, buy and sell NFT works. At the same time, Pizzap will issue VoiceNFT.

In the stage of Pizzap 1.0, the community hopes to form an atmosphere that players contribute voices and matche them to their appropriate online scenes. The ecosystem is the same as MetaVerse, and it has the same integrity and subjective initiative. At the same time, while a healthy and efficient closed loop is formed among the communities, that is, the economic model of VoiceNFT is “done” by users — uploading voices and minting them into NFTs for sales, which will form a certain topic on the social media. Finally, the VoiceNFTs in Pizzap will become MetaVerse voices. Pizzap’s voice assets will also become the digital assets in MetaVerse, and the players will also create voice works in Pizzap, and then buy, sell and use them in the MetaVerse ecosystem.

At present, Pizzap focuses on the atmosphere of the VoiceNFT community itself, hoping to achieve this by organizing groups of self-creation and self-forging. We can see that most NFT communities are divided into 2 groups: creators and collectors. Pizzap’s VoiceNFT is no exception. The core volunteers of the community will focus on mobilizing the value of these 2 forces. A healthy community environment will attract more and more members. This power will become the original driving force for content creation and asset circulation in MetaVerse. And all of this is based on DeFi. At present, a huge amount of DeFi transactions are inseparable from the support of Layer 2, and there may even be Layer 3, Layer 4…