What is Digital Land Really Worth?

Welcome to the virtual land rush, in which investors, companies, and presumably extremely wealthy individuals are vying for virtual real estate in the Metaverse. In 2021, the virtual land market in the “main four” metaverses – Decentraland, Somnium Space, Cryptovoxels, and Sandbox – exceeded €440 million, with that amount expected to quadruple in 2022. Last December, the Sandbox metaverse set a new land sale record, selling a parcel of land for €3.8 million in a single transaction.

Some individuals may find it difficult to comprehend the idea that digital and pixelated tracts of property are being sold for more than 2 million dollars. Yes, on the burgeoning idea of the Metaverse, non-physical land is being sold for the same price as equally valuable real residences. I’m not sure how that’s even feasible. Why would somebody pay money for a digital pixel that appears to have no monetary value? Is it worthwhile to invest in digital real estate?

According to proponents of the Metaverse, the virtual land’s value proposition competes with that of the actual world. Adidas is one of several companies that has created virtual land for customers and gamers to purchase, sell, trade, and even construct. Decentralized apps Decentraland, The Sandbox, and CyrptoVoxels have the most popular virtual land. Investing in digital land is progressively becoming equivalent to owning a house for investors with a long-term vision for the recent growth of the Metaverse and the migration to Web 3.0. Many individuals believe that the value of virtual land will continue to rise.

Multiple digital domains make up the Metaverse. Each resembles a three-dimensional virtual metropolis where avatars live, work, and play. Anyone who has played famous video games like Fortnite, Animal Crossing, or the Roblox universe has seen what these worlds are like. Virtual reality, streaming video, mobile gaming, avatars, and artificial intelligence are all used to create immersive digital experiences in each.

However, metaverse real estate investing remains very speculative, and no one can say if this boom is the next great thing or the next big bubble. In a few years, technologists anticipate the Metaverse will mature into a fully functional economy, providing a synchronous digital experience as integrated into our lives as email and social networking are now.

The blockchain — a digitally distributed public database that removes the need for a third party, such as a bank — powers banking in these virtual worlds, and bitcoin is the money of choice. Anyone entering a virtual environment may buy or exchange nonfungible tokens, or NFTs, which are blockchain-based assets that are digital representations of real-world goods, including art, music, and even homes. The NFT is a unique legal document that acts as evidence of ownership.

In recent months, the amount of commercial real estate transactions in the Metaverse has increased.

What is the aim of Digital land?

Virtual parcels of land appear dreary and unpleasant on screen. On the other hand, digital plots of land aren’t as restricting as real-life consequences of homeownership, contrary to what you may think while looking for a home. Although buying digital land isn’t as time-consuming as buying real estate, the advantages of owning digital land are extremely comparable. Owners may be able to generate a passive income stream. The plots of property in the game’s virtual environment, Lunacia, are rumoured to offer owners virtual items in the blockchain play-to-earn game Axie Infinity. It is possible to harvest or make virtual commodities. Premium tier land plots in Lunacia are expected to have a value much greater than the purchase price, similar to how location affects property value in the real world.

A portion of the most valuable land was sold for 550 ETH. It was valued at $2.5 million at the time. Tokens.com, a blockchain technology business focused on NFTs and metaverse real estate, paid $1.7 million in October 2021 for a 50% stake in Metaverse Group, one of the world’s first virtual real estate companies. The Metaverse Group is headquartered in Toronto, but its virtual offices are in Decentraland, a realm in Crypto Valley, the Metaverse’s Silicon Valley. There are further districts for gaming, retail, fashion, and the arts in Decentraland.

Tokens.com has broken digital ground on a skyscraper in Decentraland after that acquisition. Luxury labels such as Louis Vuitton, Gucci, Burberry, and others have already joined the Metaverse via NFTs, giving firm officials hope that the Tokens.com tower would soon produce money from leasing and advertising for these companies.

Is there any money to be made in digital land?

In blockchain games like Axie Infinity, digital land gives up opportunities for in-game mechanics like harvesting and developing materials to create monetary value. Crypto natives are looking into digital land as a feasible and lucrative long-term investment since these plots of digital land allow gamers to acquire and harvest resources in return for prospective monetary worth or earn passively just by holding it.

Digital land, like physical land, is an asset in this sense. The infrastructure of digital land is what makes it more appealing. Because digital land plots in The Sandbox and Decentraland run on the Ethereum blockchain, a decentralized network, users don’t face the same restrictions as they would in the actual world because there are no middlemen to hold up future growth.

The Metaverse Group has established a real estate investment trust with aspirations to develop a portfolio of assets in Decentraland and other worlds such as Somnium Space, Sandbox, and Upland. Although the internet is unlimited, virtual real estate is not – Decentraland, for example, comprises 90,000 pieces of land, each measuring around 50 feet by 50 feet.

Many of these digital places resemble cartoonish, gummy-coloured dream worlds, while others are digital extensions of our earth. SuperWorld is a virtual real estate marketplace that spans the whole planet, with 64.8 billion plots of land available for purchase as NFTs. The Taj Mahal, as well as your childhood home, are also accessible. Owners can purchase plots for emotional or commercial purposes, but in any case, once they purchase the NFT, they are entitled to a portion of any trade that occurs on that piece of land.

And as the Metaverse seeps more into our universe’s everyday consciousness, the omniverse emerges as a new domain where the boundaries between them blur.

The actual and online worlds collide to form a hybrid environment in which the fungible and nonfungible collide at various locations, allowing tangible things to be sold as NFTs in the Metaverse. The commerce that will propel this revolution will be housed in metaverse real estate.

Is it worthwhile to invest in digital land?

When you acquire real estate, you spend time and money making sure the proper permits, contractors, and neighbors are happy. The constraints that exist in the digital world, on the other hand, are mostly ones that you impose on yourself. For The Sandbox and Decentraland, the average price of digital land is now at $13,000 for an empty plot with limitless opportunities to collect wealth.

It’s expected that as the construction and excitement continue, the amount of land accessible will grow. The native tokens evolve in tandem with the lands. SAND, The Sandbox’s native coin, has risen in value from its low point of $0.03 at the start of 2021. According to DappRadar, SAND is now selling for approximately $7.

Only a few digital marketplaces exist where investors may buy and sell real estate, and they all utilize their currencies. For example, Decentraland’s is known as MANA. People may also explore NFTs, including land plots for sale, on Decentraland’s marketplace.

Wave, a business that produces interactive concerts such as Justin Bieber’s virtual concert, makes money through virtual products and corporate sponsorships for the events hosted in neutral zones rather than a digital stadium. Fans across the world tuned in to see Justin Bieber’s avatar perform songs from his blockbuster album “Justice.” Investors also kept an eye on things. Although the firm has not yet monetized real estate, Adam Arrigo, a co-founder and CEO, said he is looking into the possibility.