The land boom in the metaverse: the new trend in the Real Estate Market
O Metaverse has the ability to transport individuals to virtually anywhere in the world, while allowing users to communicate digitally. In the Real Estate Market, increased advances in technology have resulted in a boom substantial in the sector, with an increasing number of people paying astronomically high prices for virtual land.
Buying land or property in an uninhabited blockchain-based world allows people to own a part of those digital worlds, where they can build whatever they want.
As a consequence, market revenue growth during the projection period was assessed at US$ 821.9 million in 2021 and the expectation is that it will reach a value of US$ 5,953.6 million by 2028 with a CAGR of 39.10% during the forecast period, according to a survey conducted by Vantage Market Research.
In addition, more and more companies and celebrities are taking an interest in this million-dollar business. In 2021, one of the biggest sales made was that of land at The Sandbox, on a property adjacent to that of rapper Snoop Dogg, for $450,000.
In this sense, The Wall Street Journal spoke with companies that invest in digital real estate to understand the economic model and the reason why so many investors are spending more and more in this universe:
https://www.youtube.com/watch?v=uIllSiXVfmI
After all, how does the process of buying and selling land in the metaverse work?
Metaverse properties can be purchased in the same way as buying an NFT (non-fungible token). In other words, it is a unique virtual item or collectible that can be purchased and that will be completely housed in the virtual world.
Like NFTs, real estate in the metaverse is purchased with cryptocurrency. Upon completion of the transaction, you receive an exclusive part of the code blockchain, which serves as Property Deed.
The idea is that a metaverse platform provides a connection between the virtual and real worlds. On Sandbox, for example, a metaverse platform, users have the opportunity to claim ownership of their own world. Lots of “land” are bought, sold, and traded.
Although anyone can buy a digital property, it is essential to identify the reasons behind this transaction and assess whether or not this is a good investment, since just as it opens up investment opportunities for those who would otherwise not be able to do so through traditional properties, for those who are adverse to the unknown and risk, this may not be the appropriate route.
What are the prominent players in this market?
Currently, there are numerous initiatives to increase efficiency in the way we design, build, buy, rent, manage, evaluate, finance, transact, insure, protect, inform, and sell real estate, resulting in many disruptive companies.
As PropTechs, by the way, represent exactly the technology startups that aim to serve the real estate market.
Among the main players operating in the virtual real estate market, we can mention:
- Decentraland
This is a decentralized platform built on the Ethereum blockchain, which is a technology that allows the creation of new tokens and smart contracts. These new tokens were marked as NFTs (Non-fungible Tokens), where each one represents a parcel of land in the metaverse.
- Axie Infinity
Axie Infinity is a role-playing game and trading platform that allows players to develop their own Axies - digital creatures based on blockchain technology. Her world is called Nursia and it has 7 types of land, each with its own uses and rarity.
- Aavigotchi
Aavegotchi is an open-source (world) cross-platform virtual reality game built on top of the Ethereum Blockchain. Players use unique avatars to negotiate with other players and explore locations across the planet. “Gotchiverse” offers land that can be purchased.
- Sandbox
The Sandbox currently holds the largest number of lands (over fifty percent) of any platform, totaling just over one hundred and sixty thousand. This new platform seeks to bring the land back into the spotlight, offering a constant increase in the population and the price of each property, as it becomes more desirable as an investment.
- Matrix World
This is the new competitor that has joined the list of blockchain applications that transact virtual land. The process for the transaction is simple and, using Blockchain technology, all transactions are honest and made without the need for a central body.
And just like any other type of property, they can be bought, sold, bought, and rented. The metaverse is still new and is still evolving, which leaves many wondering if investing in virtual real estate is worth the cost.
How much does a property in the metaverse cost?
The values of virtual real estate fluctuate according to demand, but have been showing an upward trajectory since then.
“At the end of December 2017, Decentraland — another virtual world platform — held its first land auction, where the land was sold for around US$ 20. At the end of 2021, the order price increased to $6,000. By mid-2022, prices more than doubled to around US$ 15,000/plot.”
With increased interest in the platform, the potential price of a metaverse property seems to be never-ending. However, most properties cost between US$ 6,000 and US$ 100,000.
https://www.youtube.com/watch?v=2TpZSXWT_2I
How can the metaverse impact the real estate industry?
A digitization of real estate processes and contracts It is a trend that is winning the world and the digital real estate agencies they need to be aware of this new market.
For investors, the metaverse mirrors the physical world. Once you have lots in the metaverse, you can rent them or sell them through virtual advertisements.
For homeowners, likewise, owners of digital land in the metaverse can rent kiosks, billboards, or prime locations to big brands that want to advertise.
For realtors and realtors, given the opportunities, the metaverse can represent new revenue streams, unique brand experiences, and even serve as a thermometer to improve the usability of physical properties and enable a new future of work.
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