Metaverse looks more and more like a luxury item: for now it is a semi-deserted land where super VIPs, the hyper-technological elite and investors shop.
Two billion dollars. Metaverse is semi-deserted, but within a year two billion dollars worth of land has been purchased. How is it possible? The answer is quite simple, Metaverse is for the few people who have a lot of money. According to lender Morgan Stanley, Metaverse will represent more than 10% of the luxury market by 2030.
Inside are super VIPs who party in luxurious toy villas, futuristic investors, the elite of the hypertech sector and pioneers who dream of leading the market to the promised land. For now, however, the metaverse is limited to being a wasteland colonized by rogues. Researchers from DappRadar, a portal that analyzes data related to the Metaverse, claim that last year $1.93 billion was spent on cryptocurrencies to purchase virtual land. Still, the value of Decentraland and The Sandbox has been plummeting for months.
Shopping in the Metaverse
Virtual property prices have increased by 500% since the Facebook-Meta transition (October 2021). Houses in the virtual world cost just as much (if not more) than houses in the real world. For example, an anonymous user paid $450,000 to buy property near Snoop Dogg. While virtual land developer Republic Realm spent $4.3 million on land at The Sandbox. The investment company Tokens bought a tower (yes, like in the middle ages) in the Decentraland Fashion District for $2.5 million.
Paris Hilton decided to treat herself to a private island on Roblox, she named it “Paris World”, and it is a copy of her mansion in Beverly Hills, where she plays her historical parties on a loop and organizes trips on her virtual yacht . Victoria’s Secret model Sara Sampaio is also following suit. She also bought a virtual island worth $71,000.
Why are the prices so high?
Units of measurement are not in square meters, but in lots, lots or lots. Countries are small squares or rectangles on a large map, identified by specific coordinates. As of February 2022, 268,654 games were available on the four main platforms (Decentraland, Sandbox, Somnium and Cryprovoxel), of which 62% were on Sandbox. These 96 by 96 meter parcels cost $12,700. On Decentralend, on the other hand, a 16X16 pitch is worth $14,400.
It may be the metaverse, but the dynamics are the same as in the real world. Earth is not unlimited, and as always scarcity creates value. Not only that, the price also varies by location, yes in the ether there is central and suburban, for example on Decentraland the plots near places like Dragon City and Vegas City are more expensive, many buy instead of betting that a certain area will be busy. The value of land is also determined by the perceived importance of the platform it sits on.
According to Yat Siu, co-founder of Animoca Brands, owner of Sandbox, “what makes the virtual world valuable is the fact that the most influential people in the space are building it.”
This is how Decentraland works
Why buy land in the Metaverse
Metaverse Group, a real estate agency in the virtual world, said that “buying a house in Metaverse is like arriving in New York when it’s all in the countryside and you have the opportunity to buy a piece of Soho. same meaning, and opened its first virtual office, “metaverse will infiltrate all sectors and create profit opportunities of more than a trillion a year. Bubble or no bubble, there are those who believe it, invest and buy, right now on the market there are 12 real estate agents just for Metaverse.
It is bought mainly for three reasons. The first is an exhibition function, so purchase lots to display/exhibit, showcase purchased items or even your own artwork. Those who want to build commercial businesses, shops, galleries. It is no coincidence that the biggest investments come from the world of fashion (Gucci, Balenciaga, Tommy Hilfiger, Dolce & Gabbana). Amsterdam-based fashion house The Fabricator produces avatar-only clothing and designs custom collections and apparel for users of Decentraland, The Sandbox, and other crypto-metaverses. And there are also those who buy to let to the highest bidder and those who hope to sell their land at the right time.
The problem of decentralization
It is not necessarily profitable, but there is a problem, it is decentralized. There is not just one metaverse, there are many, and it is possible that one or more will suddenly lose value. The risk is therefore to end up buying land at crazy prices, which is no longer worth anything. For example, due to an unexpected devaluation. Everyone wants to sell, no one wants to buy. Using the Metaverse Group metaphor (buying in the Metaverse is like taking a house in Soho before anyone else), the problem is that yes, it’s kind of like buying a flat in Soho, but in a universe where others could is created. endless versions of Soho.