Thought it was a play concept? These people have gone to Metaverse to fry the land

“Metaverse” has been very hot recently, and it’s crazy. Against the background of the Metaverse fire, some buyers bought digital land at sky-high prices in the virtual world, and speculation in real estate in the virtual world seems to have become a trend, and there are even some celebrities entering the game.

“It’s ridiculous and cool”, this is the content of a newsletter reporting that Crypto Valley is building a new building.Decentraland is a virtual platform built on the Ethereum blockchain, and Crypto Valley is the business district of Decentraland. The building is owned by blockchain investor and will be a hybrid of Spain’s Ibiza nightclub and Las Vegas Bellagio resort. In a fantasy world that is not limited by the boring laws of physics, the rotating company logo will be suspended above the building, and nearby clouds will also be flashing lightning with the company’s logo. In contrast, the functional positioning of the tower to provide office leases and event venues for virtual currency conferences is unremarkable.

Game players have been trading pixelated real estate and other digital assets for quite a while. Now stimulated by the development of unique digital artifacts such as NFT (non-homogeneous tokens), and the hype surrounding the Metaverse, this transaction behavior is being extremely amplified. Metaverse is a rising virtual market, according to different people’s predictions, it may eventually generate 1 trillion to 30 trillion US dollars in revenue.

Real currency is changing hands. Some sales activities involve real-world copies. As an NFT-driven reshaping of the City of London, Legacy users have invested $54 million on the land in the game (the game is still in development and has no release date). SuperWorld is a virtual planet where people can buy a digital version of any location on the earth, claiming that its users spend an average of US$3,000 on real estate purchases. The current virtual currency prices of the Taj Mahal and the Eiffel Tower are roughly equivalent to 200,000 and 400,000 U.S. dollars, respectively, and their owners only spent less than 400 U.S. dollars when they bought them.

The completely fictitious world is also attracting investors. In November last year, Republic Realm, which manages and develops digital real estate, spent $4.3 million on the Sandbox platform to buy land, the largest virtual real estate investment so far. During the same period, spent US$2.4 million to purchase the Fashion Street area of ​​Decentraland. In the gambling area, there are many nightclubs and casinos, and users can win virtual currency. In the art district, the real-world Sotheby’s auction house opened a virtual gallery. When Decentraland went online in 2017, the smaller plots were around US$20, and they can now sell for as much as US$100,000. Its competitive platform Somnium Space also announced that in 30 days in November, user land sales exceeded 1.8 million U.S. dollars. In other virtual worlds, the concert hall plays online performances of digital avatars of popular superstars such as Justin Bieber and Ariana Grande. The empty virtual store may soon be rented out by Gucci, Dolce & Gabbana, Burberry and Balenciaga, etc., and these big fashion brands have already sold branded goods in certain Metaverses.

Will this digital real estate boom last? As in the real world, profit depends on the flow of people and people’s willingness to consume real money. If you want to go to the next level, you must improve the user experience. Popular Metaverse platforms such as Decentraland and Sandbox are still rough. Ordinary users may not want to be like previous gamers who use graphics cards, VR equipment, and ultra-fast broadband to make the online world feel more real.

The second risk is volatility. The sale of virtual real estate generally involves the exchange of specific Metaverse cryptocurrencies. Decentraland has MANA, and Sandbox has a digital token called SAND. The price of these cryptocurrencies may fluctuate violently, even far exceeding that of Bitcoin or Ether, and the asset prices of such mature digital currencies themselves are already difficult to predict. If a specific Metaverse strikes a thunder, the price of the related cryptocurrency may return to zero.

To reduce risk, early investors such as Republic Realm are diversifying their positions. The company claims to own land on 23 Metaverse platforms. But unlike the real land value which depends on its scarcity, every virtual world is actually without boundaries. In theory, the number of virtual worlds is also unlimited. There are already hundreds of quasi-metacosms, and with the advancement of encryption technology, there will be more Metaverses rising. This constitutes a contradiction. With the rise of Metaverse, people expect virtual real estate prices to soar. But the prosperity of the Metaverse means that scarcity is reduced and prices are falling. Compared with the laws of physics, the laws of supply and demand may be a more difficult gap for virtual real estate.

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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