Land purchase on the metaverse: A booming digital industry
Digital property and real estate are becoming increasingly popular on the metaverse, with transactions mounting to millions of dollars.
Millions roll out on the property market in the metaverse, with 'meta-money' - cryptocurrency.
This week, a US-based company, Republic Realm, announced that it had spent $4.3 million on digital land - a record-breaking number - through The Sandbox, a virtual community-driven world platform, where users can buy 3D pixelized assets, play The Sandbox Game, and attend events.
The rival virtual platform, Decentraland, has also witnessed a $2.4 million land purchase by Canadian cryptocurrency company Tokens.com.
Investments are going as far as governments opening embassies, as Barbados has announced recently, planning to open its "metaverse embassy" in Decentraland.
In the past few weeks, according to crypto data website Dapp, land worth more than $100 million has sold in the past week across the four largest metaverse sites, The Sandbox, Decentraland, CryptoVoxels, and Somnium Space.
Cathy Hackl, a tech consultant who advises companies on entering the metaverse, said it's not surprising that the market is booming and spawning an entire ecosystem around virtual real estate, from rents to land developers.
"We're trying to translate the way we understand physical goods into the virtual world," she told AFP.
Navigating through the metaverse is done through VR goggles, allowing users to not only move and socialize with real people but also to purchase assets as though it were real-life property, which they can rent out and sell.
"They can build on it, they can rent it out, they can sell it," Hackl said.
A fashion district in the metaverse
Canadian Tokens.com purchased some land in Decentraland's Fashion Street district, which it aims to turn into a hub for luxury brands to open branches of their stores.
"If I hadn't done the research and understood that this is valuable property, it would seem absolutely crazy," admitted Tokens.com CEO Andrew Kiguel. He continued, "That is advertising and event space where people are going to congregate."
Last May, a Gucci handbag was sold on the Roblox platform, prompting Kiguel to hope that Fashion Street will look something like Fifth Avenue, New York.
How can the land be profitable? Kiguel explains that simple transactions like buying a billboard, or complex transactions like owning a store with an employee can make a user money.
As for the value of the land investments, it mainly depends on whether people will start using these sites or not, as well as on the volatility of the cryptocurrencies used to buy Non-Fungible Tokens (NFTs).