Metaverse Virtual Real Estate is Booming: What’s the Appeal?

Metaverse Virtual Real Estate is Booming: What’s the Appeal?

BlackSalmon / Getty Images/iStockphoto Metaverse virtual real estate is the new big winner in the crypto world, as leading virtual worlds recorded more than $100 million in NFT land sales in the past week, according to DappRadar data.

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The Sandbox – one such virtual world – is leading the pack with both the highest number of traders and sales. The Sandbox also boasted the highest trading volume last week, taking in more than $86 million, while Decentraland followed in second place with more than $15 million traded for land plot NFTs.

But what’s the increasing appeal of buying a plot of virtual land?

Hayden Hughes, CEO of crypto social trading platform Alpha Impact, told GOBankingRates that NFTs and play-to-earn games – such as Axie Infinity from Vietnamese developers Sky Mavis – have brought an entire generation of people into shared online communities. Hughes expressed that, as these communities grow, participants have a creative desire to express themselves by owning items in the metaverse: in this case, owning land.

“The rush to acquire land in the metaverse is driven by creatives who truly want to express themselves, and speculators who want to cash in. Unlike the ICO [initial coin offering] bubble in 2017, the metaverse has actual adoption and a thriving (albeit early) ecosystem. Facebook / Meta is not the leader in this space and the rebrand has also brought attention on the ecosystem,” Hughes said.

DappRadar notes that it’s not only the appetite for metaverse experiences that’s increasing, but also the price for metaverse land. Last week, five of the 10 most expensive NFT sales concerned metaverse land plot NFTs in different virtual worlds.

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The top grosser was the Fashion Street Estate in Decentraland, which switched owners for 618.000 MANA, or $2.42 million, per the data. However, last month, an Axie Genesis plot – the scarcest land in yet another stand-alone metaverse game – sold for 550 Ethereum (ETH). This transaction represented “the largest sale ever for a single plot of digital land,” according to a tweet from the developers, with 550 ETH being equivalent to $2.48 million as of Dec. 3. Axie Infinity, Denctraland, and Metaverse Gaming

According to Axie Infinity whitepaper, “Lunacia, the Axie homeland, is divided into tokenized plots of land which act as homes and bases of operation for their Axies. Plots can be upgraded over time using a variety of resources and crafting ingredients that can be found when playing the game.”

Lunacia consists of 90,601 plots of Land, which are represented as NFTs and can be freely traded by players, according to the developer whitepaper. The Genesis property in question is particularly valuable because of its scarcity: there are only 220 Genesis plots within the game’s 90,601 plots.

A recent report from Grayscale Investments explains this evolution of the “creator economy,” known as “play-to-earn,” which allows users to own their digital assets as NFTs, trade them with others in the game, and sometimes carry them to other digital experiences. As such, projects like Decentraland are creating an open-world metaverse wherein users can log in to play games, earn MANA (the native token of Decentraland, with which users can purchase NFTs, including LAND or collectibles), vote on economy governance, or create NFTs. The presumed benefit of this framework is that it gives users substantial interoperability between systems as a value proposition for their time spent in-game.

Matt Maximo, research analyst at Grayscale Investments and co-author of the report, told GOBankingRates that land in the metaverse is a really interesting concept because traditional real-estate is valued largely due to proximity to shops, services, and other people – you’re bound by the time it takes to travel from your home.

Many metaverses like Decentraland, however, allow players to teleport around the world, making travel instantaneous and irrelevant to valuation. However, given that this market is extremely new, a lot of the higher priced sales have come from LAND parcels with good locations – ie. proximity to major attractions in the metaverse.

“Investing in LAND is exciting but comes with the risks of any emerging market. LAND and MANA holders are incentivized to prevent expanding the Decentraland map and keeping the number of parcels low, however, there will also be a point where expanding […]

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