Virtual land is becoming a popular commodity as the future of immersive, interoperable 3D virtual worlds approaches. This year’s virtual real estate market is expected to be worth $1 billion, with another $5.37 billion expected between 2022 and 2026. So, if you’re interested in learning more about this subject, look no further! We’ve put together a quick primer for you.
Why would I buy virtual real estate? If you’re asking yourself this question – you’re not alone. The metaverse has only emerged as a concrete concept in the last year, yet plots of prime virtual land are being snapped up for millions of dollars. Clearly, something is happening in the world of virtual real estate and it’s time we took notice.
Before Facebook rebranded their company to Meta, the metaverse was a well-kept secret. Now, the cat is out of the bag! The metaverse has been hailed as the future of our internet – a far more immersive, 3D experience, where we can partake in virtual activities with a high degree of presence.
In the metaverse, thanks to cutting-edge technology, we will be able to enjoy and feel experiences like attending a live concert, walking around a museum, playing games with our friends or collaborating with colleagues. All this will take place in virtual environments – metaverse platforms – created by the leading tech companies like Microsoft, Meta, Apple and crucially, emerging blockchain communities like Yuga Labs, The Sandbox and Decentraland.
Thanks to non-fungible tokens (NFTs), we can now buy virtual land in the metaverse and our purchase can be proven irrefutably through smart contracts on the blockchain. Therefore, our plot of land in the metaverse will be an NFT and the ownership is recorded on a public ledger, along with every transaction made on the blockchain. Empowered with the ownership of digital assets, we can buy, sell and rent land, much like in the real world.
Thus, big brands and celebrities have seen an opportunity to buy land in the metaverse, banking on its future potential. Indeed, many brands perceive the metaverse as the next major hub for communicating their key message, connecting with fans, hosting virtual events and advertising products.
The most significant metaverse land purchase to date took place in The Sandbox, which is an open virtual world consisting of 166,464 ‘parcels’ of land. The transaction was between Republic Realm, a metaverse developer, and arcade game legends Atari. Indeed, the acquisition made by Republic Realm, who bought 792 parcels of real estate for a total of $4.28 million, is the biggest virtual land sale in history.
Atari and Republic Realm will co-develop their metaverse platform within The Sandbox, where gaming experiences will be built and Atari even has been developing its own, Las Vegas-style virtual casino.
Also in The Sandbox, you will find Snoop Dog, who owns 122 plots of land there and has built a mansion within his ‘Snoopverse’ estate. Recently, Snoop released a new music video ‘The House I Built’, celebrating his involvement in The Sandbox Metaverse. If you haven’t seen it, it’s an absolute classic – check it out.
Snoop Dogg has been actively connecting with his fanbase in the metaverse and plans to host virtual hangouts, private parties, NFT drops and exclusive concerts on his virtual land. Naturally, Snoop moving into The Sandbox drove up prices in the area. In fact, a plot of land next to Snoop Dogg’s estate was bought for $450,000.
Also in The Sandbox, Adidas bought a plot of land and their Chief Digital Officer, Scott Zalaznik, said of the purchase: “Blockchain is one of the most innovative technologies of this generation. We see it unlocking boundless potential to connect with our members.”
“The foundation we are building with Web3 will lead to new creative opportunities for partnerships, engagement through digital goods, and a path towards a more inclusive future.”
Additionally, another high-profile landowner in The Sandbox is Samsung, who cited the platform as an “on-ramp to the metaverse” and three consumer-facing layers of “experiences, discovery and the creator economy” as key to their metaverse vision.
Meanwhile, in Decentraland, two notable landowners are Sotheby’s and JP Morgan, while several famous luxury brands, such as Dolce & Gabbana, Etro, and Estee Lauder participated in their Metaverse Fashion Week in March.
Communities forming in the metaverse
The rise of the blockchain and NFTs has given rise to a wave of decentralized communities, who are buying land as an investment into an exclusive community. For example, the multi-billion dollar company Yuga Labs – creators of Bored Ape NFTs – conducted the largest NFT mint in history last weekend.
The mint consisted of 55,000 plots of land in ‘Otherside’, sold at 305 ApeCoin each ($5,800), which all sold out within hours and generated over $300 million in revenue.
In the process of this historic mint, the Ethereum Blockchain was sent into a frenzy. Transaction fees on the blockchain soared as the Yuga Labs community rushed to get their hands on their own ‘Otherdeed’ – a name given to the individual plots of land in Otherside.
What can Otherdeed owners do with this metaverse real estate? Essentially, as an Otherdeed owner, you will be granted access to an exclusive, immersive game created by Yuga Labs, which is still under development.
More importantly, you’re buying into the community and as we’ve seen with the rise of cryptocurrencies and the blockchain – community is powerful. Community gives a sense of ownership, belonging, identity and meaning, and none have achieved this better than Yuga Labs in the NFT space, with their collection of Bored Apes and the Bored Ape Yacht Club (BAYC) community.
