Definition | Virtual Real Estate – Metaverse Real Estate

Who would have thought that some would spend millions of dollars on land that exists only in virtual worlds? However, this reality does exist in metaverses such as Decentraland or The Sandbox.

Virtual real estate refers to buying, selling or operating land in a virtual world. It’s a market in itself. In total, more than $500 million was spent on real estate purchases in 2021 and April 2022, Insights estimated $1 billion in such spending during the year.

How to explain such enthusiasm? The fact that many companies feel they need to get a foothold as quickly as possible in a market that is seen as huge in the long run. The announcement of Mark Zuckerberg in october 2021 like what Facebook – rebranded as Meta by the way – went on to develop his own Metaverse, clearly accelerated the movementThe pre-existing metaversess like Decentraland, The Sandbox has benefited immensely from such an announcement. Several giants in their field have bought huge plots in such worlds: Atari, Carrefour, Adidas, Snoop Dog… For example, in December 2021 Adidas paid the equivalent of 1.7 million euros to acquire 144 plots in The Sandbox. At the end of November, Republic Realm (New York), had paid out $4.3 million for the purchase of 792 lots there again, on The Sandbox. It was then the largest purchase of virtual real estate ever.

The appeal of Fashion Street in Decentraland

On November 23, 2021, the Canadian company – a site for cryptocurrency investors – had already dropped $2.4 million to acquire an area of ​​565 m22 on Decentral Land. has acquired this land in the Fashion Street neighborhood and intends to make this space available to the virtual stores of luxury groups.

Andrew Kiguel, CEO of claims to have acted deliberately: he was an investment banker in the real estate sector for 20 years. Now he believes that virtual goods have a potential analogous to that in the real world. According to him, Fashion Street will be the equivalent of the Ve New York Ave. The purpose of such an operation is actually to give major fashion brands the opportunity to present their products on the Fashion Street. † If I hadn’t done some research and found out that these are high quality properties it would sound crazyexplains Kiguel. These are places for ads and events where people go to get together

A few weeks earlier, Decentraland’s Metavers Music Festival attracted 50,000 visitors. Andrew Kiguel says he uses the technology of blockchain related to virtual real estate: ” I can see the ownership history, what it cost and how a property was transferred from one person to another

Choosing a Virtual Good to Acquire

As theuniverse cryptocurrencies sometimes experience spectacular ups and downs, that of virtual real estate is relatively more predictable: prices generally rise, existing real estate generally rises in value over the long term, investors are increasingly numerous. Virtual real estate just happens to work the same way as real world real estate, which is often considered a reliable investment. Moreover, what makes the value of a virtual good is comparable to that of a good of the real universe: its rarity, its location and, of course, its immobility.

Investing in virtual real estate requires the same attention as in the real world. Anyone wishing to buy an apartment or a building must be well informed about the product in question, even if that means requiring the assistance of a specialist broker. It is important to take into account the immediate vicinity of the coveted country:

  • is it a high traffic area?
  • what are the development opportunities in the area?
  • what is the price of lots nearby?

Profitability will also depend on the exploitation that will be performed of the virtual place in question – for example entertainment that can attract many Internet users. It will also depend on the approval of the chosen metaverse over the months and years. If you bought land in Decentraland, The Sandbox or Somnium Space and over time this particular metaverse was no longer popular, then the acquired property would decrease in value.

The advantage over the real world, of course, is that it is easy and ultra-fast to buy land and you never have to pay property taxes, condominium fees, etc.

In practice

How do you buy such a good? They are sold in the form of NFTs which, remember, certificates from numerical properties fraud proof. So it is first and foremost necessary to hold a wallet (portfolio) of cryptocurrencies such as MetaMask or Trust Wallet.

After that, it is necessary to identify the available land on a map with detailed information about the occupied plots and the plots for sale. For example, free lots appear in green on the Sandbox marketplace. We can click on one of them and it will redirect us to OpenSea where we can buy it with the associated cryptocurrency. On Decentraland, the currency is Mana, on The Sandbox, it’s Sand, etc. Once on OpenSea, you can offer a lower price than requested, free for the owner to accept or decline the offer.

Once you acquire a particular plot, it will turn red on the map of The Sandbox to indicate that it is no longer available for purchase.

How to operate your virtual real estate?

Once you have acquired land, what can you do with it?

  • Rent out your space to companies

The plot that we have purchased can be used as a coworking space that can be rented out to companies for business meetings. It should be understood that sooner or later all the plots of a metaverse like The Sandbox will be acquired and therefore those who want to take advantage of them will have no choice but to rent them.

  • Create an Exhibition Gallery

At a time when NFTs are the wind at the back it is possible to create a virtual art gallery and rent out spaces to artists who want to exhibit their works.

  • Create an entertainment venue

One could similarly create a concert hall, a shop, a playground, a type of casino, etc. So in February 2022, the Manchester City team entered into a partnership with Sony to manage a football stadium in a metaverse. Rapper Snoop Dog, for his part, is developing “Snoopverse” on The Sandbox and this space will be focused on gaming and entertainment. Creating such attractions is especially popular on Decentraland or The Sandbox as far as we have their environments managed by their users: these platforms provide the tools to build and decorate the places and to create games or entertainment.

  • Advertise or sell clothes

Within a metaverseusers are represented by avatar and therefore some may be tempted to shine through the clothes or accessories they wear. They will therefore be tempted to visit stores that present such NFTs or even be attracted to certain advertisements. Some users have already started buying clothes for their avatars. If the purchased plot is close to a place with a lot of traffic, you can offer to buy your walls for display ads.

  • To organize events

One way to make your investment profitable is to organize events for which you have to buy a ticket: concert, conference, competition… You can also organize competitions or to give away (free distribution of tokens).

  • Sell ​​video game accessories

If you created a game within your plot, you could sell NFTs of elements of this game.energygifts of magic, etc.

Some will have a more sober objective: achieving long-term capital gains. And so they will buy lots on metavers in hopes of seeing their value explode and then resell their property for a remarkable profit. It is also possible to striker (immobilize) are tokens Sand, Mana or whatever, hoping they will increase in value.

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