the latest big real estate market isn't
on scenic coastlines or in major cities
it's in the metaverse where a growing
number of investment firms are spending
millions to acquire digital property
owning land now in the metaverse is a
little bit like buying land in new york
250 years ago metaverse real estate
isn't all that different from property
in the real world it just exists
digitally in 3d cities where users can
simulate real-life pursuits like
shopping playing games or attending
virtual concerts there are houses that
you can walk into there are shops that
you can go
into and buy things uh and this real
estate in the metaverse
is increasingly for sale the idea behind
investing in digital land is that once
you own it you can make money by
developing virtual property and leasing
it out we bought it because we want to
do something very big there we want to
do something that's immersive and
exciting and in order to do that you
have to have lots of lots of space of
course digital real estate is still
considered a very risky investment so
what exactly led to this virtual land
boom and what factors make it so
valuable
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right now the metaverse is an evolving
space that comprises multiple digital
worlds where users can interact with
avatars many of these digital spaces
appear cartoon-like while others feel
like virtual recreations of the real
world
andrew kegel is the ceo and co-founder
of tokens.com an investment firm
specializing in cryptocurrency and
metaverse real estate acquisitions
land in the metaverse looks a little bit
like a monopoly board
in that you have these parcels of land
and you want to try to acquire as many
parcels of land on the monopoly part
there are only a few platforms where
investors can buy and sell real estate
each with their own unique
cryptocurrencies each platform has a
limited number of parcels available for
purchase which is tracked using
blockchain technology
in november republic realm a firm that
buys and develops real estate in the
metaverse said it paid 4.3 million
dollars for land in the world of sandbox
it's the largest digital property sale
publicized to date the whole reason why
it is a store of value is because at the
outset each metaverse platform declares
exactly how many parcels there will be
so they would be cannibalizing the value
of their own holdings if they continued
to mint more and more of it so that that
tenet of scarcity
is what gives the category value as in
the physical world location is a major
factor to consider when buying digital
land
areas that are
busier or have more visitor traffic like
the downtown areas the parcels of land
that are for sale there would be worth
more than those that might be in the
suburbs once you have this parcel of
land you can use various programming
tools to create things like an amusement
park
a casino a museum you can build whatever
you want investors are betting that
individuals and companies will spend
money on virtual developments like homes
and retail space
and as more people join these online
worlds the properties will increase in
value you know if you build a mansion
you might sell it to someone who's very
wealthy and wants to spend thousands of
dollars or hundreds of thousands of
dollars on a mention from the metaverse
or if you build a mall or an office
tower you're gonna you're gonna lease
out the space to companies and you're
gonna collect rents tokens.com said it
paid 2.5 million dollars for attractive
land into centerlands fashion district
decentraland is a 3d decentralized
virtual world that was launched in 2017.
the long-term vision
is that we want to turn that
property that we've purchased there into
the rodeo drive or the fifth avenue of
the metaverse our goal is to be
the dominant and leading metaverse
landlord
companies pay an architect to design
virtual homes or malls and a game
developer to build them zoning rules
limit what and where a company can build
in the metaverse but unlike the real
world metaverse buildings can defy the
laws of physics
so there's a point in the development
cycle where it looks nearly identical to
real world real estate development so
you hire an architect you come up with a
mood board you pull images of other
other spaces and buildings and designs
you like and you figure out what it is
you're going to build and then from that
point forward it actually turns into
video game development so then you hand
it off to 3d renderers and then to 3d
developers who make it interactive some
of republic realms developments include
a virtual mall which it leases to
retailers selling fashion for avatars as
well as a master-planned community of
around 100 villas on private islands
that it sold to individuals so in some
ways these immersive e-commerce
environments that we're building are
really 3d equivalents of marketplaces
like amazon like etsy where multiple
different sellers and and retail
products or experiences can be in one
place but not have to build all the tech
themselves advertising and brand
partnerships are another enticing aspect
of metaverse real estate investors
anticipate a future in which digital
property owners can work with brands
that want a presence in these growing
digital worlds
this is not just an opportunity to
continue to build their brand but it's a
way to introduce their brand to a whole
new demographic of people that are young
gamers
into crypto and all these types of
things
of course investing in digital
properties is still very risky and
highly speculative unlike in the real
world the value of virtual properties
could plunge if the world they are in
loses popularity and people stop
visiting it prices can also be slammed
by the volatility of cryptocurrencies
it's really a third derivative
investment of crypto highly volatile
highly speculative but the reason people
are drawn to it is precisely for that
reason because there is the potential
for outsized returns and that volatility
is what they came for
in order to reduce that risk investors
are buying land in a number of different
virtual worlds republic realm for
example says it owns more than 3 000
plots of digital land across 24
different worlds
if you bought crypto 5 or 10 years ago
you're a very rich person now and people
see that and they're looking for other
things like that to replicate that
growth and so
all these other blockchain based
investments including metaverse real
estate are appealing to people for that
reason
interest in the metaverse and the
properties within it accelerated as
people spent more time online during the
pandemic
it got an even bigger boost after mark
zuckerberg announced facebook's name
change to meta platforms incorporated
reflecting the company's focus on
creating online worlds in the metaverse
i think the the light bulb just went off
in a lot of people's minds and said hey
this is something that's going to
continue to appreciate and appreciate
quickly if the trend of people
congregating in these environments
continues to grow according to the
digital currency investor grayscale the
global market for goods and services in
the metaverse will soon be worth one
trillion dollars so the next generation
of tech users which is why mark
zuckerberg anticipated this and renamed
his company they're going to require
from technology an experience that's 3d
and immersive and they are not going to
be content with their parents social
media or e-commerce experiences which
are 2d and about scrolling they're going
to want to go meet their friends in what
we now call a metaverse where they can
interact in a way that feels much more
human and much more normal