Analyzing The Virtual Real Estate Boom in The Metaverse

Real Estate in The Metaverse

Fueled by blockchain technology and Non-Fungible Tokens, the metaverse is indubitably one of the hottest attractions for businesses and investors seeking to purchase virtual real estate. The idea of virtual land may come as a surprising fact to a lot of people, however, for the ones familiar with popular games such as Clash of Clans, The Sims, and Farmville, it might not sound like an alien deal. In recent months, we have witnessed individuals, as well as mega-corporations, bid millions of dollars for a piece of land in the metaverse. 

Before we delve into the significant aspects of buying and selling lands in the virtual landscape, it is important to first understand what metaverse really implies for the real estate sector. For the uninitiated, the metaverse is essentially a digital realm with no boundaries. Imagine a virtual world where you can play, meet new people, shop, buy, sell, roam around – and potentially do almost everything that you can do in real life. It should be noted that the metaverse is not a replacement for reality but it is, in fact, transfiguring and enhancing how you see and perceive things in the digital space.

The Increasing Demand For Metaverse Real Estate

The metaverse describes a vision of an interconnected 3D virtual world, where digital and real worlds are integrated and brought to life with technologies such as Virtual Reality (VR) or Augmented Reality (AR). This neoteric, immersive environment can be accessed through the likes of metaverse hardware and gadgets such as AR glasses, VR headsets where users can meet and communicate with each other as digital avatars, create content, and explore new ideas.

Currently, there are several individual metaverses in existence already – for instance, virtual worlds like Decentraland and virtual gaming platforms like The Sandbox. Just as in the real world, it is already, and increasingly will be possible to buy and sell things in the metaverse through NFTs including real estate.

Moreover, with the emergence of the latest and groundbreaking innovations in metaverse development services, we have seen potential investments in virtual lands within the expansive metaverse. Among the latest to dive in is PwC, having purchased land in a virtual gaming world – The Sandbox, followed by investments by Adidas. Another investor recently bought land for $450,000 in Snoopverse, a metaverse that a well-known artist Snoop Dog is developing within The Sandbox. Moreover, Tokens.com’s Metaverse Group also purchased a plot of land for $2.43 million in November on the virtual platform Decentraland.

These deals have come into existence amid the rise of ‘metaverse’ solutions – a term that has been used tremendously as of late, including when social media giant Facebook rebranded its name to Meta in October 2021.  

Also Read: The Role of Blockchain Metaverse in Digital Transformation

The Correlation of Virtual Lands and NFTs

Non-Fungible Tokens or NFTs have been one of the most significant methods for exchanging value in the metaverse. Although NFTs have been primarily tied to things such as digital art, a myriad of assets are also being linked with it including real estate. Platforms like OpenSea have new plots of land to be bought as NFTs and they even have virtual houses for sale. 

Moreover, in order to ensure that virtual real estate has value, the entire supply is largely limited – a concept of economics, also known as scarcity value. For instance, Decentraland is made up of 90,000 parcels or pieces of land, each measuring around 50x50 feet.

Nevertheless, we are already witnessing instances where the value of the real estate in the metaverse is going up. In June 2021, Republic Realm, a digital real estate investment fund, spent nearly $913,228 at the time of sale to purchase a plot of land in Decentraland as NFT. In November 2021, the Metaverse Group also purchased a piece of land in Decentraland for nearly $2,428,740 at that time. It turns out that the plots of land that the Metaverse Group acquired were in fact smaller than the former – precisely 116 parcels of land as compared to 259 land parcels purchased by Republican Realm.

Well, it is not only Decentraland that is witnessing this uptrend in the land value. Other platforms and gaming worlds such as Axie Infinity are also claiming the metaverse real estate value is climbing. 

The Appeal of Digital Land

As the metaverse is built out, many individuals, businesses, and organizations are joining online communities. In several instances, they are acquiring virtual things such as items used in online games, and to store these pieces of stuff, they need to have digital homes. 

Companies have also started to leverage digital real estate for marketing and advertising. Moreover, in the eCommerce segment, retailers are setting up immersive and hyper-realistic virtual stores in the metaverse where users can purchase something for both digital and physical worlds. If we talk about the entertainment industry, superstars such as The Weeknd, Ariana Grande, and Justin Beiber have also held concerts in the metaverse. As more people and businesses are jumping on the bandwagon of shopping, playing, and hosting events in virtual spaces, it is further driving the value of metaverse real estate. 

Blockchain Technology: The Key Enabler of Metaverse Development Services

There are various factors involved such as buying and selling lands in the metaverse with utmost safety. To facilitate transparency, security, accessibility, and proof of digital ownership, blockchain technology plays a pivotal role in realizing the borderless metaverse. 

Secondly, blockchain technology makes it extremely difficult for any land scams to take place in the metaverse. It is basically a distributed ledger, meaning that every transaction that takes place on the blockchain network is recorded, bringing more transparency and immutability to the transactions. This alleviates any change of virtual real estate frauds such as selling without authorization, delays in possession, fake promises, and forced cancellations. 

Multi-blockchain networks in the metaverse enable speedier liquidity deployment while also offering comprehensive security and trust.

Summing Up

At Oodles Technologies, we believe that the metaverse development services will fuel neoteric innovations in every possible sector. In the coming years, it will ultimately mature into a fully functional digital economy, furnishing a synchronous digital experience that is as interwoven into our lives as the internet, social networking, and email are now. 

With that note, organizations and businesses are capitalizing on infinite possibilities that metaverse solutions offer and that is indubitably going to be a trillion-dollar opportunity in the future. Please note that there are still plenty of land plots that are yet to be purchased whilst some mega-companies are already developing virtual real estate for tremendous opportunities. If channeled in a correct way, the potential of real estate in the metaverse is, without a doubt, unimaginable.

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