Over 3 million people attend a virtual celebration! What role will the Metaverse and Web 3.0 play in real estate in the future?

Perhaps the real estate industry has not had time to adapt to the development of existing technologies, and must accept a new round of subversion!

At present, in the field of business technology, there are two hot words that are constantly on the screen.

One is Web3 and the other is the Metaverse.

So, how will the development of “Web3” and “Metaverse” affect the future of real estate? Michelle Killoran, who works on proptech, interviewed Dean Hopkins, COO of Oxford Properties’ global real estate investment and asset manager, and Taylor Clark, strategy associate, and Occupier, a rental management software start-up, on this subject. *Founder Matt Giffune, global construction giant Turner Construction Vice President and Chief Innovation Officer Jim Barrett, Eve Wealth founder Alana Podrx (Eve Wealth is an individual investor investment platform focused on teaching the basics around web3).

What is Web3 and the Metaverse?

Before discussing in depth, let’s unify a basic understanding.

In simple terms, Web3 is the decentralized internet, built on distributed technologies such as blockchain and Decentralized Autonomous Organizations (DAOs), rather than centralized on servers owned by individuals or companies.

The idea of ​​Web3 is to create a more democratized Internet. No single entity can control the flow of information, let alone disrupt the network just because someone who owns the hardware can “pull the plug.”

In theory, the servers, systems, and networks where applications in Web3 run, as well as where data is stored, will be owned by users themselves, who vote to determine the rules and regulations of the network.

Why is it called Web3? Because it is believed that it will be the third major revolution of the Internet after the global web (Web1) and the user-generated web (Web2, social media).

Over 3 million people attend a virtual celebration! What role will the Metaverse and Web 3.0 play in real estate in the future?

On the other hand, “Metaverse” is currently really short for virtual world where users can interact with each other and engage with applications and services in a more immersive way.

We discuss them together because the two are inextricably linked. The growth and utility of the Metaverse depends on the development of the technologies used to build the web3 (blockchain, cryptocurrencies, non-fungible tokens (NFTs)).

When we think about the different waves of cutting-edge technology, the real estate industry is not necessarily in the lead.This is a traditional industry where technology adoption tends to lag. For example, artificial intelligence, machine learning, virtual reality and blockchain technology are still in their infancy in the field. In fact, when talking to traditional real estate companies, there is often a disconnect between the problem they’re trying to solve (i.e. replacing Excel, enhancing collaboration, data tracking) and the technology “solution” they’re dealing with. There is still a huge need for workflow automation software in general, especially in commercial real estate and construction (the residential real estate market is arguably a little further along).

How does real world real estate see the web3 and Metaverse?

If we’ve established that both the web3 and the Metaverse are about the “new internet” and the digital world, why is the old school’s Would traditional real estate companies consider these?

The level of innovation in decentralization and blockchain technology means that the potential applications of web3 are wide-ranging and will bring about meaningful change. Even if we don’t realize how much impact web3 will have on the industry, no one wants to be dragged behind the scenes.

With an estimated 25% of people spending at least an hour a day in the Metaverse by 2026, real estate companies certainly can’t ignore its existence. But the Metaverse itself is fraught with problems, such as the experience of a journalist confused by his decision to find out what all the hype is about (https://www.theguardian.com/tv-and-radio/2022/apr /25/a-barrage-of-assault-racism-and-jokes-my-nightmare-trip-into-the-Metaverse). Clearly, this area will face challenges.

According to Dean Hopkins and Taylor Clark of Oxford University:

“We’re watching this closely, but we haven’t seen a traditional landowner plant their flag in the Metaverse by acquiring large tracts of land or doing major development. Now, they seem to be trying to replicate a kind of tangible asset.

For example, when the coronavirus forced Times Square owner Jamestown to limit attendance at his famous New Year’s Eve celebrations, real estate investors rebuilt their properties and festivities in the Metaverse. The December 2020 virtual celebration was attended by 3.7 million people worldwide. The in-person event in Times Square can only accommodate 15,000 attendees, and in non-pandemic years, the event can only receive 58,000 attendees.

Matt Giffune added that Occupier is a company that provides tenants with lease management software and related data, and our platform basically provides the ability to manage short- or long-term contracts related to real estate. Also, these assets do not necessarily exist in the real world. As companies begin leasing digital storefronts, these agreements may have many fundamental similarities to real estate contracts today. A potential pre-emptive opportunity for us is to consolidate supply and/or demand for digital storefronts, meaning an opportunity to not only manage but also transact among occupiers. For a company like ours to take our attention away from there, that would be a missed opportunity.

So it’s clear that businesses at both ends of the scale are taking this evolution seriously, even if it’s only on a conceptual level. The fact that we’ve seen the use of traditional real estate terms like “land,” “plot,” and “development” in discussions around the Metaverse makes it hard for traditional players to ignore.

Assess potential impact

There are undoubtedly many web3 use cases that have not been seen or thought of yet, but several applications have been implemented today. Some web3 applications will only enhance existing processes, while others will fundamentally change the current way of working. One way to assess the potential impact of web3 and the Metaverse is to think about the life cycle of real estate, starting with the way transactions are organized.

