The introduction of cryptocurrency and decentralized assets changed the world, even if we don’t yet realize its fullest implications. Like any new frontier of technology, innovation is extremely rapid and new ideas and products are coming out each day. One word seems to be catching a lot of attention, however, and people are a bit confused as to what exactly it is. The metaverse is a constant topic, and recently, real estate in the metaverse has become all the rage. Today, we are going to talk about real estate in the metaverse. Specifically, what is real estate in the metaverse and why would you want to own it? Let’s get started.
What is the Metaverse?
Before you can understand real estate in the metaverse, you need to have a solid understanding of what the metaverse is. Thankfully, it isn’t that hard.
The metaverse is a network of digital worlds and virtual spaces where users can play games, interact with one another, and shop for products in real-time.
With an augmented reality headset, for example, a user can join a virtual chatroom with friends, only instead of being physically present, a digital avatar is present and interacting in a virtual environment. Through the headset, users can move, talk, laugh, and engage through their avatar in this digital space.
The metaverse is the combining of multiple virtual spaces into a cohesive network that can interact with one another. For example, after seeing a movie with your friend in a digital space, you can then play a racing game and virtually drive through a digital recreation of the Italian coast.
As technology advances, further integration into real life will become more common and useful. Examples of this include trying on digital shirts on a perfectly-modeled avatar to see if something ordered online will fit you in real life as it does in the advertisement, or attending an office meeting solely through your headset.
What is Digital Real Estate?
Digital real estate is the commodification of the virtual spaces within the metaverse. As different platforms create different spaces to engage with digitally, they are beginning to offer the ability for investors to purchase the rights to certain digital spaces within their platform. Remember that movie you could watch with your friend in the above example? Well, with digital real estate, a buyer can purchase that “digital land” that the movie theater is sitting on.
Digital real estate within the metaverse is extremely novel, but it allows users to have proof of ownership of certain digital spaces and products. The underlying technology for digital ownership is known as NFT technology, a term that is often misunderstood.
NFT stands for Non-fungible tokens. An NFT is a tag that can be associated with digital objects to provide permanent ownership rights to an individual. This tag can’t be lost or stolen, either, as it exists on the blockchain, a vast network of computers that keep identical running ledgers. Since this ledger (containing the proof of ownership known as an NFT) is located on thousands of systems all over the world, it is extremely difficult to fool or trick. In the digital world, these collective ledgers (blockchains) allow for the ownership of the digital property to be possible.
What is Real Estate in the Metaverse Used For?
When you first hear about the metaverse, it may seem a bit silly. Why do things through a headset when you can do them in person or online? While that may be the opinion of some, the possibilities provided by the metaverse are growing.
Currently, there are a few large organizations with metaverse platforms being developed and used. Let’s look at one of the most popular to see what digital real estate is being used for.
Sandbox is one of the largest metaverse platform creators around. The digital places that a user can visit within the Sandbox metaverse are small parcels of digital land, known as LAND. LAND is built on NFT technology and can be traced back to an owner. Once you own a piece of LAND, Sandbox then gives the user the right to build games and monetize experiences on that LAND. Since there are only 166,464 parcels of LAND, securing yourself as a verified owner of LAND is quite exclusive. As technology advances, the LAND only becomes more valuable as more useful things are created and more people join the Sandbox metaverse.
The most common uses for metaverse real estate are game development and monetized experiences. Game development could include creating a digital hunting ground where rare NFT-based animals exist and can be displayed in a virtual home. Users could then charge money to enter the hunting ground and take their shot at a rare NFT-based trophy that would forever belong to them without a copy.
What is the Most Expensive Piece of Real Estate Sold in the Metaverse?
With so many platforms and so much land, you may be wondering just how much it costs to get in on the digital real estate boom. One of the most expensive plots of land ever sold is known as the Fashion Street Estate. This transaction happened on the Decentraland platform and used the cryptocurrency $MANA. The total purchase included 116 parcels of land, totaling about 6,090 square feet in the Fashion Street district within the Decentraland metaverse. The total cost of the 116 parcels equated to USD 2,420,000 at the time.
An even more recent purchase on Sandbox tops the highest purchase on Decentraland by quite a bit. This purchase, totaling USD 4.3 million, was acquired by Republic Realm, which was purchasing the land from the gaming company, Atari. As of the writing of this article, this Sandbox purchase is the highest metaverse purchase of real estate to ever happen.
While it may seem outrageous, it is valuable to investors and individuals who believe in the future whichever platform they happen to be buying on.
How Do You Buy and Invest in Real Estate in the Metaverse?
Despite being expensive, it’s quite easy to purchase property in the metaverse. It’s significantly easier than buying land in real life! As with most things in crypto, the exact process will depend on the platform being used. Still, things generally look the same.
First, you will need to find out what currency the metaverse platform of your choosing uses. For Sandbox, $SAND is used to purchase land. For Decentraland, it’s $MANA. Once you have acquired enough tokens in your crypto wallet (something like Metamask), you can look for land. Most of the time, the platform has a marketplace you can locate on their website. On Sandbox, for example, the Market tab has an option to look specifically for LAND.
To purchase, simply select the parcel you would like and confirm the transaction. If the purchase is from another person, the translation usually takes place on an NFT marketplace like Opensea or Tofu. Once purchased, the land is forever tied to your digital address associated with the wallet you purchased it on (Metamask, Trust, etc.).
What are the Most Common Metaverse Platforms with Available Real Estate?
There are new metaverse platforms each day, all with their way of doing things. Still, some big players in the game have the highest likelihood of continuing development as they are now. Here is a list of the most common metaverse platforms to purchase real estate on (or likely will be able to in the future):
- The Sandbox
- Axie Infinity
- Roblox (potentially)
- Horizon Worlds (potentially)