Life in the Metaverse
Tokenized real estate has met the metaverse, creating something new: virtual real estate. Virtual developers are sweeping millions of dollars’ worth of crypto coins into property deals. They see a robust online economy in the making.
Are they dreaming?
Before you answer that, consider that Tim Cook dropped some major hints about Apple’s metaverse goals in the company’s January 2022 earnings call. Atari sells “premium assets” in the metaverse. Nike is hiring a Director of Metaverse Engineering. The pioneering blockchain ETF group Grayscale says the metaverse will soon become a trillion-dollar marketplace. Fortune.com recently mused that metaverse real estate could be a multi-trillion-dollar opportunity.
Magnates of the Metaverse
People can enter the metaverse and buy nonfungible tokens, or NFTs, which are blockchain-based signifiers of assets, including real estate.
Virtual land has scarcity value. As desirable parcels are snapped up, owners of prime spots will be able to make deals and lease them out. Already, Tokens.com has invested heavily in Decentraland’s fashion district. Fashion Week in Decentraland will unfold in March, drawing audiences to virtual fashion shows and sales of clothes (which can be virtual or physical). Major sports companies are, in turn, planning metaverse shows to coincide with their traditional championship events. And there are athletic shoes and gear to be sold.
Then there’s SuperWorld, which maps the surface of Earth, and has billions of virtual parcels to sell in tokenized form. Any location that exists in the real world is mirrored in the virtual one. Live, dine, travel and shop in style, using your personal avatar. Pick out clothes, shoes, and cars to match your tastes. Adorn your home in the metaverse with flashy fountains or immersive art at a wide range of price points.
One of the high-profile trend-setters of the metaverse is Snoop Dogg, who’s getting ready to host events in The Sandbox. A 3-D early access pass for the Snoopverse costs $1,911 USD as we go to press in early 2022. A virtual plot next to Snoop Dogg’s digs in the Snoopverse sold in December 2021 for $450,000. It might pay off. Owners of land in the development can come up with their own ideas to entertain guests in the Snoopverse — quite possibly a very lucrative undertaking.
Is Becoming a Metaverse Mogul on Your Bucket List?
There are several places where investors can map out, buy, rent, and sell metaverse real estate. The Sandbox and Decentraland are prominent choices. You can be notified in advance for scheduled sales of LAND (all caps in the metaverse) in The Sandbox, or start developing your parcel in Decentraland and rent it out. The more people buy up and build up their maps, the more valuable a platform’s currencies become, too.
While there is plenty of wealth to be created in the metaverse, investing in it is a high-risk proposition. As PwC (which has invested in the Metaverse) explains:
As in the internet’s early days, this innovation likely contains pockets of speculation, overvaluation and unwise investment — especially since a true metaverse, as tech visionaries imagine it, is still years away. Not every company needs to become a metaverse leader today.
Moreover, the decentralized finance world has yet to be regulated. Imagine how elaborate fraud can be on a virtual platform. For just one example, how would the uninitiated know which assets have been bought and sold and bought again by the same person, raising the price each time?
So, it’s best to tread carefully. Otherwise, it could be easy to buy some oceanfront property in Arizona… Come to think of it, that’s probably already taken.
Supporting References
Debra Kamin for The New York Times: Investors Snap Up Metaverse Real Estate in a Virtual Land Boom (updated Dec. 3, 2021).
Adam Clark Estes for Vox.com: Real Estate Has Gone Meta (Dec. 2, 2021).
Akash Sriram and Subrat Patnaik for Reuters: Apple Shares Hold Up to Tech Rout on Strong Results, Metaverse Tease (Jan. 28, 2022).
Samantha Hissong for Rolling Stone: Someone Spent $450,000 for ‘Land’ Next to Snoop Dogg’s NFT House (Dec. 7, 2021).
Kristi Waterworth for MotleyFool.com: Is Metaverse Real Estate a Smart Investment? (Dec. 10, 2021).
Photo credits (both): Mo, via Pexels.