Moreover, owning virtual real estate in a community like Yuga Labs could have tangible real-life benefits. For instance, exclusive parties and in-person meet-ups have been organized for NFT holders, bringing the community to the physical world.
At the time of writing, the floor price for Otherdeeds on the Opensea Marketplace is 3.68 ETH, which is in excess of $10,000 USD. Hence, speculative investment in the metaverse can yield quick profit in a matter of days, if that’s your thing.
Buying virtual property
So – you’re ready to make the leap and buy a slice of metaverse real estate. Whether it’s for branding purposes, speculative investment, or community, the first step is to get yourself some crypto.
The key to owning land in the metaverse is owning the relevant cryptocurrency and each virtual world has its own native crypto, which requires a compatible wallet. For example, you will need to download a wallet called Metamask or Bitski to store ETH, the cryptocurrency required to use the Ethereum blockchain.
Most metaverse platforms are built on the Ethereum blockchain, such as Decentraland, The Sandbox, Otherside, Somnium Space, and Cryptovoxels. Hence, to buy your virtual land, download the relevant crypto wallet, sign up to a decentralized exchange like Binance, convert your real money (fiat currency) into ETH, then use your ETH to buy the native coin, whether it’s SAND (The Sandbox) MANA (Decentraland), ApeCoin (Otherside) or another.
These 5 steps can be followed:
- Download the relevant crypto wallet browser extension (Metamask etc.).
- Sign up to a decentralized cryptocurrency exchange that supports the native coin you wish to purchase (Binance, Coinbase etc.).
- On the exchange, convert your fiat money (USD, etc.) into the required cryptocurrency and send it to the relevant crypto wallet browser extension.
- Once you have the native tokens in your wallet, proceed to the metaverse platform you wish to make a purchase on.
- Once there connect your wallet extension to the platform, sign the required permissions, and proceed to buy your virtual real estate on the platform, usually in the form of parcels. If the land is sold out (e.g. Otherside), you can always buy the land on a secondary marketplace (e.g. Opensea).
It’s important to mention, that most of these metaverse platforms are currently under development and far from being complete, immersive 3D virtual worlds. Therefore, before you buy virtual land, be sure that you’re happy with the project. Get a feel for their community, roadmap, investment, and vision for the metaverse upon which your virtual property will reside.
Depending on how things play out in the real world, your land could be prime real estate in years to come, a bustling metropolis housing a thriving community of like-minded individuals. Conversely, your real estate could lose its value if the project runs out of steam. Hence, that’s why it’s essential that you research the project you’re investing in.
Investing in metaverse real estate
If cryptocurrency adoption continues to rise, millions could be flocking to some of these emerging metaverse platforms on the blockchain. With innovative events taking place, like Metaverse Fashion Week in Decentraland, the potential of consumer engagement in virtual worlds is clear, even if it is nowhere near being realized yet.
The levels of immersion will get richer and deeper as the technology develops and the user-friendliness is bound to get smoother.
Indeed, metaverse projects are already starting to address and break down the barriers to entry as they aim to capture mainstream adoption. Blockchains will find ways to make it easier, cheaper, and more seamless to get on board as time goes by, and buying virtual land will become a relatively simple process.
Investing in virtual real estate is a big risk during this experimental phase, but it’s a risk many will see as calculated – based on the sheer volume of money and resources that is getting pumped into the metaverse. It’s truly unprecedented and whether or not you believe in a future dominated by virtual reality technology (VR), augmented reality (AR), mixed reality and the like, metaverse platforms are arriving and bringing new levels of ownership and freedom to the user experience.
Real metaverse land ownership
Andrew Kiguel, CEO of Tokens.com, spent $2.4 million in land in Decentraland’s fashion district and said to CNBC in an interview that the metaverse was a “multi-trillion dollar opportunity” and that in making the purchase he was “pre-purchasing advertising space”. Kiguel said he had gotten a “fantastic deal” with the land and believes the location is “priceless” considering the opportunities he will have as the traffic increases within Decentraland. He plans to rent the space out to apparel brands for storefront experiences and virtual events, much like the Metaverse Fashion Week.
Similarly in The Sandbox, you are empowered to build your own communities and monetize your land through creating engaging experiences, specifically games. If you can figure out how to build immersive experiences, using the software provided, and create enough value for others to enjoy, the opportunities are there for monetization. What is more, the profits, as the true owner of the land, are yours.
In the immediate future, each metaverse project will offer you something a little different, whether it’s a haven for fashion brands, games, or interaction with an exclusive community. Thus, if you’re buying metaverse real estate as a business decision, choose wisely! The community of each project is its driving force and you will be able to get a real feel for the community by dropping into the project’s social media channels – Discord and Twitter being the big ones in this space.
If your decision to buy land is motivated by a sense of community and a strong belief in the growth of that community, then your decision will be significantly easier.
Many metaverse projects are run as Decentralized Autonomous Organizations (DAOs), which means the community makes major decisions, which impact the project’s roadmap. That alone can be incredibly empowering for its members.