What drives the Sandbox Metaverse premium?
Similar to physical real estate, a piece of digital land NFT in a blockchain-based virtual world is an asset that can store value. Since Meta announced its foray into the Metaverse in October last year, demand for these virtual land NFTs has surged, and their prices have risen with it.
The Sandbox has become one of the leading Metaverse blockchain projects. It consists of 166,464 ERC-721 NFT parcels where creators can build profitable experiences like games, events or parties for visitors to use for free or for a fee.
With The Sandbox Game Maker, a free native build tool for sandboxes, artists and creators can easily build generated content.
While this approach can be seen in traditional games like Minecraft, here lands, avatars, and any other game assets are represented by NFTs, establishing digital asset ownership in that Metaverse.
In this virtual world, what factors influence the evaluation of prices? Is there land that is over or under priced? How does the Sandbox compare to other Metaverse projects in terms of funding, scarcity, and collaboration?
- Learn about the land inside the sandbox
- How to evaluate sandbox land?
- Comparison with other virtual lands
Learn about the land in the sandbox
Facebook’s announcement of its rebranding as Meta shows its great interest in the Metaverse. Since then, demand for virtual world projects, including sandboxes, has skyrocketed.
The floor price for sandbox land has risen from less than 1 ETH in Q3 2021 to 5 ETH in January, an all-time high. The current floor price brings the sandbox land’s floor value to $1.27 billion.
But what exactly is the land in the sandbox?
Land (LAND) is actually an NFT that acts as a digital real estate where creators can build actions of their own ideas. Each LAND has a predefined terrain that is 96 meters wide, 96 meters long and 128 meters high, and its owner can build and modify plots or rent them out to other players.
Land in the sandbox has other uses, including passive income generation through staking and governance voting rights.
Source: The Sandbox
In terms of NFT allocation, 10% of the total land supply (16,704 parcels) will remain in sandbox hands for special events and featured exclusive games. Another 16%, or 25,920 parcels of land, will be used as a reserve, distributed as rewards to partners, creators and gamers. The remaining 123,000 parcels (74%) are up for sale, of which 81% or 100,054 parcels are open for sale at the time of writing.
How to evaluate sandbox land?
Land valuation in the sandbox works on the same fundamentals as real estate in the real world, and its price depends on two main variables: location and size.
While other factors such as structural design or land function will ultimately affect prices, virtual worlds are still in their early stages, experiences are just beginning to be created, and the location and size of plots directly determine their prices.
We analyzed the sales of over 25,000 sandbox lands between August 2021 and March 16, 2022 to provide additional insights into the two variables above.
This analysis only considers 1×1 parcels, as larger parcels are mostly sold through auctions and the secondary market is not representative due to price constraints.
The world of The Sandbox （来源：The Sandbox）
Adjacent 1×1 plots can be grouped in a sandbox to form estates of different sizes.
The maximum size (XL) of adjacent land is 24×24 and includes 576 land. There are 35 XL lands in total, 13 of which are owned by the sandbox.
Land of this size covers more than 12% of the sandbox map and has notable holder names including Atari, Pranksy, Cyber Kongz, Binance, Ubisoft, Socios, TWD, Gemini, Coinmarketcap, Meta Key, Republic Realm, Warner Music Group and South China Morning Post.
The 12×12 estate contains 144 adjacent parcels and is owned by well-known brands such as Adidas, Snoop Dogg, CryptoKitties, Ultra, Smurfs, Care Bears and GuildFi have.
Lastly, medium and small parcels are the easiest parcels to acquire property and are open for sale.
In a recent Metavex auction, the winning bid for a medium-sized Metavex land was 215,000 SAND (~$630,000), while a small estate was auctioned for 45,000 SAND ($130,000).
Source: The Sandbox
While land size is intrinsically linked to price, its location plays a crucial role in the appraisal process.
The highest sales of any 1×1 LAND illustrate this premise.
Plot #151499, held by The Yacht’s King Domain, adjacent to a Medium BAYC plot and a large Dingaling plot called LooksRare, sold for 100 ETH. The price of the land exceeds the price of small secondary properties such as The Crypto Lifestyle, which sold for 71 ETH.
Source: The Sandbox
Well-known brands and individuals own multiple estates in this virtual world.
The purpose of buying these virtual parcels is to build games or social hubs etc. to attract crowds, high foot traffic around these key partners also increases foot traffic to adjacent parcels and thus increases their revenue.
A good example is the Snoopverse, a large estate owned by music legend Snoop Dogg.
The plot around this NFT is very popular as this large estate will offer exclusive experiences including games, concerts, and a collaboration section with adjacent Steve Aoki and SupDucks.
The five small estates sold as part of the second wave of the Snoopverse public sale were auctioned for an average of 78,200 SAND (~$230,000).
The same is true for major partners of Atari, CyberKongz, or parcels with sandboxes, which will play a key role in the monetization platform.
