How Real Estate Markets Work In The Metaverse
Until very recently (a couple of years if not months) the word real estate was linked to houses, land, and industrial buildings, made of bricks and concrete. Today, it seems to be a science fiction film, where we talk about plots of land that don’t actually exist. They are only graphs, but they are so tempting to many investors.
We are talking about the real estate market in the Metaverse, a reality that today generates very high profits. These are virtual lots in the most famous 3D worlds such as Second Life, Minecraft, 2D web pages, and immersive applications for augmented reality. These areas have become new lands to be conquered with exponentially growing investments.
Its main players are real estate developers, who buy virtual lots and transform them into buildings, cities and infrastructures. Once the renovation has been completed, the land is put up for sale at much higher prices than its original value.
The real estate market in the Metaverse is an interesting opportunity even for simple users, maybe like you. As it offers potentially large profits over short periods of time.
Like all things, it has several facets to consider before making an investment.
That’s why it’s important to gain knowledge and a good understanding of how the real estate market works in the Metaverse before making any moves. This way will you be able to make the most of the profits from your online investments.
By consciously investing in the virtual real estate market, you can have great financial satisfaction without ever leaving your home!
THE EXPLOSION OF THE REAL ESTATE MARKET IN THE METAVERSE
The year that probably marked the advent of this business is 2021.
– Sales in the virtual world have reached 500 million dollars (about 475 million euros), as reported by CNBC with data from MetaMetrics Solution.
– A report from BrandEssence Market Research projects that the Metaverse real estate market will grow at an annual rate of 31% between 2022 and 2028.
Numbers that have never been seen before except in cryptocurrencies. For example Bitcoin: even if its price has now dropped a lot (and according to many analysts it will grow again) it has made an incredible acheivement.
The Metaverse and cryptocurrencies are daughters of the same era and of the same current technology: a mix of digital and blockchain.
– The real estate business is mainly focused on four platforms: Decentraland, Sandbox, Cryptovoxels, and Somnium Space
– Currently, parcels of virtual land on Decentraland have a minimum price of 4.46 ether (about $12,500). While in The Sandbox, the virtual land is over $9,000.
THE MOST KNOWN AND IMPORTANT 3D WORLDS
Decentraland: It’s a blockchain-based 3D world with parcels of land that you can buy, explore, interact with and play with.
The Sandbox: is a platform that allows users to build and manage 3D content within the virtual space. The average price per lot exceeds $9,000.
Cryptovoxels offer property owners the possibility of creating pixel art-style objects, transforming them into real digital works of art.
Somnium Space is a 3D world that allows users to buy and sell land battles. The average price per lot varies between $1,000 and $2,000.
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One of the most interesting creations that have captured the attention of the community is Genesis City. It is an ambitious project created by Decentraland.
It is a large metropolis where there are restaurants, theatres, shopping centers, and museums. A real paradise for virtual real estate investors.
Decentraland is working with the US company Ridescale to create a rail transport system that will connect the main cities of the metropolis.
Genesis City has been compared to Washington DC due to its size:
It has 900,000 plots and some of them have been sold for more than $200,000 (about €190,000) in cryptocurrencies.
The Decentraland Foundation was born in 2015, and the project’s 2017 initial coin offering (ICO) raised approximately $26 million at the time. The Decentraland platform has attracted a lot of eyes to the lucrative and ever-growing digital real estate industry.
HOW DO BUYING AND SELLING WORK?
Basically, the buying and selling of land in the Metaverse work like any other real estate market.
It all starts with the purchase of a LAND by the user.
Once you have purchased the LAND, you have the right to use the licenses that will allow you to place 3D buildings, change their intended use, insert audio-visual content, or do anything else your business needs.
You can also rely on real estate agencies. For example, there is Metaverse Property. It was among the first to be born and helps you to search for the virtual space of your interest and then acts as an intermediary in the purchase.
– The agency offers plots on Decentraland, Sandbox, Somnium, Upland, and Cryptovoxels.
– It also offers leasing, property management, marketing, project development, and consultancy services, providing the investor with direct exposure to the real estate Metaverse by overcoming barriers to entry or ownership. Basically, it’s about securing ownership of virtual real estate through an NFT or token.
What are NFTs?
NFTs (not fungible tokens) are a category of tokens representing cryptographic-related digital assets such as digital art, video, music, and real estate. These are non-exchangeable coins that can only be exchanged for your specific currency. NFTs grant a buyer title to the asset in question. Security is provided by the Ethereum or ERC721 blockchain, as all ledgers are stored in the distributed ledger.
Simply put, buying and selling land in the Metaverse works just like any other real estate market.
To purchase a virtual property, you must first buy a certain number of NFTs (as a token) from the blockchain wallet to take ownership of your LAND. Once you’ve done that, you can start constructing buildings and content in this area and use it however you want. You can also decide to sell it, as long as there is someone willing to buy it.
Another real estate company that specializes in marketing virtual land in the metaverses is Metahood.
– It was considered one of the most promising projects of 2022 by “The Generalist.”
The virtual land has become a fixed point for those looking for new investment opportunities, and they do so by expanding their assets or reference markets.
For example, a virtual farm in Decentraland sold for over $2.4 million.
The transaction was carried out by Tokens.com through its subsidiary Metaverse Group, dedicated to the virtual real estate business.
In essence, the buying and selling of land in the metaverse work a bit like any other real estate market.
Buyers must first purchase tokens to secure a virtual property. Once you have chosen the LAND, you can start building buildings or audio-visual content, or use it according to your needs. You can also decide not to do anything with it and wait for its value to go up and then sell it as it is.
As in all important investments (i.e. expensive) as in this case, it is necessary to carefully evaluate where (i.e. which Metaverse), with what purpose the operation is carried out, and to do it at the right time.
So I invite you to study the subject well because it is new. New means that there are many opportunities but also high risks of making mistakes.
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