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Metaverse real estate: how to become a rich virtual owner?

Le 13/07/2022
Metaverse real estate: how to become a rich virtual owner?

Investing in metaverse real estate is a bold gamble, but potentially very profitable for the future. Find out everything you need to know about buying and selling land in virtual worlds.

Metaverse is a new technology. Investing in this field presents many risks, but can also offer high returns.

However, it is important to be well informed before you start. Find out everything you need to know about metaverse real estate in this comprehensive guide.

What is metaverse real estate?

In the metaverse, properties are parcels of land in the virtual world. They are therefore virtual images. However, these spaces are programmable and can be used for play, socialising, hosting events or selling NFTs.

These are just examples, as the metaverse offers an unlimited number of possibilities. As the metaverse grows, the market for digital real estate is also likely to expand.

At the end of 2021, Facebook changed its name to Meta and announced its intention to focus on the metaverse. This has caused a boom in virtual real estate, which is expected to grow 31.2% per year between 2022 and 2028 according to analysts at Brand Essence Research.

Why invest in metaverse real estate?
Metaverse properties and land offer users a place to connect with each other. Individuals can use their digital lands to play games or socialise.

Creators can monetise the content of their property, by charging for access or selling their NFTs. Similarly, brands can use their virtual properties to promote their services, host virtual product launches or offer unique user experiences.

For real estate investors, these virtual parcels offer lucrative opportunities. As in the real world, metaverse properties can be developed and then sold or rented.

So there are already many possible uses for metaverse real estate. And over time, new concepts will emerge.

How much does real estate in the metaverse cost?
In 2017, Decentraland held its first LAND land auction at the Terraform Event. Each parcel cost about $20.

A few years later, in 2021, a piece of land was selling for an average of $6,000. By early 2022, prices had soared to approximately $15,000 per LAND token.

Convinced by the predictions of growth for the metaverse, companies are investing heavily in virtual properties. In October 2021, blockchain firm Tokens.com acquired 50% of the Metaverse Group for $1.7 million.

In November 2021, Republic Realm broke all records by purchasing a property in the metaverse The Sandbox for $4.3 million.

Growing interest in the metaverse is driving up prices. Virtual land sells for between $6,000 and $100,000, but can reach even higher prices.

In 2021, an anonymous buyer purchased a property adjacent to Snoop Dogg's in The Sandbox. This purchase cost him $450,000.

How to buy a property in the metaverse?
Buying a property in the metaverse is similar to buying an NFT. The proof of ownership of the property is a piece of code on the Blockchain. This code certifies who owns the land.

To start investing in metaverse real estate, it is therefore necessary to create a crypto wallet.  Some platforms only use specific cryptocurrencies.

Then go to the metaverse platform where you want to buy land and create an account. You will also need to connect your digital wallet to the platform. Choose a piece of land, and buy it.

It is also possible to buy land in the metaverse from developers or real estate agents, or even from other individuals. However, unlike in the real world, the market is not regulated, so you should be wary.

Where to buy metaverse properties?
Currently, the main metaverse platforms are Decentraland, Sandbox, Somnium Space and Cryptovoxels. In total, these virtual worlds contain almost 300,000 digital properties.

Sandbox
Sandbox alone accounts for 62% of the metaverse real estate market. Each LAND token costs an average of 11,000 dollars, but the best lots sell for between 20,000 and 30,000 dollars.

Virtual spaces can be bought or sold for a wide variety of use cases. Some become real family homes, others become commercial spaces, art galleries or entertainment venues.

Players can also sell, trade and buy voxel creations. Experiences can be created on LAND terrains, and monetised using NFT or SAND tokens.

Over the years, Sandbox has formed strategic partnerships with video game companies such as Atari, Square Enix, brands such as Shaun the Sheep and celebrities such as Snoop Dogg. These partnerships have enabled it to attract new users.

Decentraland
Decentraland is a 3D virtual reality platform based on the Ethereum blockchain. Land is purchased in the form of NFT LAND. Each NFT indicates the specific coordinates of the land on the network and its characteristics.

To purchase a LAND, users must have MANA tokens. These tokens are also used to purchase products and services within this metaverse.

The virtual world of Decentraland is divided into neighbourhoods, each with its own specific type of content. Users can walk through these different zones to interact, view or share content.

For creators and brands, these neighbourhoods allow them to target a more specific audience to deliver content to.

How to choose a terrain in the metaverse?
To choose the best terrain in the metaverse, it is important to consider several criteria. As in the real world, the geographical location is crucial.

You should also manage to choose a metaverse that has a future. For example, land in The Sandbox and Decentraland continues to increase in value as major brands such as Atari, Samsung, Miller Lite or Adidas become interested.

As a result, those who invested early in this metaverse have already been able to turn a profit. However, there is no guarantee that these metavers will always be successful in the future.

If you are planning to invest in metaverse real estate, look for land with potential for development. A location that is likely to have a lot of people on it may be more valuable than a deserted area.

To avoid spending a fortune on land at the epicentre of a populated area, however, you can choose a location nearby. This way, you can just move in and wait for prices to rise.

Figures and statistics on metaversions
To better understand the phenomenon of metaverse real estate, here are a few figures and statistics testifying to its success.

In 2021, the Sandbox metaverse token LAND gained 15,000% in value. This token also represents the largest transaction volume over 2021 with a total of $350 million for 65,000 transactions.

Also in 2021, land sales on the four main metaverse platforms brought in a total of $501 million. By 2022, the amount is expected to double to $1 billion.

According to a study by Emergen Research, the value of the metaverse market was $47.69 billion in 2020 and could reach $828.95 billion by 2028.

The average price of a plot of land on the main metaverse platforms has increased from $1265 to $12,684. Finally, at present, only 25,000 individual crypto wallets have invested in metaverse real estate...

The dangers of metaverse real estate
According to analyst predictions, metavers are expected to grow by leaps and bounds over the next few years. However, it is still an emerging industry and far from stable.

Keep in mind that if a metaverse platform closes permanently, all the land and assets of that metaverse will also disappear. This is a major difference from real-world land, whose main advantage is that it is eternal.

Furthermore, it is difficult to estimate the real value of a property in the metaverse. It is digital land, whose scarcity is artificial and whose future is unpredictable. Their value also depends on the value of cryptocurrencies, which are extremely volatile.

Given all these uncertainties, investing in metaverse real estate is highly speculative. There is a real risk of losing all the money you put in at the drop of a hat.

However, the potential return on investment is also huge. Before you make a decision, keep researching the market and choose your land carefully.

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