In recent weeks, virtual property sales have made headlines, with a piece in the virtual world Decentraland smashing all sales records and selling for a stunning $2.43 million. Only to be beaten by a $4.3 million transaction a few days later. The million-dollar storyline is part of Sandbox, a blockchain-based game that has attracted celebrities such as Snoop Dogg and Steve Aoki.
As bizarre as these million-dollar land auctions may appear to those unfamiliar with the crypto-world, proponents believe metaverse property is the next big thing, and early buyers will enjoy the most significant benefits. Furthermore, clever professional investment firms frequently purchase the most costly plots. Continue reading to learn more about the possibilities they perceive – hint: it’s more than just conjecture or bragging rights!
Most of you must be aware that purchasing and renting Land in Decentraland is an investment. If you are a newcomer, you should consider purchasing Land in Decentraland! Why? Because it will enable you to make more money! Yes, you may earn money by buying Land and renting or leasing it to other Decentraland users, selling it, or even constructing a structure on it. However, if you find land parcels too costly and want to enjoy the beauty of Decentraland, it is preferable to rent rather than own.
Virtual Land is a fundamental component of The Metaverse, A next-generation internet in which actual and virtual worlds meet, complete with hyper-realistic VR experiences and its economy. Sandbox, Decentraland, and Cryptovoxels are examples of virtual worlds and games that allow players to own Land in their environment.
What makes Virtual Land valuable?
There are several reasons people could own virtual Land, and governments are becoming increasingly interested. We’ll look at some of the most popular reasons why someone may consider purchasing virtual property, as well as the various ways in which landowners might profit from their digital assets.
- Renting Land and Creating Valuable Experiences: Since you now own the Land, you may either use it to gain experience or rent it out to others to do so. For example, you may rent out space to businesses to merely display their products or hold branded events such as fashion shows. Brands are increasingly purchasing property on their own. You may also rent your Land to game developers to use. Some of these games may be pretty profitable for the producers – Decentraland, for example, hosts several virtual casinos – so there is an incentive for them to pay to secure a space.
- Demand Increases Despite Scarcity: Most designers in the metaverse restrict the supply of their Land, similar to how many cryptocurrencies have a maximum total supply (e.g., bitcoin) or maximum inflation rate (e.g., ethereum). So as more businesses come to the metaverse, developers build games, and artists conduct exclusive concerts or experiences, there is a logical assumption that the number of people desiring to consume the content will grow, and prices will climb as a result. According to Decentraland’s creator, users have increased by tenfold in the last few months.
- Speculation: As previously said, metaverse land is more than just speculation, but it doesn’t imply conjecture isn’t a factor in people’s purchasing decisions. Despite the current excitement surrounding virtual land purchasers, many transactions are still made based on guesswork, which the figures cannot fully explain. For example, Decentraland’s currency MANA has increased by more than 3,000 percent in 2021 and currently has a market worth of more than USD 5 billion. In addition, Decentraland’s co-founder stated in December that the platform had over 300,000 monthly active users, which is a significant amount for a nascent platform; nonetheless, non-crypto gaming applications would require many more active users to obtain a similar price. For perspective, Fortnite is presently valued at $29 billion and has 80 million monthly users. In other words, each of Fortnite’s monthly active users has a market valuation of slightly under $400, compared to approximately $17,000 for each of Decentraland’s monthly active users.
- Status & Utility: Most individuals purchase a property to live in and enjoy in the real world. Similarly, many purchases in the metaverse and games like Fortnite happen simply because the consumer wants to enjoy the item. Whether it’s having extra powers in the game, boosting their rank, or obtaining access to unique events, there’s something for everyone. For example, Fortnite produced almost $9 billion in sales in 2018 and 2019! This is due to the fact that players may purchase extra features, skins, clothes, and accessories in-game. Additionally, Snoop Dogg has revealed that he will organize private virtual events and allow users to have him perform on their property.
The more experiences that are built on top of these virtual worlds, the more appealing it should become for new users to join, which will inevitably lead to an increase in the price of both the Land itself and the tokens used to purchase it – most virtual worlds use their cryptocurrency, and the value of which can fluctuate. The majority of the metaverse’s environment is still being constructed today, which may be likened to the “real” world, where the value of a property in a freshly established neighborhood would only increase as the community grows around it. It will be packed with cultural hotspots, boutiques, and cafés in three years and will be the area where everyone wants to hang out.
Virtual Land purchasing risks
Virtual Land has a variety of concerns because it is a developing field. When it comes to virtual Land, there are a few unique dangers to be aware of:
- It’s too soon to tell which initiatives will win: Even if virtual Land as a notion or asset class soars to new heights, it remains to be seen who will emerge victoriously. Perhaps a new game with more exciting features or experiences will be released, and people will rush to the new platform, abandoning Axie Infinity, Sandbox, or Decentraland. Remember that while Sandbox was first released in 2012, the blockchain game is a departure from the original and will only be released in beta in November 2021.
- There is no genuine user interest: Some doubters believe virtual Land is just a fad among crypto-speculators. There will be insufficient actual user interest and customers willing to spend money on the virtual world’s goods and experiences in the end. For example, the inventor of Second Life, Philip Rosedale – the forerunner of everything we’re witnessing now – was an early proponent of the metaverse, declaring in 2007 that the 3D web will be dominant and that we’d all have our avatars.
Being a Landlord in the Decentraland Metaverse
There are several advantages to being a landlord in the Metaverse right now, whether solo or a stakeholder in a bigger corporation. Three of these are shown below:
- You can make money as your virtual Land grows in value: Decentraland has been around much more than other platforms like the Sandbox. Data about Decentraland sales from NonFungible.com dates back to 2017, when the native Decentraland currency, MANA (CRYPTO: MANA), was worth pennies on today’s dollar.
- Commercial renters are more readily available than you would think: Landowners in Decentraland frequently rent out their lots and finished properties, generating revenue from a piece of virtual real estate that they may have owned in the distant past. They primarily rent to people, but the beauty of the current metaverse is that many commercial players are also becoming involved. For example, you could build virtual malls, workplaces, or virtual event spaces and rent them out instead of renting virtual houses and flats. Suddenly, you’re a real-world business landlord with real-world commercial endeavors that you can touch. Brands are making a massive push into the metaverse, and they’ll need a lot of room to convey their messages to everyone who happens to be nearby.
- When compared to the actual world, input costs are modest: Even if you hired a virtual structural designer to assist you in building a Metaverse property, the input cost is insignificant compared to the price of real estate in the actual world. This is because there are no property inspections; there are no restrictions on what you can and cannot build (gravity isn’t even an issue, which is interesting); and there are no restrictions on who may inhabit what and for how long. You’ll pay a little more, but you’ll have no actual building supplies to deal with, no waste, and no supply chain issues to worry about. Pixels and electrons are used to construct everything. Even if there is a resin scarcity and the color blue is out of supply till further notice, those can be tweaked as needed.
The metaverse is an exciting new chapter in the internet’s history, where our physical and virtual lives will blend more than ever before; virtual Land will be a vital component of these new virtual worlds. Twenty years ago, a Fifth Avenue storefront was the holy grail; now, a first-page Google or Amazon ranking may bring in millions of dollars; and tomorrow, a premium piece of virtual real estate in the appropriate virtual environment could be the equivalent. However, because this is a new field, there are huge dangers, and we’re still early in the adoption curve; it’s still a gamble as to which platforms will emerge as the final victors and what people actually desire.
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