Metaverse real estate is not too different from real estate in the physical world. Part of your life is already digitized. You have the option to shop in a mall, but you probably shop online instead. You could collaborate with coworkers in person, but communicating with them over Zoom might be more efficient. You can send out handwritten letters, but you most likely send emails for convenience. Our lives are increasingly digital, so why not have a place where you can coalesce all these different interactions?
The metaverse is like a giant Monopoly board with a limited number of parcels. Each parcel is a destination where you can interact with other people, buy digital goods or socialize with friends. Some locations are stylistically animated, while others look like renderings of the real world. The process to build in the metaverse starts with virtual development companies who pay an architect to design the properties and game developers who construct them. Zoning rules limit what and where a company can build.
Investors are betting that people will spend money developing these virtual parcels of land into malls, mansions, casinos, parks, etc. As more users interact with the metaverse, each parcel will appreciate in value. According to CNBC, total sales have topped $500 million in the metaverse, and are expected to double by the end of 2022. Once the metaverse hits a critical mass of users, the potential for advertisement and leasing comes into play.
If you are interested in purchasing, there are only a handful of platforms available: Nifty Island, Axie Infinity, Pixelynx, Star Atlas, Decentraland, and The Sandbox. Each has a unique cryptocurrency, and a limited number of parcels available for sale, creating a scarcity of land similar to that of a metropolis like New York City. All of the transactions are tracked using blockchain technology. Digital real estate in the metaverse is essentially a derivative of cryptocurrency. The volatility and scarcity of Bitcoin, drew people to the asset class and the metaverse could be the next big thing. Republic Realm, a firm that buys and develops real estate in the metaverse, already spent $4.3 million for land in the sandbox. Last year, Facebook changed their name to Meta, indicating a perspective shift to the next wave of digital interfaces.
If you still prefer physical real estate but want a taste of the metaverse, Celebrity real estate broker Ryan Serhant has created something just for you. It’s called UNIVERS, which is a type of metaverse that aims to be a virtual operating world for real estate agents and employees. When it is launched, transactions of tangible properties can be streamlined in a new way.
Will the metaverse be a new frontier for real estate transactions?
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