Today, the process of acquiring and proving ownership in real estate is complex, lengthy, expensive, and involves many intermediaries. Blockchain technology has the potential to reduce this friction. Oxford University’s Dean said, “The increasing digitization of transaction artifacts, including smart contracts and digital ownership records (NFTs), provides immutable data with the potential to simplify transaction processes, increase transparency and require fewer intermediaries. , thereby reducing transaction costs.”

When it comes to payments, if digital forms of payment continue, landlords may eventually be forced to accept cryptocurrencies as a legitimate means of rent payment and a method of paying suppliers, contractors, etc.

Last week, real estate investment firm Jamestown announced that it had partnered with BitPay to accept cryptocurrencies for commercial rent payments. According to Real Estate Weekly, Jamestown will not receive or hold any cryptocurrencies and BitPay will act as a medium of exchange between Jamestown and its tenants.

“Blockchain technology and the digital assets it supports, such as cryptocurrencies and non-fungible tokens, are a key component of real estate development,” Jamestown president Michael Phillips told Reuters. “Allowing cryptocurrency payments is part of our strategy to innovate and larger digital assets, optimizing and maximizing our physical real estate through technology and virtual integration.”

The company plans to accept bitcoin, bitcoin cash, ethereum, wrapped bitcoin, dogecoin and litecoin, as well as five USD-pegged stablecoins: BUSD, DAI, GUSD, USDC, and USDP.

The project will initially launch in the US, with plans to expand to Jamestown’s assets in Europe. Jamestown is also considering a direct deposit program for employees who want to pay part of their wages in cryptocurrency. Additionally, the company will connect BitPay with its retail tenants to provide customers with cryptocurrency payment options.

The commercial real estate industry has been slowly increasing its acceptance of cryptocurrencies, although it is far from widespread. Last year, WeWork announced that Dit would start accepting bitcoin, ethereum and other cryptocurrencies for membership payments. Developer Property Market Group said last year that it would begin accepting cryptocurrencies as a form of payment for its pre-construction condo deposits at the E11 EVEN hotel and residences in Miami, although cryptocurrencies will only be used in the first step of the deposit process. Phases two, three and four were accepted, with banks and title companies still requiring crypto assets to be converted into U.S. dollars at the time of signing.

On the investment side, real estate tokenization, where ownership of physical assets is split and recorded on the blockchain, provides access to individual investors who are excluded from investing in institutional and accredited investors only outside the asset class. Decentralized ownership, enforced by a distributed open ledger, eliminates the risk of fraud through indelible proof of ownership, and reduces the number of middlemen, resulting in freer ownership transactions.

In terms of ownership structures, we are seeing the emergence of a new form of collective ownership governed by rules embedded in the blockchain through decentralized autonomous organizations (DAOs) or groups established by like-minded individuals. DAO ownership is represented by digital tokens owned by individual users and a few individuals or large corporations (such as landlords), and shareholders can vote on the creation, operation, and governance of the DAO.This could lead to a new form of collective ownership, such as being a tenant in a multifamily building operated by a DAO.

Traditionally, real estate and construction have been slower than other industries in innovation and digital adoption, but they are rapidly closing the gap. Certain web3 applications are already impacting the real estate value chain, while others will take time to mature. Real estate tokenization and division of ownership are already in place with the emergence of companies such as IPSX in the UK. Other applications, such as the shift in ownership structures to digitally native distributed entities (DAOs), will take more time to effectively penetrate the industry.

Jim Barrett of Turner Construction sees the potential benefits of increased transparency from web3. He said:

“Fundamentally, the construction industry has a source of information problem, the ‘tsunami’ of data and information that sweeps through any given project, and its various stakeholder companies in general, just keeps growing in frequency and size.

But as more technology sources provide information and pass it through more and more channels, the transparency of attribution and the accountability that comes with it will only become more opaque. At the same time, however, all the traditional risks of poor outcomes remain.

The new online world of web3 will be a welcome antidote to our growing (mis)information problems and will transform the construction industry and, more broadly, the process of developing and maintaining the built environment. “

The ultimate benefits of web3, especially blockchain, especially for the construction industry, seem obvious. Jim continued:

“Software solutions built on web3’s fully transparent and secure blockchain ledger technology will provide welcome visibility and accountability into who receives what information when it is received, and when it is passed on to others What might have changed.

Unfortunately, in our business, when parties end up arguing over the source of the information and the action taken from it, the winner is often not determined by merit, but by who better documented their claims. web3 may change the traditional environment in a meaningful and positive way. “

Web3, real estate and the changing nature of work

The pandemic has accelerated the adoption of hybrid work models, and the rise of the Metaverse is likely to further this evolution as companies consider building virtual spaces to complement their real-life counterparts.

Dean Hopkins said: “As the pandemic has accelerated the trend towards remote work and digital connectivity, I do think that in due course we will see a number of other employers follow Meta’s lead and explore opening ‘offices in the Metaverse’ ‘. How the landlord-customer relationship will evolve into the Metaverse remains to be seen, but I think it’s an area to watch.”

