3 Great Metaverse Tokens to Watch in March

These metaverse tokens can open doors to new worlds.

Metaverse tokens skyrocketed last year on the back of Facebook's Meta rebrand and a flurry of interest in virtual worlds. Some metaverse cryptos gained more than 10,000% -- sparking fears they'd become overhyped and overpriced.

The climate is a little different now. Many coins and tokens are down 40% or more from their highs. Some investors who missed out on big metaverse plays before they surged wonder if now might be a good time to buy. However, there's still a lot of uncertainty about how the metaverse will unfold, and how these tokens will perform in the long term.

With all that in mind, here are three metaverse tokens to keep on your radar this month.

1. Axie Infinity (AXS)

Axie Infinity popularized play-to-earn gaming last year. The blockchain gaming model means the rewards people earn in game have value outside the game. There's a lot of crossover between metaverses and gaming, exemplified by Axie. Axie is a virtual world in which players can breed, battle, and complete challenges with cute Axies.

Each Axie in the game is a non-fungible token (NFT), another aspect of crypto that took off last year. In February, Axie made significant changes to its in-game economy. It dramatically reduced production of its main in-game rewards, especially Smooth Love Potion (SLP) tokens. Before the changes, the game generated four times more SLP each day than it burned, leading to rampant in-game inflation. Axie has now taken dramatic steps to avoid what its blog post describes as "total and permanent economic collapse." These changes make Axie worth watching this month.

2. Decentraland (MANA)

Decentraland is the biggest metaverse token by market cap. You don't need any cryptocurrency to visit the virtual world as a guest, and it's a great way to explore the possibilities offered by this new tech. What's interesting about Decentraland this month is that it will host Metaverse Fashion Week from March 24–27. The virtual catwalk will feature many top brands, including Selfridges, Tommy Hilfiger, and Dolce & Gabbana. Some brands are venturing into the metaverse for the first time.

Another reason to have Decentraland on your watchlist is that J.P. Morgan has opened a virtual space called Onyx Lounge in its Metajuku mall. A J.P. Morgan report says, "The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues." Decentraland and Axie Infinity are among the few cryptos that have produced gains in February.

3. Render (RNDR)

Currencies that power virtual worlds are not the only way to get a taste of the metaverse. Tokens like Render promise to create the 3D visuals that will make the metaverse an exciting place to be. Render is a decentralized network that helps digital creators produce high quality visuals without having to buy expensive computers. To do this, Render has a network of individuals who share their unused computer processing power and gain RNDR tokens as a reward.

Render was listed on popular crypto exchange Coinbase at the start of February, but the announcement did little to help its price. Nonetheless, it is an interesting concept that has real-world utility and could prove valuable in our increasingly digital lives.

Bottom line

Each of the cryptocurrencies listed above are available from major crypto exchanges in the U.S. But before you rush out to buy them, take some time to research each project and understand how it fits with your investment strategy. While Ark Invest's Cathie Wood thinks the metaverse could be worth trillions, it's still very early days for these virtual worlds. We don't yet know what shape it will take or which individual projects will turn out to be market leaders.

One area to watch is the tug of war between centralized and decentralized crypto-based metaverses. Decentralized metaverses will have to compete with the centralized projects being developed by tech giants such as Facebook/Meta. The decentralized versions have a lot to offer, but we don't know whether they will prevail when users start to engage with centralized virtual worlds.

All cryptocurrencies carry risk, but there's a lot of uncertainty around how this sector will evolve, so it is important to tread carefully. As with any cryptocurrency investment, only invest money you can afford to lose, and ensure your metaverse token investments only make up a small part of your overall portfolio.