Metaverse real estate goes down, will Boring Ape’s Otherside cool?

30,000 to 50,000 people around the world hold Metaverse real estate, what do they use it for?

Now the situation of traditional real estate is not very good, and no one is talking about investment real estate anymore.But on the other hand, Metaverse real estate is on the rise, and it is not surprising that a piece of land can be sold online for tens of thousands or hundreds of thousands. At the end of last year, the Metaverse platform sandbox sold a plot of land for $4.3 million.

In May of this year, otherside, the Metaverse platform of the Boring Ape Project Group, released land. From May 1st to May 31st, the transaction volume of otherside was nearly 750 million US dollars, which exceeded the total land transaction volume of the seven leading Metaverse platforms such as Decentraland, Sandbox, and Cryptovoxel in history. The unit price of Otherside has risen to $13,000, making it the most expensive Metaverse real estate. At this time, Otherside is still zero, nothing.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

Metaverse platform’s land transaction ranking source: metacat

Otherside reflects the craze for Metaverse properties, especially star projects. So, what is the value of Metaverse real estate? Who are playing? What is the current state of the industry? What are the chances? On May 30th, I invited CK, the founder of the Metaverse data analysis and content navigation platform MetaCat, to the live broadcast room of Tech Capital. The following is the content of our conversation.

Fundamentals of Metaverse Properties

Lu Aifang: What exactly is Metaverse Real Estate? What is the value of a piece of land online?

CK: MetaCat currently includes 8 major Metaverse platforms in the Ethereum ecosystem, including Decentraland, Sandbox, Cryptovoxels, and Otherside, which just started selling land in May.

These Metaverse platforms are roughly divided into two types: one is similar to Minecraft, which is open-ended and somewhat like a sandbox game. The other is Sandbox, which is very game-oriented.

We found that the early head Metaverse platforms were doing one thing, that is, copying the earth and copying things in the physical world. Of course, it may not be a complete copy, and there will be some adjustments. So it’s the same as the physical world, there are islands, there are cities, there is land, and then houses are built.

Just like the physical world, land has locations and sizes. For example, a piece of land in Sandbox is more than 9,000 square meters, which is enough to build a game. Each piece of land in Decentraland is 256 square meters, and each piece of land in Cryptovoxel is different in size.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

map of cryptovoxel

Otherside recently sold land, starting from May 1 this year. So far, the cumulative transaction volume of virtual land has exceeded the cumulative transaction volume of the other 7 platforms monitored by the platform.

Is this a good phenomenon? On the one hand, it shows that the public’s attention to the Metaverse project is indeed very high. But on the other hand, Otherside is still very early in terms of the Metaverse project.

This leads to a very important question, what are we buying when we buy the land of the Metaverse? The land in the Metaverse should be the same as the land in the physical world. We know where its location is, buy it, and then build a house, do a business, or build a museum. The land has its practicality.

Of course, when every new technology first appears, there will be bubbles, and it cannot be said that bubbles are bad, but we must be alert to bubbles becoming bigger, because it will do great harm to the development of the real Metaverse.

Lu Aifang: Who is buying Metaverse Real Estate? What are they buying for?

CK: Most of the people who buy Metaverse real estate are from the cryptocurrency circle. There are only 30,000-50,000 wallet addresses that hold Metaverse real estate in the world. To be honest, at this stage, it is not so easy to understand the wallet and then use it to buy a piece of land, even for those who are skilled in using Internet products.

A large number of people buy Metaverse real estate for use. Since the year before last, due to the epidemic, encryption art has developed rapidly, and a lot of audio and video content has appeared, which needs a 3D space to display. Everyone found that the Metaverse platform provides such a space, and 3D and virtual avatars can enter. So some people buy them to build encrypted galleries, hold art exhibitions, and even sell encrypted artworks. So on the Metaverse platform, the most numerous venues are crypto galleries.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

Crypto Gallery on cryptovoxel

There are also some companies in the encryption circle that buy Metaverse land to build virtual headquarters for brand promotion. There are also some traditional companies that use it to build virtual headquarters, such as a brand like Real Vision, which built a venue, which is almost a 1-to-1 simulation, very close to the physical world.

Of course, some institutions use Metaverse real estate as a strategy for asset allocation, and some people just buy and sell it as an ordinary NFT.

Overall, the Metaverse construction rate is not high. According to our statistics, the platform with the highest construction rate is Cryptovoxels, with a construction rate of about 63% as of March this year.

Lu Aifang: What is the current overall market situation of Metaverse Real Estate?

CK: Facebook changed its name to Meta in October last year, and the Metaverse land price also started to rise. In the two months of November and December last year, we observed a sharp increase in the search volume of the Metaverse on Google and Baidu, and at the same time, the transactions of the Metaverse real estate on the chain also increased sharply.This upward momentum continued until January of this year and began to weaken. Now both the search volume and the transaction volume of the Metaverse real estate are in a downward trend, especially the recent collapse of the cryptocurrency market.