See retail as an early adopter

We were already seeing an increase in online shopping long before the COVID-19 outbreak. In addition to this, we have also seen the emergence of a new type of digital product NFTs.

Dean Hopkins and Taylor Clark offer their first-hand experience of what they saw in the space as lead hosts:

“While we are in the early stages of the web3 era, we are seeing retailers becoming first movers. Retailers see the Metaverse not only as an alternative channel to sell products, but as an opportunity to strengthen brand reputation and customer affinity. Brands in the form of NFTs Selling digital products, NFTs often reflect real-world products and/or are sold alongside physical objects.

For example, this past Singles Day, Burberry launched 1,000 sets of 3D deer animations. Customers who purchased this NFT also received a limited-edition Burberry scarf. All 1,000 apartments priced at $454 each sold out. But for now, they are trying to make the Metaverse an appendage of their physical space. You have to remember that in retail, your brand is everything, and making big moves that could impact your brand—like a massive shift to the Metaverse—requires a lot of thought and consideration. “

Occupier’s Matt Giffune believes that initial traction is likely to come from retail companies’ ad spend as they seek to build their brands in whatever Metaverse of the target customers they use…similar to brick-and-mortar storefronts. He added: Another opportunity could be to become the “operating system” for the Metaverse’s offices. Like today’s workplace management tools, how do you facilitate employee engagement with virtual workspaces?

infinite possibilities

While many early web3 applications will enhance existing processes, some of the potential outcomes of web3 have the potential to fundamentally disrupt the industry. No one knows what these are yet. Eve Wealth is an investment platform for individual investors focused on teaching the fundamentals of web3. Alana Podrx, founder of Eve Wealth, says even if a company feels it has “cracked” the impact of the web3 and Metaverse on its business, winning the real estate game in the digital world requires different skills.

“What if an owner wants to enter a new country where regulation and infrastructure are largely unknown? What would they do? They would take the time to research the market, hire people who have relationships with all the players on the ground, and understand the uniqueness of the market.

Speaking of web3 and the Metaverse, this new world has a new group of relationship teams with specific expertise that can participate in different blockchain protocols. Leaders in the digital world will be different from leaders who have traditionally won in the physical world. I expect a new wave of virtual real estate players to emerge. The risk here is very high, but so is the reward potential. Players who make strong strategic bets on the Metaverse will ultimately gain audiences and traffic. “

Jim Barrett also sees long-term possibilities in the construction industry:

“Another way in which web3 is changing industries is also in terms of sources of intellectual property. Perhaps the future of web3 will lead to creative problem solvers such as designers being able to legally attribute intellectual property to a work product so that they can later enjoy the right to Greater compensation for the original value of its ideas. We could see an opportunity to monetize the intangible output of knowledge workers. Perhaps NFTs are attached to the BIM deliverables provided by architects and engineers for the follow-up of that work product “Consumers” pay royalties for any subsequent use and benefit from that work product. This new business model will fundamentally change the process of turning vision into reality in the built environment.”

what’s next?

It is encouraging to see traditional real estate players taking this evolution seriously and thinking deeply about risks and opportunities. But I’m not convinced yet that our real and virtual worlds will collide in mainstream fashion anytime soon.

The industry faces many challenges such as payment process, transaction settlement, data tracking/transparency, asset ownership and space utilization (i.e. hybrid work). I’m curious how we can leverage the technology behind web3 to accelerate solutions to these widespread challenges. If you’re going to build a company in this place, I’d love to talk to you.

subversive

Through discussions and research, some interesting companies focusing on the web3/Metaverse and real estate (physical and virtual) have emerged.

Over 3 million people attend a virtual celebration! What role will the Metaverse and Web 3.0 play in real estate in the future?

Robinland

Description: Developer of a platform designed to mark high-quality real estate projects

Established: 2021

Funds raised: none

Practice

Description: Operator of an entrepreneurial association that aims to develop beautiful, vibrant, resident-owned cities

Established: 2019

Funding raised: $15 million

The Sandbox

Description: Metaverse allows users to buy virtual land in a virtual world

Established: 2018

Funds raised: $493 million

Milo

Description: Offer crypto-based mortgages by taking into account crypto wealth (versus sales)

Established: 2018

Funding raised: $24 million

Stageverse

Description: A social Metaverse platform designed to connect and discover cultures in 3D social experiences

Established: 2017

Funding raised: $7.5 million

EveryRealm

Description: Operator of a Metaverse ecosystem aimed at investing, managing and developing assets

Established: 2021

Funds raised: $65.9 million

Decentraland

Description: Metaverse allows users to buy virtual land in a virtual world

Established: 2015

Funding raised: $50.5 million

Spatial

Description: Helping creators and brands build their space in the Metaverse

Established: 2016

Funds raised: $47.3 million

Emperia

Description: Creator of virtual spaces with a focus on fashion, art and retail

Established: 2019

Funding raised: $500,000

Propy

Description: Enables people to sell their house as an NFT

Established: 2015

Funding raised: $2 million

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/over-3-million-people-attend-a-virtual-celebration-what-role-will-the-metaverse-and-web-3-0-play-in-real-estate-in-the-future/
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