25 Oct 2022
Digital real estate 101: The why and how of investing in land & properties in the Metaverse
People have gathered in digital worlds since the early Internet’s chat rooms and gaming lobbies. However, the digital world is consuming a larger percentage of our activities and time than ever before — and it’s becoming more and more tangible.
An introduction to digital experiences
The well-known Zoom background made it possible to isolate the speakers in a video chat from the actual rooms in which they were situated. We are now able to create private digital environments as a result. People rapidly began to personalize these spaces, using a variety of backgrounds.
And now, doors are starting to open up that allow us to add a new layer of immersion, giving a feeling of physical structure and geography. Metaverse platforms create new avenues for exploration and interaction.
An empty metaverse, however, resembles an unpopulated globe or island. Even though it may be lovely to stroll through and explore, it needs people to create and engage in order for it to come to life. This brings up the question: how should we approach the subject of what to build for the metaverse?
As straightforward as it may appear, we use digital spaces to create "outside possibilities" that aren't available in the physical world. This means that the activities people want to conduct in such places and how the opportunities of the digital space support them in doing so determine the value of those spaces.
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Metaverse land and real estate
Imagine a virtual world where you can join your friends, family, acquaintances, and others in total immersion by just logging onto your device and attaching your AR/VR headset.
Virtual properties and digital plots of land not only have limitless potential but they can also be bought and sold as NFTs. The fact that NFTs provide digital ownership is a crucial factor in this. NFTs allow people to actually own, as opposed to just renting, specific areas of metaverse land and locales for their own or collective use. This is made feasible by blockchains, a key component of web3, which offer decentralized, impenetrable, and openly accessible records of who owns what digital assets.
Instead of considering the full geography of the metaverse, inhabitants are likely to value land and real estate based on what's nearby. We might anticipate seeing bustling shopping centers, tiny cities, or even complete virtual worlds that resemble islands in virtual space and are connected by "distances" that individuals can simply teleport over.
The constraints imposed by real-world geography appear to be less significant given that we may own property parcels in the metaverse and earn passive rental revenue from them. In this approach, the metaverse offers a singular chance to experience digital reality first-hand, while also gaining benefits in the actual world.
People's perspectives on consumer technology are changing as a result of the metaverse. The examples that follow show potential directions for (real estate) investors who are thinking about making their next investment in the metaverse.
Applications of digital real estate
Blockchain Gaming
The market for blockchain games is expanding quickly, with developers like Animoca Brands, Mythical Games, Sky Mavis, and Dapper Labs raising hundreds of millions of dollars in venture financing. NFTs play a significant role in several games, both as digital land and as objects or weapons.
Land parcels can be found in gaming worlds like Illuvium or Axie Infinity as well as open metaverses like Decentraland, Otherside, United States of Mars, or The Sandbox. By building, creating, and renting out your land or properties on your land, you are often able to generate passive income in the form of tokens.
Entertainment
Virtual concerts have grown in popularity over the past two years, with artists such as Justin Bieber, Post Malone, Deadmau5 and Twenty One Pilots performing on stages in the metaverses of Decentraland, Roblox and Fortnite. These entertainment options will probably develop in the future, enabling you to participate in virtual theme parks, watch movies with friends, and other similar activities.
Digital (retail) stores
Numerous well-known clothing companies, including Nike, Ralph Lauren, Louis Vuitton, Tommy Hilfiger, Balenciaga, Burberry, Gucci, Vans and Zarahave have opened stores in or formed collaborations with metaverse ventures in the past two years. It's not just fashion brands that are stepping into the digital realm, however — Heineken recently did a launch event for their new beer ‘Heineken Silver’ at their Heineken Brewery in Decentraland, while McDonalds is planning to build virtual restaurants that offer home delivery.
Investing in land & properties in the Metaverse
After a lot of talking about digital real estate and its use cases, let’s have a look at our favorite tools you can use to identify trends, buy a plot of land or keep track of the success of your holdings.
Parcel.so — Parcel is a one-of-a-kind platform, developed to provide a one-stop shop for all requirements relating to virtual real estate. Contrary to other NFT marketplaces, Parcel is specifically designed to offer the tools required for designing, constructing, etc., on these virtual landscapes.
Wemeta.world — WeMeta offers insightful statistics on metaverse platforms. You may easily keep track of general market information (such as total sales volumes and the average market capitalization across the leading platforms) and, for those who are interested, go even deeper (for instance, monitor the sales volume over the past 24 hours and the floor of each platform listed).
NonFungible.com — With the help of this tool, you can quickly get an overview of important metrics including top sales, market volumes, active wallets, primary/secondary buyers, and unique buyers/sellers.
LandIndex.io — Landindex allows users to search, evaluate, and make plans based on land values in numerous Ethereum metaverses. It offers several intriguing aspects, including trend lines, sales density, and many others.
Opensea.io — Let’s not forget OpenSea, the biggest NFT marketplace out there. Through this marketplace, you should be able to find almost any NFT, including plots of land, you could be looking for.
Closing remarks
It appears that the discovery of virtual lands and digital real estate is just getting started, based on the amount of money and partnerships that have jumped on the metaverse bandwagon in the last two years. However, the economic climate was different then. Which projects will endure over time and who will be abandoned will be revealed in the months and years to come.
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