Decentraland, which launched in February 2020 and advertised itself as the first fully decentralized virtual environment, is built on the Ethereum blockchain. Decentraland is decentralized implies that the people who use it own and manage it. MANA, Decentraland’s native money, is used to make transactions in this realm, and NFTs are used to verify the evidence of ownership of virtual property. The coin’s value had begun to rise in 2021, but it skyrocketed after Metaverse’s announcement.

The concept of investing hundreds or even millions of dollars on imaginary “land” in a virtual environment seems ridiculous. However, the world has recently witnessed significant investments in virtual land within the Metaverse. For example, A plot of land in Decentraland was purchased for US$2.43 million by the Metaverse Group, a real estate business focusing on the metaverse economy.

What drives the value of the Metaverse Land?

The buzz in the Metaverse has paved the way for the emergence of a new economy centered on the marketing and trade of digital goods. Events like metaverse concerts and NFT ownerships sparked interest and excitement among investors, speculators, and consumers even before Facebook announced its rebranding to Meta and accepted the new technology. Without a question, Facebook was pivotal in hastening the acceptance of the Metaverse. But, on the other hand, industry specialists had already grasped the essence of the business and were making preparations appropriately.

The growth of NFTs at the same time only made it simpler for investors to trust in projects that have a large consumer use case. As a result, the sector is now worth billions of dollars, and analysts predict that by the end of 2025, it may be valued at as much as $82 billion.

Because digital lands are traded as non-fungible tokens (NFTs), they are intentionally limited. The only token with actual worth is the original, and its scarcity makes it more valuable and increases its value over time. As a result, metals like natural lands become valuable assets, and individuals can profit from them by selling, leasing, or constructing on them.

Digital or Metaverse lands, like real lands, are limited resources. One of the factors that influence the price is their scarcity. Another factor is the location. Premium metaverse sites are more valuable, just as they are in the real world. Posh districts, opulent penthouses, and pricey villas are all elements that make up the virtual world.

Early purchases of premium location lands are likely to increase profits, especially when picking a site to develop successful enterprises and valued activities. Likewise, it’s reasonable to expect landowners to profit handsomely if an area becomes densely filled with high-end brands.

Purchasing land in the virtual world is not a new concept. For years, gamers have acquired virtual properties and constructed structures on them.

On the other hand, these early virtual worlds were highly centralized and frequently administered by a single firm, with all lands and material belonging to the servers of these companies. As a result, gamers just accepted these materials as a part of the game. They never considered them worthwhile investments since the major corporation may go out of business or alter rules and laws at any time.

There is no central authority imposing any restrictions or boundaries in a decentralized metaverse established on a blockchain. On the other hand, landowners are free to do anything they wish with their lands. No one, not developers or governments, can take away their decisions or the material they post to the platform. This feature is quite beneficial for investors who want to feel more involved in the entire business and growth process.

Why Decentraland Metaverse is a good investment

It might feel like leaping over a cliff into emptiness when it comes to buying metaverse real estate. There is no actual land, sea, sky, molten core, or gravity to keep everything together. Nonetheless, it’s something that people are beginning to believe has worth. You know, that’s all it takes. The only reason people value anything is that it’s crucial to their survival. Here are some reasons why Decentraland Metaverse is a good investment:

