In the Metaverse, people are willing to pay millions for land. Here’s Why?

In the Metaverse people are willing to pay millions for land.
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Furnishings with a Japanese theme. A panorama of the city. Elevator access is available. Clerkclirk made the decision to buy the penthouse flat as soon as he viewed it. He acquired another 70 residences in the neighborhood because he liked it so much.

Clerkclirk spent $92,000 on the condos in all. Despite their excellent locations, the 31-year-old Indonesian trader is not a real estate magnate, and none of the condos qualify as real estate. The units are digital plots in the metaverse of Worldwide Webb Land, a virtual environment hosted on servers.

“You can’t say no to profit,” Clerkclirk said, adding that he expected to sell his houses if the price rose. Clerkclirk, like many other traders in the metaverse, refused to reveal his legal identity.

In Worldwide Webb Land and other metaverses, huge sums of money are being spent on virtual real estate. Republic Realm, a metaverse investment corporation, paid $913,000 for a plot in Decentraland, another metaverse, in June. At the time, it was the largest deal of its kind. Six months later, the same corporation paid $4.23 million for 792 plots in Sandbox, yet another metaverse, from video game company Atari.

The concept of the metaverse has been around for a long time. One of the earliest is Second Life, a virtual gathering place that began in the aughts. Fortnite, a video game with a building component, as well as Roblox and Minecraft, are newer, more advanced examples. A metaverse is a shared, persistent digital area for meetings, games, and socializing at its most basic level. Some predict a future in which multiple metaverses are interconnected, while others see a variety of separate digital realms with their gates closed.

When Facebook was renamed as Meta, a nod to the Silicon Valley giant’s hopes to make its imprint in the metaverse as it did in social media, CEO Mark Zuckerberg revived and spread interest in the concept. It’s been a hot issue at trend-setting gatherings like SXSW last week and the Game Developers Conference this week.

People Are Paying Millions For Land in the Metaverse.
A penthouse in Worldwide Webb Land. 
Worldwide Webb Land

The rise of blockchain ledgers in recent years has aided the emergence of new metaverses, making it easier for people like Clerkclirk to acquire pieces of them. The digital property deeds, also known as non-fungible tokens (NFTs), that reflect ownership are stored on blockchains and can be resold in the future.

Decentraland, which began in 2017, and Sandbox, which appeared on the internet two years later, are the two most popular metaverses. Almost every month, new virtual lands are established. Clerkclirk’s penthouse in Worldwide Webb Land is only four months old.

“Our interoperability and accessibility set us apart,” a spokeswoman for Worldwide Webb Land remarked. The interoperability refers to the metaverse’s connection with over 300,000 NFTs, which you can use as an in-world avatar if you own one of the compatible NFTs. Worldwide Webb Land’s 2D visuals allow it to run seamlessly on a broad range of PCs and mobile devices. When questioned if speculation is driving the project’s land sales, the spokeswoman stated, “There are too many forces driving the market to point to just one.” A request for comment from Decentraland was not returned.

Clerkclirk was a pioneer in blockchain-based metaverses. He discovered $Land, a cryptocurrency, after purchasing $500 in bitcoin in 2017. He soon learned that $Land was the currency of Decentraland, which promised to be the first user-owned virtual world. Decentraland consists of 90,000 parcels that are registered as NFTs on the Ethereum blockchain.

Decentraland indicated a supply-demand imbalance to Clerkclirk. The quantity of parcels is set, but he believes that newcomers to cryptocurrency would rush in, driving up the price of bitcoin and Decentraland plots. He was absolutely correct.

In three months, his $500 bitcoin investment had grown to over $20,000 in value. Despite his skepticism about what you can do in a virtual world, Clerkclirk continues to invest in metaverse real estate on a regular basis, such as his Worldwide Webb Land penthouse.

He asks, “Are people going to spend the majority of their time in the metaverse?”

The expansion of the metaverse

It’s something that some investors are betting on.

Metaverse Group, a virtual real estate corporation based in Toronto, Canada, spent $2.5 million in November purchasing 116 blocks of virtual land in Decentraland’s fashion sector.

Andrew Kiguel, CEO of Tokens.com, a company that owns 50% of Metaverse Group, believes he got a good deal. Clerclirk’s reasoning is similar to his. The value of parcels in Decentraland will rise if more people get interested in the metaverse because the metaverse will do what social media does: deliver advertising.

Decentraland now has 800,000 users, compared to 40,000 at the start of 2021. Kiguel believes that the growth rate will continue to rise, at least for the time being. While a result, new and experienced Decentralanders will walk by his company’s prime virtual real estate every day as they spend time online. It will allow advertisers to get their ads in front of people’s eyes in the same way that social media platforms do.

“Every fifth scroll or so on Facebook or Instagram, you’re offered an ad,” Kiguel told me through Zoom. “We’re working on a comparable project, but at a much early level. We’re in the process of pre-purchasing ad space.”

The expansion of the metaverse
Decentraland is a metaverse similar to Second Life. It’s a simulation of the real world, where people can meet and socialize.
Decentraland

Metaverse Fashion Week, a fashion festival inspired by Fashion Week in New York and London, will begin on Thursday at Decentraland and Tokens.com. Dolce and Gabanna, Hugo Boss, and Tommy Hilfiger are among the brands that will participate. It will last three days, from Friday through Sunday, and Kiguel anticipates 500,000 people to attend the virtual celebrations.

Kiguel’s strategy is a case study on how to turn the virtual property into a profitable investment. Despite the fact that the fashion show will be held within Decentraland, landlords such as Metaverse Group will be compensated for the usage of their venues.

In the surrounding areas, after-parties are expected, providing property owners the option to charge for admission. Digital billboard space can also be sold by property owners, and businesses can bid on it just like they would in the real world.

Each metaverse has its unique method of enticing users. Decentraland works like a simulator, in which you create an avatar and interact with others in virtual worlds. Sandbox is a gamified environment. Sandbox, which was inspired by Minecraft, provides users with a wide range of tools for crafting objects, building homes, and even developing games.

Sandbox, unlike Decentraland, is not yet open to the general public. In October, a closed beta was held. Soon, an open beta will be available. The virtual property market, which includes a yacht that sold for $650,000, is already open to the public.

Prices are soaring in both Decentraland and Sandbox due to the promise that virtual land can be used to garner valued attention now or in the future.

“It’s not the fact that they’re blocky pieces of land that makes Sandbox land valuable,” said Yat Siu, co-founder of Animoca Brands, which owns Sandbox. “It’s the reality that it’s being built on by the most powerful people in the sector.”

This includes celebrities like Paris Hilton and Snoop Dogg, as well as corporations like Adidas and Atari. Snoop Dogg, who has a Sandbox house where he performs and hosts parties, is particularly deep. A celebrity’s arrival boosts property values: a block of land next to Snoop Dogg’s residence sold for $458,000.

sandbox

Function and speculation

True believers are convinced that the metaverse’s promise will be fulfilled. However, the current transaction velocity indicates that much of the interest in the virtual property may be unsustainable. Because of the quantity of short-term activity, determining the long-term commitment to these worlds is challenging.

Consider the town of Clerkclirk. He was motivated to purchase land in Worldwide Webb Land since the team behind it had already released a working product and planned to follow up with virtual reality games. However, as prices rose, the prospect of future work was no longer enough to persuade him to stay in the penthouse.

He acquired it for $36,000 on a Wednesday and sold it for $126,000 two days later.

Also Read: How did jobs look like in metaverse? 3 best metaverse home jobs exist in 2022

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