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O, Pioneers! For those looking to find uncharted territories, there are lands still to be discovered. Namely, real estate sold via the metaverse. If you're confused, you’re not alone. Exploring land on the metaverse first requires a firm grasp of what the metaverse is. One problem: The definition is constantly evolving.
One explanation is that the metaverse is a digital world that’s parallel to the real world—something akin to cyberspace—encapsulating virtual reality, artificial intelligence, games, and mobile technology. In a VICE article, venture capitalist Matthew Ball suggested considering the metaverse a 3D version of the internet and computing. Andrew Kiguel, CEO of Tokens.com, calls it the next iteration of social media where users can meet and interact in a 360-degree immersive world.
So what’s the value proposition of such a new concept? Metaverse real estate sales reportedly hit $500 million in 2021 and industry experts expect it to double this year, according to CNBC. Some brands already in the market include Atari, McDonald’s, Death Row Records, Adidas, and Samsung. Metaverse real estate development companies are selling everything from virtual private islands (originally $15,000 each) to land next to celebrities' virtual mansions ($450,000 to be rapper Snoop Dogg's neighbor).
Fund That Flip compiled information about how to get started in real estate investment in the metaverse, and why you may want to. Information was sourced from news articles, tutorials, and explainers from experts in the crypto and investment space.
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What is metaverse land?
In this shared virtual space known as metaverse land, real estate is purchased through virtual real estate platforms. It’s possible to buy everything from land parcels to structures. There is limited availability, which often results in competitive bidding amongst buyers. Purchases involve non-fungible tokens, or NFTs, that act as real deeds, and the blockchain serves as a registry, providing a record of the transaction. Once a metaverse land sale is concluded, owners can sell, rent, or build on their virtual property.
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What are the platforms to buy land in the metaverse?
A growing number of platforms sell real estate on the metaverse. The “Big Four” are Decentraland, The Sandbox, CryptoVoxels, and Somnium Space. CNBC recently cited research from MetaMetric Solutions indicating 2021 sales of the Big Four topping $501 million. The same report forecasted potential sales could reach nearly $1 billion.
As for inventory available from the Big Four, CNBC said in February 2022 that 268,645 parcels of varying sizes were for sale. Decentraland and The Sandbox are dominating the space with the highest volume of sales, according to NonFungible. These two platforms run on Ethereum, a blockchain that powers financial services.
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Why invest in metaverse real estate?
Purchasing metaverse land is still speculative and highly risky. Janine Yorio, CEO of the metaverse real estate investor and advisory firm Republic Realm told CNBC, “There are big risks, but potentially big rewards.” That’s why for prospective buyers, digging into metaverse real estate to gain a clear understanding of its ins and outs is imperative.
In an article for The Motley Fool, realtor and general contractor Kristi Waterworth recommended spreading your investment across multiple platforms as the safest bet. Larger businesses and corporations like JP Morgan, McDonald’s, Atari, Samsung, and Walmart are jumping into metaverse real estate. Companies like these have an eye on advertising space like billboards in online meeting spaces, selling products in virtual retail shops, hosting real-time events like online concerts, and connecting with future customers through immersive digital experiences.
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To buy land, get a wallet and add funds.
Ready to seriously explore metaverse real estate? First, get a digital cryptocurrency wallet. This is necessary for accessing blockchain and storing cryptocurrency. Some browser-based options to explore are Metamask or Binance Chain Wallet. These allow for basic functions like buying, storing, sending, and swapping tokens. Whatever digital cryptocurrency wallet you choose will also need to connect to the platform through which you’re looking to make a purchase, and have the proper type of funding/crypto (tokens like SAND or MANA) used within that platform.
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Then, explore the marketplaces.
There’s nothing wrong with window shopping. Take a peek at what’s being offered on metaverse real estate platforms to see if something calls to you. For example, on Decentraland, you can head for the land offerings section. There, you can scroll through recent listings and find all kinds of real estate, even art galleries. To truly navigate platforms and get the full picture of offerings, you’ll need a digital cryptocurrency wallet in order to set up an account and gain full access.
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Bid on or buy the land.
What’s the next step? It’s possible to buy the land outright for the amount listed. If going this route, purchasers will be directed to OpenSea, the NFT marketplace where metaverse land transactions take place. If you prefer making an offer, there's a bid button to enter your offer.
If the seller doesn’t bite, the crypto put up for the bid will be returned to your wallet. If it gets a nod, then you’re off to OpenSea to complete the transaction. After you’ve nabbed the art gallery you were yearning for, browse around platforms to start building collections to showcase.