The initial land prices of these Metaverse platforms were all cheap, but now a piece of land in Decentraland costs more than $6,000, Sandbox costs more than $3,000, Cryptovoxel costs more than $2,000, and Otherside is ridiculously expensive, up to $13,000.

In fact, real estate is a category with relatively poor liquidity among NFTs. The number of wallet addresses of virtual land holders is between 30,000 and 50,000, and some of them are long-termists who buy land to explore various possible businesses. model, there are not so many new buyers, so the overall liquidity is not that good.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

Source of land transaction amount of each Metaverse platform: metacat

Lu Aifang: What are the differences between these Metaverse platforms, from platform positioning to user attributes? Can you see which platform has the potential to appreciate?

CK: First of all, I want to talk about the difference between Metaverse platforms and games. The game has a fixed goal. We play the game to fight monsters and upgrade, and then finally get something. But the Metaverse will not set levels like games. It has no restrictions. It may be a piece of land that everyone is willing to build. This is the foundation of all Metaverse platforms. Based on this, when each platform is built, the positioning is different.

For example, Sanbox is very game-oriented. Its land is 9,000 square meters, which is enough to build a game. The length, width and height of each piece of Cryptovoxels are different. It may be located on different islands, some by the sea and some not by the sea. From the map shape, it may be more like the physical world. On Cryptovoxels, neighbors and you may build completely different houses because of completely different ideas. Of course, there are also criticisms by architects that it has no so-called urban planning at all.

And Decentraland can clearly see that the project party has plans. For example, it has planned nine squares, such as Fashion Street, Las Vegas, and Dragon City. In the Crypto Valley area, many crypto companies are building their headquarters. Every piece of it is the same size, 256 square meters and 20 meters high. Buyers can combine multiple adjacent parcels to build a larger estate. For architects, there can be plans, you can buy multiple adjacent parcels of land and use them to build a block.

Lu Aifang: Why is the land in the virtual world still high?

CK: Yes, height is actually one of the elements of virtual land scarcity. All games are built based on the attribute of scarcity. Because of scarcity, not everyone can afford a very expensive item, and you have a sense of superiority when you use it.The same is true for height. In the case of a limited height, some designers will play their creativity well and still make a wonderful work within such a limit.

Lu Aifang: The real estate in the Metaverse is the same as the real estate. Does it depend on the location? For example, if you live next to a star, will there be more room for appreciation?

CK: Indeed, some project parties refer to the value logic of land in the physical world when constructing the value logic of virtual land. The so-called central area is close to the area with more traffic, or close to some brands with more own traffic, there will be overflow of traffic. This is how Decentraland and Sandbox build their value logic.

But on the other hand, in the Metaverse, many attributes of the physical world have been eliminated, for example, gravity is gone, resource constraints are gone, and defensive functions such as walls and roofs of buildings are no longer needed, and there is no concept of distance. , because any two points pass through a portal or jump through a link. We can build a new set of value logic without following the rules of the physical world. Now there are two situations at the same time.

Lu Aifang: Do the people involved in the construction have the ability to change some rules?

CK: Builders certainly have the ability to influence the rules, and when your influence is large enough, you can change the rules. For example, if everyone chooses a central location, it is actually based on traffic logic. By default, all passive traffic is distributed to these hot spots. However, if the traffic distribution of a project party is decided through voting by the DAO organization, and everyone decides that the traffic distribution should be randomized, then the hot spots of traffic do not exist.

Lu Aifang: How to sell land, how to make land transactions more active, and what methods do platforms usually take?

CK: Different platforms do it differently. For example, Decentraland and Sandbox have a lot of interaction with capital and B-side, which can promote the circulation of land and attract more people to enter the project. But Cryptovoxels is very different in this regard. The project side only makes products, and all operations are the player’s own business.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

Source of land price trend of Metaverse platform: metacat

Lu Aifang: What are the profit models of the platform side?

CK: It is mainly land sales, the bulk of which is transactions in the primary market, and then there are royalties for secondary transactions, which are written in smart contracts, and the proportion is not very high.

Lu Aifang: Is the land transaction done on the platform?

CK: The Metaverse platform in the Ethereum ecosystem, secondary market transactions are all done in third-party markets like OpenSea. Some project parties will make their own trading platforms for the primary market, such as Decentraland, but its secondary market is also OpenSea. Like Cryptovoxels, there is no primary market. Users can see whether a piece of land is being sold, how much it is selling for, and who the neighbors are, but the final transaction is still through OpenSea.

Can Otherside succeed?

Lu Aifang: Boring Ape does Otherside, do you think it can be successful?

CK: From the development path of Boring Ape, it can be seen that it is very good at brand marketing. The project party is now working on Otherside and has chosen to cooperate with Amonica to sell land. At the same time, it is cooperating with another technical team to make products. Obviously they are still doing what they are good at, and handing over the things they are not good at to people who are better at it. This is very right.