Decentraland was established in 2017, and it was accessible to the general public in early 2020. Non-Fungible.com states that 133,878 NFT real estate transactions totalling $164.8 million had been completed in the virtual world as of Jan. 19, 2022. This excludes transactions made through the platform’s marketplace or through less transparent third-party sales platforms, of which there is a number. Bloomberg reported on virtual land sales in Decentraland’s commercial districts as early as 2018. Ripio.com, a credit network, spent $150,000 for a plot back then, and it wasn’t even the year’s highest sale. MANA, Decentraland’s cryptocurrency, was valued at around 12 cents per coin at the time. A MANA coin is worth $2.21 as of Jan. 21, 2022, despite a terrible week for the markets as a whole.
Every metaverse platform indeed has some users who want to see it succeed. Decentraland’s members, on the other hand, are involved in its success, so much so that its events page is chock-full of open-to-the-public activities ranging from art gallery openings to musical performances and even charity events. In addition, casino and game evenings put on by various organizations may bring large numbers, while meditation courses can help everyone relax. Not to mention group therapy sessions, pet displays, and special interest gatherings. A lot is going on in Decentraland that is critical to its future. Because this isn’t “just a game,” but rather a community of actual individuals with genuine passions who are shaping the future of their platform, they must be emotionally involved in it. Public events can also introduce new visitors to Decentraland’s culture and introduce them to people who spend time on the platform daily. As a result, people lose interest in online platforms, not because they’re bad concepts. On the contrary, Decentraland’s inhabitants and leadership are continually upping the standards for the platform and enticing visitors with fresh and exciting ideas.
Big Brands are already planting their flags in the Metaverse: Multinational corporations are like bugs. If you spot one, there’s a strong probability there are several more hidden behind closed doors. And this is becoming increasingly true, with new businesses staking their claims in Decentraland on a near-daily basis. Although some have predicted that bringing huge businesses into the Metaverse will bring it to an end, the fact is that corporate engagement is how it will endure. Failure to launch is quite likely without someone putting up money for initiatives that no tiny firm (or community group) can pay on its own. Instead, these prominent actors have a strong interest in Decentraland’s success, and they’ll be promoting it and raising awareness in the Metaverse.

Risks in buying Land in Decentralized Metaverse

Metaverse features remain a specialized interest with a small market:
This may be the most crucial item to remember when dealing with metaverse real estate. It’s unquestionably a niche market, but one with a fervent following. Like developers who only construct mega-mansions, you also must accept that your market is tiny and likely to remain so. There’s nothing wrong with it, but it should reflect your investing approach.

If a metaverse platform fails, so does your investment:
No one, in their right minds, wants to think about their investment failing. Still, there’s always a risk when investing in anything, so let’s address the elephant in the room: the risk with metaverse real estate is significant, and even worse, if a metaverse platform falls, your investment is lost forever. Unlike real-world real estate, where you can always rely on the fact that you still own a piece of ground you can touch and step on, a metaverse property might vanish entirely if the platform goes bankrupt.

Members may have voting rights when closure is a possibility, but if there isn’t enough money to keep the platform going, the person who pays the bills has no choice but to shut it down.

The Metaverse isn’t exactly beneficial to the real world:
While roaming about in the Metaverse, it’s easy to forget that it’s electricity- and computer-intensive imitation of the real world. Although metaverse platforms are attempting to become more environmentally friendly through tighter, more innovative programming, the coins that fuel them aren’t making the same effort.

The Metaverse Land

The Metaverse, like real estate, is all about three things: location, location, location. When you initially enter the Metaverse, there are regions where people congregate, and such areas would be far more valuable than areas where no events are taking place. Those frequently visited regions, to be valid, attract big spenders. Snoop Dogg, for example, is constructing a virtual home on a parcel of land in Sandbox, and an undisclosed person recently paid $450,000 to be his neighbor.

While there are lots of individuals buying items in the Metaverse out of fear of missing out, as well as large corporations that may not completely get what they’re getting into but are aware that other brands are, there are also plenty of very astute, brilliant people entering this sector. As a result, the potential for metaverse real estate to flourish is huge. It is especially true when more businesses join the market and strive hard to create experiences that are just not possible in the real world owing to limitations, such as physics or, more likely, an ongoing epidemic that shows no signs of abating.

Decentraland has its vibrant economy, culture, and stories, which are essential components of any civilization. Sure, it doesn’t seem like what people are used to, but it’s a world within a computer that’s growing from nothing to something that everyone can access from anywhere on the earth.

References

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Natasha D., (Jan. 22, 2022). The frantic Metaverse land grab is likely to persist in 2022 as investors realize virtual real estate equals cash, predictive analytics firm says

Retrieved from: https://markets.businessinsider.com/news/currencies/metaverse-real-estate-sales-2022-outlook-web3-decentraland-sandbox-cryto-2022-1

Theo T., (Jan. 6, 2022). Real estate in the Metaverse is booming. Is it really such a crazy idea?

Retrieved from: https://theconversation.com/real-estate-in-the-metaverse-is-booming-is-it-really-such-a-crazy-idea-174021

Chris D., (Jan. 12, 2022). Investors are paying millions for virtual land in the MetaverseRetrieved from: https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html