1×1 Land Average Selling Price Heatmap
The image above shows the associated hotspots for higher sales prices.
Overlaid on top of the sandbox map, you can see the better quality parcels such as the Snoopverse, the XL sandbox estate in the middle and southeast, the Meta Key area in the north central area (which also includes the land owned by Sandbox) and the CyberKongz and the map Northwestern Republic District.
The Sandbox marks those few parcels of land with traffic potential as “Premium Lands” – parcels near large or very large estates owned by major brand partners or by the Sandbox itself.
Premium land in a sandbox (Credit: The Sandbox)
Highlighting high-quality areas in the sandbox map shows that parcels around large recognized estates tend to be high-quality land.
However, superimposing the price heatmap on the sandbox premium map shows that it is the non-premium areas that have high value, and the areas marked as premium also have lower-than-average net selling prices.
Average sale price heatmap on top of 1×1 prime land
Areas such as the northeast corner have seen good sales, and the area around the CoinMarketCap XL estate is more sought-after than first thought. Likewise, the seven large sandbox parcels as well as Care Bears, Atari and Ultra West are among the more sought-after premium areas.
The center part of the map caught the attention of digital real estate investors.
The area around the XL Warner estate or the central XL Sandbox estate has been priced at high prices around 15-20 ETH.
The heatmap of the number of 1×1 LAND sales shows that the Midwest and Northwest of the map are areas with frequent land transactions. Likewise, the XL sandbox estate north of the Snoopverse has also been hot, and the CoinMarketCap XL estate and other sandbox lands in the northeast have been in demand.
1×1 Land Transaction Activity Heatmap
As the platform evolves into a more mature and profitable gaming virtual world, increased demand in these areas could push up prices for nearby plots.
All in all, while the size of the land is directly related to the price, location plays a crucial role at this early stage.
But as the game matures, other aspects that affect the pricing of sandbox land will also emerge, such as the specific utility of the land, the built-in design or type of experience, which will undoubtedly be more important in the later stage, but for now, the location remains the same. is the king of the sandbox.
Sandbox compared to other virtual lands
While lands have been analyzed across sizes and locations, other factors also affect the price of sandbox land as a platform, and comparisons to other virtual worlds can be used as a benchmark for sandbox land.
- Utility is one of the most important value propositions in the sandbox. In addition to the entire game and social experience, Sandbox has a full meta-economy that allows owners to rent out their properties. It also allows for governance voting to shape the future of the platform. Projects like Decentraland compete with these experiences, but they lack financial benefits, while others like NFT Worlds may have solid passive income mechanisms but lack a great sense of immersive experience.
- Financially, this money-making dapp also has a competitive advantage. The historical transaction volume of sandbox land has exceeded $530 million, second only to Decentraland. The Sandbox has been the leading virtual world platform through 2022, with over $98 million in trade volume and attracting over 6,800 unique traders, with nearly 6,000 traders in the WorldWide Webb virtual world alone this year name.
- Sandbox land floor prices have been pegged at around 3 ETH, which is lower than smaller virtual worlds like Decentraland or NFT Worlds, but almost double that of peer Metaverse projects like CryptoVoxels, Webbland or Treeverse. This floor price brings the market cap of sandbox land to $1.27 billion, which is 36% higher than Decentraland.
- Due to the limited supply, even more than 166,000 lands still cannot meet the demand, which adds a scarcity factor to the sandbox. Projects like CryptoVoxel have a lower supply, but it can add land at any time to expand its map.
- Partners have always been one of the most important factors in the development of the sandbox, with the full support of Animoca Brands, a well-known Web3 investment organization. Sandbox recently partnered with HSBC, which also makes HSBC the first bank to own land in this virtual world.
- With nearly 900,000 followers on Twitter and over 280,000 members on Discord, Sandbox has one of the largest communities in Web3.
Virtual land values have soared since Facebook changed its name to Meta and haven’t fallen back since. Digital real estate will not only be a place to socialize and enjoy, but also to generate some passive income from virtual land, which is why virtual land is seen as an investment opportunity by the masses.
Sandbox Land empowers creators with dapps that make money from games, and has a group of well-known partners to jointly build the future of this head platform.
While land size itself affects land prices, location plays a more critical role in pricing. It turns out that a well-located 1×1 lot can command a higher sales price than some 3×3 lots.
In addition, geospatial models increase the importance of adjacent land. “Neighbors” like Snoop Dogg can themselves have an economic impact in terms of traffic, gameplay and visibility of the game, so classify them as “premium” assets.
Still, it’s still very early days and we need to revisit the value of sandbox land in the future, but for now, this report can be considered a guide to identifying potential opportunities for sandboxes in virtual worlds.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-to-value-the-sandbox-metaverse-land-that-adidas-hsbc-etc-settled-in/
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