Buying a house in the future investment of the metaverse or the speculative bubble?

It would be considered crazy if someone put millions of dollars into the virtual world in the last year. But is it true that the virtual world is home, more than a year after many companies, celebrities and professional organizations like PricewaterhouseCoopers joined the confounded ranks of “metaverse real estate speculators”? this?

Enter the entertainment industry and professional organizations one after another.

A few months ago, it was reported that many companies and celebrities were spending millions of dollars on real estate in the virtual world, causing public frustration.

JJ Lin introduces the Metaverse online real estate purchase.

Decentralized digital platform real estate prices have increased by 400% to 500% in the past few months, surrounded by many digital investment companies and celebrities. When calculated based on the value of an area, many numerical land values ​​are based on or above the average land value in a Tier 1 city in the United States.

Buying a home in the metaverse world typically uses the platform's own tokens, such as Sandbox's SAND token and Decentraland's MANA token. As the digital territory becomes more and more expensive, the value of the token itself also increases. At the beginning of March last year, the SAND exchange rate was only 25 cents, but at the end of last year, the SAND rose to $8.51.

The internal logic of metaverse real estate speculation

A closer look at the “thinking real estate” of the virtual world reveals that this explosion really does have its own set of assumptions.

First, the simplest logic behind the virtual real estate boom isPerspectives from the "Metaverse".

After Facebook changed its name to Meta, the popularity of the concept of "Metaverse" quickly burned out, and "Metaverse" was the next form of the Internet in the post-Internet world and in the wild for many people, and the growth potential is limitless. have been assessed accordingly

For example, Andrew Kiguel, CEO of digital investment firm Tokens.com, denies that "Metaverse is a continuation of advertising." Your business can grow to $1 trillion.

Other well-known consulting firms hold similar opinions. Bloomberg Business Research estimates the metaverse market to reach $800 billion by 2024, and PwC estimates the metaverse market to reach $1.5 trillion by 2030.

Although it is far from an immersive 360-degree digital world that meta dreams of despite the limits of technological development, the purchase of digital assets precedes "by nature" and "online" it can be considered as "A" means . Investing in the future".

Decentraland Exchange Hub

Second, like "thinking about real estate" in the real world, "thinking about real estate" in the virtual world depends on real estate."Non", and "rarity" is the biggest hype.

Currently, on the most popular "thinking real estate" virtual platform, digital real estate is limited, and the configuration itself is to ensure that virtual real estate is not too compromised.

For example, a total of 166,464 plots have been allocated on the Sandbox platform and a total of 90,601 plots on the Decentraland platform, of which only around 44,000 have been allocated for private sale. The new land opening must be voted on by all the treasurers and all the members of the platform. It's almost impossible.

Third, accommodation in the virtual world is available.functional value.

Real estate in the virtual world is not like real estate but it is free and investors can use it for business or rental purposes. For example, the acquisition of digital real estate by PricewaterhouseCoopers mentioned above is to establish a service center, and many well-known companies have purchased virtual real estate for the type of advertising on the Metaverse platform. .

Since the plans for the virtual platform are totally restricted, if in the future there are companies that still want to advertise in the virtual world after the sale of all the digital lands, they will have to rent the lands from the owners existing. The results may be beyond your imagination. Moreover, this situation does not seem far away. Currently, 70% of digital land is sold on the Sandbox platform.

It is for this reason that digital land, which is usually close to commercial areas and has highways, will cost more.

"Kung Fu Ice Room" by Sandbox World

Also, the cost of digital land around reputable families may be higher. For example, someone paid $450,000 to buy land next to rapper Snoopverse's virtual home to become a celebrity and neighbor.

How to make money on virtual real estate speculators

Generally, in the digital world, digital assets are bought and sold in the form of NFTs. In other words, buying virtual real estate is very easy compared to real estate. Directly on the platform or with the developer.

After buying the land, the virtual capital company treated it like the real world. Some projects were abandoned and sold until prices rose, and in some countries a real estate company hired a designer and a game development company to design. They build a house or a store and then sell it or collect rent. It is no different from a constructor.

In fact, the setup of some virtual real estate companies is starting to improve.For example, Republic Realm, the digital investment company mentioned above, spent 27.42 million yuan to buy Metaverse real estate and already owns about 2,500 digital real estate on 19 other Metaverse platforms, some of which have already started construction. . Projects the company is currently developing include retail stores that rent primarily for virtual stores and large community members of around 100 homes the company has built ready to sell retail stores to gamers.

Villas, malls, marinas and other works are currently being built on Republic Realm

Another digital trading company, Tokens.com, is currently developing an 18-story business in Decentraland with plans to lease it to cryptocurrency exchanges. And they bought another piece of land in the fashion district ready to be leased to a fashion company. According to the company's CEO, shopping for fashion in today's regional area is "like buying Fifth Avenue in the 19th century."

The risk of speculation in “metaverse real estate speculation” cannot be ignored

All of the above may sound glamorous, but it should be noted that we are in an ideal position to build a growing "metaverse" platform.In other words, if a "metaverse" platform loses traffic and interest, or if virtual profits fluctuate, it can affect the value of "virtual real estate" in the hands of investors and even lose everything.

Lack of control is also a major problem. Unlike the real estate industry with mature management responsibilities, the real estate industry on the Metaverse still faces many management shortcomings. For example, how to define the nature of metaverse ownership, how to protect metaverse ownership status, arbitrate when a dispute arises, etc. If there is no solution to these issues, the risk may is considered.

Janine Yorio, co-founder of Republic Realm, which specializes in metaverse real estate thinking, also acknowledges that investing in digital real estate is risky.

"(It's) very dangerous. You just have to invest the money you plan to lose it all. It's very desirable and always blockchain - as we all know, cryptocurrencies are not “, said Yolio. Fantastic. Stable, big You can pay. cash dividends.