Because of decentralized technologies, real estate may be forever transformed. As the Metaverse expands, so will digital real estate.
While Mark Zuckerberg claims the Metaverse is the future, others believe it has already begun. The word “Metaverse” was coined by science fiction novelist Neal Stephenson in his 1994 novel Snow Crash. Hiro Protagonist, the primary character, navigates the virtual world within the pages.
Millions of people have also worked, played, and interacted in the Metaverse, which is part of the online Second Life reality, since 2003. While the game, which had a heyday in the early 2000s and featured some blocky graphics, is a long cry from the present Metaverse vision laid forth by firms like Meta and Microsoft, the concept of a virtual metaverse where people interact is not a new one.
Decentraland is currently the most well-known modern-day Metaverse, incentivizing a global network of users to purchase and sell digital real estate and explore, interact, and play games.
The Decentraland Foundation was founded in 2015, and the project’s initial coin offering (ICO) in 2017 raised approximately $26 million. While Decentraland is large and has a lot to offer, the platform has brought a lot of attention to the lucrative and ever-growing digital real estate business.
On November 25, media sources reported that the non-fungible token (NFT)-based Metaverse Group real estate company paid $2.43 million for a piece of Decentraland “land” to help with intentions to enter the digital fashion industry.
Metaverse monetization is shaking up the real estate industry
It’s becoming evident that commercial real estate in the Metaverse will play a significant role in the global real estate business in the coming years. Tokens.com signed a statement of intent in the fall of 2021 to purchase a 50% stake in Metaverse Group’s digital real estate portfolio, which will thereafter be marketed as the first REIT for digital real estate. According to the Metaverse Group, a public listing could occur in 2022 or 2023.
Because of the popularity of purchasing and selling digital property, businesses such as the Metaverse Group perform many of the same functions as a traditional real estate corporation in terms of buying, selling, and marketing. As prices climb and purchasers appear to be agitated over virtual land, some are skeptical that investing in digital real estate would prove wise in the long run.
Interest in metaverse real estate is growing despite the exorbitant prices, particularly as the coronavirus outbreak has driven more people online and made them more likely to socialize electronically. Those interested in metaverse real estate face competition from celebrities who have made no secret of their digital real estate activity.
In late September, the Sandbox announced cooperation with famed rapper Snoop Dogg to build up his residence and NFT collection in the Metaverse. The next month, Paris Hilton collaborated with Decentraland and Genies to serve as one of the primary artists at the inaugural Metaverse Festival, which took place in late October.
How real estate investors are pivoting to virtual properties
The attention and interest shown to the Metaverse have not escaped the attention and interest of other firms, like Meta, formerly Facebook, and Microsoft, who are ready to get in on the action.
Like traditional real estate, which generally retains value even during difficult economic times, metaverse properties continue to thrive despite fluctuations in Bitcoin (BTC) and other cryptocurrencies.
The popularity of NFTs, combined with rising interest in online environments, contrasts with the restricted amount of land available in metaverse virtual worlds, keeping prices high. Decentraland, for example, contains only 90,000 land pockets.
Investment firms are also dipping their toes into the Metaverse and learning more about how they may participate. The Metaverse will be more than a buzzword because of its high pricing, popularity, and ease of purchasing and selling virtual land (as opposed to traditional real estate).
As more individuals enter the Metaverse, skilled investors and buyers who scoop up homes in prime places will look very smart, similar to the domain name scramble during the early days of the internet.
As the Metaverse grows and expands, so will digital real estate. Savvy buyers and investors would be wise to remain ahead of the curve and anticipate the Metaverse real estate boom would continue indefinitely.