MetaFi is a trend heavily invested in by Binance. So, what is MetaFi? What important MetaFi applications should investors know about? Let's explore together!
What is MetaFi?
MetaFi is a combination of two words—'Meta' represents metadata, and 'Fi' is short for DeFi (Decentralized Finance). MetaFi introduces a new model designed to standardize blockchain technology for large traditional Web2 applications, including gaming, social media, and the metaverse. This creates a universal standard that enhances interoperability between different applications.
MetaFi provides advanced DeFi infrastructure for various projects such as metaverse, GameFi, SocialFi, Web3, and NFTs. The ability to identify asset ownership through metadata is vital for MetaFi to achieve this goal. The idea behind MetaFi is to integrate blockchain functionality into an interoperable Meta ecosystem through metadata standards used across multiple platforms and blockchains. MetaFi can include a combination of fungible tokens and non-fungible tokens (NFTs) as well as community governance like DAOs.
The goal of MetaFi is to establish and promote a new ecosystem based on standardized metadata parameters. This not only helps drive mass adoption of Web 3 and blockchain technology but also brings new utility to users.
How MetaFi Works
Utilizing Blockchain Metadata
One of the core foundations of MetaFi is the use of metadata from blockchains. Popular blockchains like Bitcoin and Ethereum store valuable information about asset types within the network.
For example, when users own NFTs, the related metadata includes detailed information about digital artworks, creators, and ownership history. Additionally, Bitcoin transactions can also contain metadata, providing new possibilities for enhancing blockchain functionality.
Interoperability and Standardization
MetaFi is developed based on the concept of interoperability between different blockchains. To achieve this, MetaFi has established a universal metadata standard that can be deployed across various blockchains. If all blockchains can present metadata in a similarly structured way, MetaFi will achieve high compatibility between different blockchain ecosystems.
For example, an NFT marketplace operating within MetaFi can seamlessly analyze and categorize NFTs from multiple blockchains, allowing users to view, interact, and trade NFTs from Ethereum, BNB Chain, and other blockchains in the same virtual environment.
Machine-readable and sortable assets
MetaFi ensures that assets such as coins/tokens and NFTs are machine-readable and sortable by adhering to metadata standards. This opens up exciting possibilities for automation and data-driven decision-making in the metaverse.
For example, the metaverse supported by MetaFi can automatically assess the risk and value of diversified asset portfolios distributed across various blockchains and present information about asset types in an intuitive manner.
Technologies Needed to Develop MetaFi
Layer 1 Blockchain: Ethereum is a suitable choice due to its strong smart contract development and large community. BNB Chain is also an attractive option with low transaction fees and fast transaction confirmation speeds.
Programming Language: Solidity is the best programming language for creating smart contracts on Ethereum and other EVM-compatible blockchains.
Decentralized Identity – DID: The DID standard is crucial for managing user identities and ensuring access to digital assets.
Oracles: Chainlink provides oracles that allow MetaFi applications to access and standardize real-world data.
Layer 2 Blockchain: Layer 2 blockchains such as rollups and sidechains help enhance scalability and reduce transaction costs.
Interoperability Protocols: Polkadot and Cosmos provide cross-chain interoperability, helping MetaFi projects connect and expand their influence.
JavaScript Development: Web3.js and Ether.js are JavaScript libraries that help interact with the Ethereum blockchain and EVM.
Front-end Development: React and Vue.js are popular front-end libraries for building user interfaces.
Back-end Development: Node.js and Express.js are suitable choices for server-side development and API handling.
Database Solutions: MongoDB and PostgreSQL are popular databases for managing user data.
Security Tools: MythX and OpenZeppelin provide security tools and smart contract libraries.
Testing and Debugging Tools: Truffle and Hardhat are tools that help test and deploy smart contracts.
Applications of MetaFi
Metaverse
The metaverse creates a virtual space full of activities and experiences for users to participate in. MetaFi helps connect and interact between different virtual worlds, allowing users to seamlessly transfer assets and experience a richer and more diverse metaverse.
Gaming
GameFi is the realm where players earn real money or virtual assets through gaming. MetaFi provides the ability to collect and manage virtual assets from multiple games, leading to a rich and diverse gaming experience.
Market
MetaFi-based markets will aggregate and list assets from multiple blockchains, providing a unified interface for collectors and investors. This reduces the hassle of trading NFTs and other digital assets, creating a smooth and convenient trading process.
Cross-chain
MetaFi helps bridge the liquidity gap between DeFi platforms on different blockchains. This creates a standardized cross-chain bridge that allows users to seamlessly trade tokens and NFTs across various blockchains.
NFT
MetaFi introduces the concept of Yield Farming NFTs, allowing users to earn profits by participating in activities such as staking or using NFTs as collateral.
Decentralized Autonomous Organizations
MetaFi supports decentralized organizations (DAOs) to manage and make asset-related decisions more effectively, enhancing transparency and interoperability in governance processes.
Limitations of MetaFi
Metaverse
MetaFi has high technical requirements, especially for interoperability between different blockchains. Research and improvements in layer 1 blockchain technology are needed for easier access to decentralized applications. Another challenge is establishing sustainable tokenomics models and clear transparent governance models.
The Future of MetaFi
The future of MetaFi is gradually unfolding, with some use cases ready to introduce to users. MetaFi will play a key role in developing decentralized identity and reputation management systems. However, stable and interoperable projects with multi-chain capabilities and bridges are needed to facilitate data and asset transfer.
Conclusion
MetaFi opens up a new world of potential in connecting the virtual world and decentralized finance. It brings new opportunities for enhancing liquidity, asset management, and creating diverse user experiences. With a combination of creativity and commitment, MetaFi has the potential to drive the evolution of the digital world, benefiting both user communities and the decentralized finance industry.
Through this article (What is MetaFi? MetaFi Applications You Need to Know), do you now understand MetaFi? If not, please leave a message below, and we will answer you right away!
