Metalith—a company that provides tools and research for non-fungible token (NFT) markets—earlier this week unveiled a series of indexes called “Metalix” designed to monitor the LAND token, which represents virtual land and assets in the Decentraland digital world.
Founded in August 2019, and backed by Metaverse Ventures—a division of the Digital Currency Group, Metalith aims to bring light to otherwise “opaque and illiquid” world of NFT markets, according to CEO and cofounder Joel Hubert.
In an interview with Decrypt, Hubert said that Metalith became attracted to Decentraland because nothing within it can be censored or shut down. Decentraland, an Ethereum-based virtual reality platform, currently uses the LAND token to represent “parcels,” which can be used to build virtual assets. These assets can then be visited and utilized within its virtual world.
There are more than 90,000 parcels in Decentraland. All of these assets are rare and one-of-a-kind, according to Hubert, making them very difficult to monitor.
“There are no order books because each parcel is unique, and market participants have to spend time finding and negotiating trades,” he said. “As a consequence, NFT markets are opaque and illiquid.”
Hubert said Metalix was built to aggregate and present the overall market performance of parcels in a simple format. Metalix currently monitors sales medians for LAND on weekly, monthly and quarterly timeframes. For now, the indexes will only cover LAND tokens—including estates—but the company plans to roll out indexes for other projects as well, according to Hubert.
“Once we have a good base, we can offer a separate index that aggregates NFT performance across projects to give an overall idea of how the NFT market is doing,” he said.
Hubert said NFTs are among the most revolutionary tools in the blockchain space because they represent “digital scarcity.” Scarcity is required to make economies work, and having immutable digital representations of unique assets, he said, makes it easier to trade these items and enter into more advanced agreements with them. Hubert foresees a future where NFTs become the essential building blocks of digital civilizations.
“NFTs have huge potential for games and more,” he explained. “The market size is only about $200 million, but it’s already creating serious waves.”