Metaverse Alchemy: Connecting Nfts, Crypto-Tokens, and Social Media in Web3 Platform Multinationals’ Success

Abstract

This paper focuses on the emerging internet phenomenon of Web3 platforms which are a new generation of multinationals. Using two popular metaverse platforms, Decentraland and The Sandbox, we examine the nexus between the platform NFTs (non-fungible tokens), the cryptocurrency (i.e., the native token) and the social media discussions around the platforms. We combine token price data with information from OpenSea and X (Twitter) and implement wavelet coherence analysis to examine the time-varying relationship between these three pillars of performance. Our analysis suggests that it is the NFT market (and not the cryptocurrency market) that drives the performance of the decentralized metaverse platforms. Social media discussions generate buzz and sentiment, acting as a catalyst of success. We contribute to shedding light on “the big question” in IB research (Peng, 2004) and on the issue of user adoption in the novel context of Web3 PMNCs. The practical implication of our research is that Web3 PMNC builders should design business models that provide utility to NFTs.

Keywords: metaverse, web3, platform multinational, business model, digital economy