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Metaverse and Web3 marketing glossary—key words and terms brands need to know

Metaverse and Web3 marketing glossary—key words and terms brands need to know
Written by Publishing Team

Ethereum: The most popular blockchain for NFTs, accounting for roughly 80% of the market share, per a JPMorgan study cited by CoinDesk. Ether is the platform’s cryptocurrency, which is the second-most popular crypto behind only bitcoin. Different from the Bitcoin blockchain, however, is that Ethereum is more than a platform for sending and receiving digital currency, namely via its ability to support smart contracts and thus NFTs, DeFi and more.

Gas fees: Transaction fees for any function that is carried out on the Ethereum blockchain, such as buying NFTs. The price of gas depends on the level of activity on the network, ranging anywhere from a few dollars during times of low activity to as much as several hundred dollars during times of intense congestion. The average gas fee of an Ethereum transaction at the time of writing is $11.14, per Cointelegraph.

Interoperability: The capacity for a user to seamlessly move between platforms with their owned assets.

Metaverse: Part gaming ecosystem, part virtual lifestyle platform, the metaverse is a collection of digital worlds that are interoperable, in which users can create content and interact with others as avatars, or digital versions of themselves.

Watch: Unlocking the metaverse

Mint: To publish an NFT on a blockchain.

Non-fungible token (NFT): A non-fungible token is a certificate providing the authenticity and uniqueness of a digital asset. It is not the asset itself, but rather a unit of data that proves ownership of the asset and is ideally stored on a blockchain to ensure that data is incorruptible.

Read more: How brands are using NFTs

OpenSea: The most popular marketplace for NFTs, accounting for over 60% of the market share. OpenSea currently supports three chains: Ethereum, Polygon (which is built on top of Ethereum) and Klatyn.

Proof of attendance protocol (POAP): Contrary to the name, a POAP is not a consensus mechanism but rather an NFT that proves the holder attended a respective physical or virtual event. POAPs are created via a special smart contract (the protocol), and are typically collected to preserve memories of experiences. They must include an image, description, date and time of the event in question.

Proof of stake (PoS): Proof of stake is a consensus mechanism that relies on staking, wherein computers (known as validators) set aside an amount of crypto as collateral in order to receive a chance to add blocks/coins to the ecosystem, after which they are also rewarded. This method requires far less energy to create new blocks and new coins, and is currently used by less popular but growing chains like Tezos, Solana and Cardano. Ethereum is also planning to switch to PoS sometime this summer, after which it will be known as Ethereum 2.0.

Read more: Why Kanye’s stance on NFTs struck a chord

Proof of work (PoW): Proof of work is a consensus mechanism that relies on mining, wherein computers (known as miners) compete to solve a cryptographic math puzzle. The first miner to correctly solve the puzzle gets to add the new block/coins and earns a crypto reward. PoW is used by the top two blockchains, Bitcoin and Ethereum, but despite its level of experience, is known for being exceptionally energy-intensive.

Smart contract: A smart contract is the mechanism by which NFTs are minted and transferred. It is a computer program that when run, executes a function without the need for third parties, and has use in areas outside of NFTs as well, such as DeFi (decentralized finance).

Virtual goods: Assets that exist in virtual platforms and are owned and used by avatars, typically in the form of NFTs. These goods often mirror real-world assets, such as clothes (known as wearables) and furniture. They are considered essential pieces of the metaverse economy.

Virtual land: Parcels of real estate that are formatted as NFTs and exist in virtual platforms, such as The Sandbox and Decentraland. Owners can buy or rent their land on primary and secondary marketplaces and develop it however they want, from building stores that sell virtual goods to creating music festivals with performances on the platform. Just like actual real estate, the parcels are acquired as fixed plots and cost real money (average for smallest plots is roughly $11,000), though transactions are made using platform-native cryptocurrencies.

Read more: What brands need to know about buying virtual land

Virtual reality (VR): Virtual reality is a technology that immerses the viewer in a completely digital experience, as opposed to only partially through AR. An example of a VR tool is Meta’s Oculus headset.

Web3: The vision for the next iteration of the internet. As opposed to the current system (Web2), which is controlled by walled gardens like Google and Facebook, Web3 emphasizes user ownership—of data, content and assets—through the interoperability of meta platforms and the decentralized nature of blockchain technology.

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Publishing Team