Financial transactions in the Metaverse are processed in cryptocurrencies and powered by blockchain. It is a digitally distributed public ledger that eliminates the need for third parties such as banks.
Despite the FTX crash and crypto winter predictions, the Metaverse real estate market is expected to grow to US$5.37 billion by 2026.
In one of the most popular Metaverse worlds and where Sierra bought his US$10,000 in Sandbox, much of the virtual Land Rush is in the hands of global companies such as Adidas, Atari and Warner Music Group. These companies buy space to create entertainment, sell merchandise, launch virtual headquarters, and host immersive gatherings for employees and fans.
Last year, the total value of sandbox land sold via non-fungible tokens (NFTs) was estimated at US$167 million.
Land purchased directly from the sandbox is about US$400 per lot, but there is an active secondary market and the price is many times that.
Proximity to land owned by celebrities and big brands also drives up prices. After Snoop Dogg bought a lot in Sandbox and named it “Snoop Bath,” one buyer paid her US$450,000 just to be a neighbor.
“Land is becoming the infrastructure of the Metaverse,” said Sandbox co-founder Sebastian Borghetto.
“There are actors in this ecosystem developing and providing services that help people find suitable land, buy suitable land, and understand the value of that land.”
The Metaverse has been around since 2003, when Second Life, a 3D virtual world platform, was launched.
However, it wasn’t until the second half of 2021 that virtual real estate really took off. When Mark Zuckerberg announced that the social media platform formerly known as Facebook would now be called Meta, the next digital he made a hyperpublic bet on the future of the frontier.
Since then, land sales in the Metaverse have climbed by seven figures, including a crypto property bought on Decentraland for US$2.4 million in November 2021 and another on Otherside for US$1.65 million in May. Did.
And now, in addition to billboards and burger shops for Avatar, housing is being built on these parcels.
They offer no shelter or a place to sleep. But they provide a place to gather and show off for those of us who are increasingly online.