JPMorgan Opens Onyx Lounge In Decentraland

The largest bank in the United States, JPMorgan, has made its foray into the metaverse, opening a lounge in Decentraland and looking for opportunities in the metaverse. According to JPMorgan, the metaverse could potentially bring in a revenue of $1 trillion per year. 

With this move, JPMorgan becomes the first bank to enter the nascent world of the metaverse. 

Business Lounge In Decentraland 

JPMorgan announced its arrival into the metaverse with the opening of the Onyx Lounge on Decentraland. The lounge is named after the banking giant’s suite of permissioned Ethereum services. Along with the unveiling and announcement, JPMorgan also released a paper that detailed how businesses can take advantage of new opportunities in the metaverse. 

JPMorgan’s head of crypto and the Metaverse, Christine Moy, stated in an email conversation, 

“There is a lot of client interest to learn more about the metaverse. We put together our white paper to help clients cut through the noise and highlight what the current reality is and what needs to be built next in technology, commercial infrastructure, privacy/identity, and workforce in order to maximize the full potential of our lives in the metaverse.”

Growing Popularity 

With the growing popularity and acceptance of crypto and blockchain products such as NFTs, there has also been a significant increase in interest in the metaverse by users and large businesses alike, driven by integrated financial applications. We have seen several multinational companies make their foray into the metaverse. 

Recently, Samsung opened a virtual version of its New York Store in Decentraland, while Barbados opened a metaverse embassy in Decentraland. Institutions adopting the metaverse follows a growing trend where institutional investors have been turning their backs on traditional investment avenues such as Gold, choosing instead to hedge their bets on Bitcoin, calling it a better hedge against inflation. 

An Increase In Value 

According to JPMorgan’s assessment, the average price of land in the metaverse has more than doubled towards the end of 2021, with prices jumping from around $6000 in June to around $12,000 in December. This price increase has been noticed across all of the primary web 3 metaverses (The Sandbox, Decentraland, Somnium Space, and Cryptovoxels. 

According to JPMorgan’s report, the virtual real estate market could soon see services found in the physical market. 

“In time, the virtual real estate market could start seeing services much like in the physical world, including credit, mortgages, and rental agreements. It added that decentralized finance (DeFi) collateral management could well come into play and that rather than traditional finance companies, this could be done by decentralized autonomous organizations (DAO).”

According to JPMorgan, the metaverse has an opportunity to bring in $1 trillion per year in revenue, with more creators monetizing Web 3 in newer ways. Analysts have predicted that the initial total addressable market (TAM) of the metaverse in China alone is around $4 trillion, with the figure projected to cross $8 trillion once the metaverse gains more popularity. 

Scope For Improvement 

JPMorgan also attempted to illustrate the hype and the reality, stating in its report that several areas could use significant improvement. These areas include the user experience, performance of avatars, and commercial infrastructure present in the metaverse. The report stated, 

“We believe the existing virtual gaming landscape (each virtual world with its own population, GDP, in-game currency, and digital assets) has elements that parallel the existing global economy. This is where our long-standing core competencies in cross-border payments, foreign exchange, financial assets creation, trading, and safekeeping, in addition to our at-scale consumer foothold, can play a major role in the metaverse.”