For people who don’t regularly follow cryptocurrency and blockchains news, the exposure they have is often limited to groundbreaking news like the rising price of Bitcoin, massive purchases of NFTs, and etc. Some of the occurrences that have made headlines are virtual land sales that have cost up to $4.3 million. So what are virtual land sales, and why are they so expensive?
Before you understand virtual land, it’s important to know what the metaverse and NFTs are, which are both covered in our previous article. As mentioned previously, virtual land is a NFT which users have ownership over once they buy it. Similar to a domain name, users can then design, customize, and build anything they wish within their land. In two of the arguably most popular metaverse projects, Decentraland and The Sandbox, real estate is denoted by an individual 1×1 plot of land, that measures 16m x 16m and 96m x 96m respectably, and represented similarly in other metaverses as well.
For users looking to create a bigger and more extravagant place of operation, estates can be created/bought by connecting two or more adjacent plots of land together. Each metaverse has their own specific rules regarding estates, such as not allowing the merging of land when there is a parcel of land in between, such as a plaza or a road.
Just like real estate in real life, a metaverse’s land is limited, keeping the value of land stable. The location of your plot matters as well, as there are areas that are more highly populated than others, garnering much more traffic. When purchasing a plot of land, buyers can gauge the popularity of their desired spot by looking at the popularity of the other land around it, which is influenced by how attractive their storefront and/or game is, or even who the owner is. Previously, a buyer made headlines when he paid $450,000 for a plot of land because it was located beside world-renowned rapper Snoop Dogg’s metaverse mansion.
When hearing news of virtual land purchases, it is only fair for one to wonder why, and what can they be used for? Well, the answer is relatively simple. With the world becoming more and more technologically advanced, current online capabilities are being pushed further as more and more physical things can be done online. The most popular use of land is to monetize it.
Some ways to make use of your land to get the most bang for your buck, you can:
Advertise: You can allow other businesses or anyone trying to advertise something buy a spot on your land to gain more traffic and viewers to their product or service. The price you offer to an interested party should be made in consideration with the value of your plot location.
Gaming: Users can be charged to enter a plot of land to participate in games created by the owner. An alternative use is using land to help indirectly earn money, such as in Axie Infinity, where land can spawn valuable resources and give Axies special abilities and upgrades that help them win more fights that ultimately rewards them with NFTs.
Open a storefront: Although many users have opted to turn their land into a gaming area, many people and metaverses developers are seeing the effects it could have on e-commerce. Metaverse projects such as “Space,” is creating a “commerce metaverse,” where people can design and build their own business storefront to sell products on, or even concerts are galleries where people can get in after paying a fee.
Work: Many global companies, such as Microsoft integrating their office-use products into the metaverse, and PwC Hong Kong (Who we mentioned in a previous article), to work inside a metaverse.
Where Do I Buy Virtual Land?
If you’re optimistic about the future of the metaverse and have a business or business idea that you think would work well in it, you can consider buying a plot of land to start off your journey. When buying your first plot of land, there are many elements to consider before you shell out thousands and maybe even millions of dollars for your new business location.
Although there are a number of metaverse projects currently available and a number of them coming out soon, the two most popular ones are Decentraland and The Sandbox, as mentioned before. Which metaverse you decide to buy your land from is incredibly hard to decide, but there are certain factors that may act as a telltale sign for your decision. It is best you try out each metaverse yourself to get a better understanding of what type of business may fit best with each one, and which one fits yours the best.
Between Decentraland and The Sandbox, some concrete evidence that you may base your findings off of are the people who have invested in each one. Although both projects have some similar backers, The Sandbox is backed by one of the biggest investment companies in the world, SoftBank. Additionally, The Sandbox also seems to have more mainstream names partnering with them, such as musicians Steeve Aoki and Snoop Dogg, companies and brands such as Adidas, Binance, Opera, and even the hit AMC TV series The Walking Dead.
Decentraland also has many notable partnerships as well, boasting a list of some of the biggest venture capitals in the crypto industry such as Digital Currency Group, Coinfund, and Animoca. They are also partnered with NBA Champion & superstar Stephen Curry, tech giant Samsung, and many more.
We suggest doing a deeper dive by reading and researching about each projects’ backers, whitepaper, roadmap, current and past businesses, and everything in between.
Once you have decided which metaverse to develop your venture on, you can easily buy your desired plot by connecting your NFT wallet such as MetaMask on OpenSea or the metaverse’s dedicated marketplace. To buy the plot of land, you can treat the transaction like a regular NFT purchase, as virtual land is still a NFT, albeit with more utility than the NFTs you may have been exposed to, at least
When it comes to virtual land, it can be quite the risky investment due to the nature of the metaverse. It’s hard to predict its future as the metaverse is a relatively new and undefined part of web3, and many people don’t know what it is, how to use it, and what its capabilities are. Current uses of the metaverse, such as gaming and e-commerce, are relatively simple, and it’s near impossible to predict exactly where the future is headed, especially since many virtual world capabilities are at most, just ideas. If you want to give virtual land a shot, make sure to do all the proper research, and buy at the most reasonable price. Don’t fall into all the buzz about virtual land sales. Just like the crypto market, it could lose all its value in the blink of an eye!