MetaFi: the symbiosis of DeFi and Metaverse

MetaFi: the symbiosis of DeFi and Metaverse


Decentralized finance (DeFi) has been the subject of discussion in the crypto space since 2018 for various obvious reasons. The concept of DeFi is based on innovation without permission, a vision of broader financial reach and principles that define the sovereignty of wealth. At the same time, another technological innovation appeared in the form of a metaverse.

Now the merger of both technologies in the form of MetaFi is causing a lot of controversy in the global crypto community. DeFi has successfully gained the attention of crypto investors, albeit with a relatively low level of implementation. Since (according to only slightly less than 5% of the total volume of crypto assets work as collateral in DeFi, it is important to ask how it will expand in the future. Let’s try together to uncover the connection of MetaFi DeFi and how it works, as well as some of its potential use cases.

Background of DeFi

Before you try to learn more about MetaFi and DeFi for the metaverse, it is important to understand the background of its development. DeFi protocols and applications have focused on developing a system that can promote transparency and efficiency while being open to innovation. However, the implementation of DeFi is quite slow.

Annual monthly revenue at DeFi was $4.6 billion in 2021, which is less than 5% of the revenue generated by JP Morgan in 2021. In addition, the scope of DeFi was limited to basic applications such as borrowing as well as lending. However, DeFi solutions can unlock value in the metaverse through MetaFi functionality. What is the probability of success in convergence between metaverse as well as DeFi? Here you need to understand what metaverse is, as well as how it combines with DeFi.

Prehistory of the metaverse

One of the important aspects of the metaverse is cryptocurrency and how it contributes to the development of the creators’ economy in the metaverse. In fact, the metaverse is an economic system with an economy of creators, which is better than a centralized digital economy. Experts predict that the total cost of the meta-economy will exceed the economy of nation-states by a huge margin. With the help of open metaverse, it is possible to find an open and unresolvable version of meta-economics. The functionality of the MetaFi cryptocurrency largely depends on the two main layers of the metaverse.

These two layers are the interface layer and the financial computing layer, where each has its own functionality. The interface layer helps the end user to get acquainted with the metaverse using various hardware and software technologies. On the other hand, there is a financial computing layer, which is the basis for performing computational tasks of the metaverse. The financial computing layer creates a decentralized, democratic and transparent framework for determining the logic of the creator economy underlying the metaverse.

Against the background of the metaverse, the prospects of MetaFi DeFi are clearly visible. It shows the possibilities of creating a parallel economic system with decentralized ledgers. The system offers cryptocurrency support, global availability and transparency. At the same time, the metaverse is laying the foundation for many new digital economies, especially with the growth of NFT and Play-to-Earn games.

Is MetaFi a real offer?

The metaverse and DeFi are two new innovative technological trends with potential, and they should not be confused. Many people looking for information about the capabilities of the MetaFi protocol in the future may also wonder about the feasibility of such ideas. Nowadays, you can find many social networks and gaming platforms controlling billions of dollars.

The total value of the digital economy currently stands at almost 11.5 billion US dollars. On the other hand, there is also a developing subgroup of the digital economy in the form of the economy of digital creators. Today, there are more than 50 million content creators in the digital space. However, they have to face the limitations of web 2.0 digital platforms and incur economic losses due to control over their creations.

On the other hand, the world of web 3.0 is completely different. You can find DeFi, decentralized applications, cryptocurrencies and NFT in a paradigm that revolves around users and their autonomy. In the long term, it can be expected that the metaverse will adopt web 3.0 technologies and related principles of user empowerment. Therefore, it is certainly reasonable to assume that DeFi applications for the metaverse can become a really profitable offer.

Understanding MetaFi

The basic definition of MetaFi assumes that it includes protocols, services and products that allow complex financial interactions between NFT and interchangeable tokens or their derivatives. For example, you can use part of your NFT as collateral for DeFi credit platforms. Important features of MetaFi DeFi are two basic principles, suggesting that it is composable and unstoppable. Developers from different parts of the world can actively participate in the new ecosystem, competing for higher profitability.

It is also important to note the MetaFi NFT connection, as it helps to implement the principles of DeFi in the metaverse. In what way? In fact, this contributes to the combination of various kinds of tokens within the framework of new approaches to community management. The combination of various important cryptographic characteristics creates the basis for a well-developed parallel economy.

MetaFi Structure

If you want to understand MetaFi in detail, you have to look at the important components that define its structure. Here are the important components you can find in the convergence between DeFi and metaverse.

  • The basics

The most important aspect in any MetaFi protocol is the basics, which are essentially the building blocks. The framework includes basic structures that serve as solutions of the zero, first and second levels. The basic basics help you build applications based on them, using common application logic and security.

  • DeFi

The most important foundation of MetaFi, DeFi, includes small financial applications available based on core frameworks or protocols. You can think of them as money legos that work like unstoppable apps providing complex financial dynamics with smart contracts.

  • Verses

The last component in the structure of the MetaFi crypto ecosystem belongs to Verses. Verses is, in fact, a set of domains or parallel Verses, from which the entire metaverse is built. The various virtual worlds should remain connected to the underlying layers of Verses in accordance with compatibility and cost-effective value transfer.

Challenges for MetaFi

The last and most important aspect in the introduction to MetaFi is the description of the tasks. When using DeFi applications in the metaverse, users can look for many benefits. However, the concept of combining both worlds is still under development. Therefore, it is possible to note some notable problems for MetaFi, which will serve as obstacles to wider implementation.

The most important problem of Metaverse DeFi convergence is directly related to the interaction of MetaFi NFT. Owners should have a clear idea of the value of their tokens for purchase, sale or loan under NFT. However, their assessment raises concerns related to uncertainty, usually on the part of creditors.

The fractionation of NFT in various MetaFi crypto applications also entails another problem in the form of legal and management issues. In addition, the different standards in the different blockchain networks also pose a major challenge for combining DeFi and metaverse.

To reveal the true potential of DeFi for metaverse is possible only by solving these problems.


The overall impression of MetaFi clearly shows how it combines the best of metaverse and DeFi. Surprisingly, DeFi gained significant popularity in 2020. However, the functionality of DeFi is limited and does not represent viable prospects for large-scale implementation in the future. On the other hand, the metaverse is growing as a digital analogue of the real world.

In such cases, using DeFi applications in the metaverse will not only complement the features of the metaverse, but also expand its capabilities. In addition to determining the possibilities of using DeFi in the metaverse, it is equally important to solve the main problems.