Whether it is a boring ape or a mutant ape, it already has a relatively large user base and has gathered a lot of attention. How to use this attention or consensus in its Otherside project? Just to speculate on the land, but to really contribute to the ecological prosperity of the Otherside platform, this is a relatively big challenge.

At present, we see a lot of bubbles. These bubbles are generally short-term and medium-term. The reason for the bubbles is whether people come in with a long-term mentality. It takes a long time to build the product form of the Metaverse itself. Several veteran Metaverse projects in Decentraland started in 2018 to achieve the level of availability today, and there is still a distance from the product experience of web2.

The otherside also has to go through this process, which may be shorter, but it still has to be experienced, so it is also a long-term thing, and the mentality of the holder is very important.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

Source of the share of land transactions on each Metaverse platform: metacat

Lu Aifang: During this period of time, the sharp fall of cryptocurrencies will not cause a big blow to Metaverse Real Estate?

CK: Every industry will go through quite a few twists and turns in the development process. For example, the .COM bubble burst around 2000, but those companies that survived from this bubble created our web2 landscape today. There are bubbles that need to be squeezed out, otherwise this ecology is actually unhealthy, and it will be difficult for it to go further.

Lu Aifang: What stage do you think Metaverse Real Estate is in now?

CK: The Metaverse is still in its embryonic stage, and there is a Wikipedia called World Wide Web Timeline. It lists important events in the Internet field for each year from 1989 to 2014. When we take the important nodes of the current Metaverse development, important events, user scale, and product maturity to correspond, it may be equivalent to the Internet in the 1990s. So, the Metaverse is still in a fairly early stage.

Lu Aifang: The current platforms may not be able to reach the end, and there may be many new platforms in the future?

CK: Yes, these Metaverse projects in the current public chain ecosystems are generally still lacking in innovation. In addition to land prices, everyone needs to pay more attention to more possibilities in business. These are the directions that are really worth exploring and can bring value to the Metaverse.

Business Models in the Metaverse

Lu Aifang: Speaking of business ecology, what business models have been explored in Metaverse?

CK: One is architecture, not everyone has the ability to build, so many such construction institutions have been born. For example, ME, Penglai in China, Voxel Architects in foreign countries, and several important venues in the center of Cryptovoxels are all built by them.

The other type is that everyone has a virtual avatar when they enter the Metaverse, and everyone will pursue some personalized dresses. Now some commercial forms are sprouting, such as clothes, hats and jewelry that specialize in digital. Virtual fashion is a big category, not only for wearable digital goods, but many luxury goods have entered the Metaverse for brand promotion.

Metaverse real estate goes down, will Boring Ape's Otherside cool?

Metaverse Fashion Week in Decentraland

And then there’s advertising, which is a very popular business model for web2. In the time of web 3, advertising content can be very vividly presented. And for consumers of these content, they can use the token mechanism well to record and motivate users.

Of course, all of these are based on decentralization. Users must realize their own identity and data, so that the data is truly owned by the user, and then they can build a new product form or business form based on this.

Lu Aifang: What is the difference between web 3.0 advertising and current Internet advertising?

CK: First of all, from the perspective of content presentation, the current advertisements are pictures, audios, and videos, and the advertisements of web 3.0 can be in any 3D form, and it can even be walking.

Secondly, in web2, users provide their own data one-way and pay attention, but they do not get corresponding benefits, but are exploited by the platform side. After the web 3 user really owns his own data, he can decide whether to pay his own data and attention. If he sells this part of the data, he can get the income through some token mechanism, and this income can be obtained in the form of smart contracts automatic completion. Now KOL has an advertising agreement with the platform, and the settlement is made on a regular basis. At that time, it can be automatically settled.

Plus, the user can choose things like filters, choose what I see and what not. These three points are the big differences between web3 and web2 advertisements.

Lu Aifang: This has been achieved. Is there a case? Is it only theoretical?

CK: There are at least six or seven advertisers in the Metaverse that we have followed, but the overall product completion rate is not too high. In addition, the platform traffic and attention are still not enough, so there is no complete realization of the aforementioned form.

Lu Aifang: What other entrepreneurial opportunities are there in the track of Metaverse Real Estate?

CK: I think it is still necessary to explore the “practicality” and commercial possibilities of virtual land, because land is not like stocks or other financial assets in the physical world, it is a real existence. In the Metaverse, the attribute of geographic location is not so strong, and its attribute as a practical asset is more worthy of in-depth exploration, not just to operate NFT assets like avatars.

Lu Aifang: Will virtual real estate have any impact or competition with real developers?

CK: What I’ve seen is some developers in the physical world have moved their capabilities directly into the Metaverse, and they’ve expanded into a new business. There is no competition yet, after all, there is no way for our flesh to live in the Metaverse.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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