The IRL housing market is predicted to remain tepid in 2023 but what about the metaverse real estate world. In the bull run, metaverse real estate was hot and speculators snatched up land in Decentraland, The Sandbox, Voxels and more in hopes that the real estate would appreciate in value in the coming years, and often it did.
But assets in the metaverse do not perform exactly the same as assets in real life. Real world assets like land can be bought and sat on for a time and the long-term value should theoretically increase. The missing factor with metaverse real estate is the platform is first and foremost a game. If land is bought and not developed, the game ultimately suffers because the players perceive a platform with limited use cases when they enter the realm. Not only that, technology changes so quickly, if the platform doesn’t continually upgrade and evolve, the land bought as a speculation asset, may soon become obsolete.
Still, a lot of money has been made speculating on metaverse real estate. But who should be buying this land? Simple real estate speculators may want to think twice. Investing in land on a platform that you have no intention of building on, may actually hurt your investment in the long term. When an investor buys land that they don’t intend to build on they have just committed to holding back the platform’s growth in some ways, but how?
stifled growth in Decentraland?
While the management and exposure of Decentraland is unparalleled there is currently a land crisis. More than 90,000 plots of land are held by only 6,000 addresses. The land is too concentrated, most of which is in the hands of investors and flippers, sitting and waiting for the land to appreciate. Land speculation has stifled content construction, content creation, and platform development of the metaverse. Decentraland is one of the most well-known metaverse projects and if landowners want to see their assets appreciate, now is the time to start investing in metaverse builders, not more land. If landowners would start developing experiences, stores, and visually appealing sites, the entire experience of the platform would improve, and the value of these assets would eventually increase. Multiversedao.org is one platform that has taken the open-source code of Decentraland and made a parallel world. They give out land for free. The caveat, owners must build on the land in order to be able to sell it in the future.
Play Nice or Get Out of The SandBox
The Sandbox is another top player in the metaverse ecosystem. As a play-to-earn world, players can own, build, and monetize virtual assets and gaming experiences. Snoop Dogg, Atari, and Deadmaus5 have all invested and built in the platform. Out of the 166,464 pieces of LAND, The Sandbox holds 16,704 to host special in-game events, and 25,920 LANDs are held in reserve for The Sandbox’s partners, creators and the like. This means that 123,840 LANDs were available for purchase by the public. Land can also be staked to generate passive income which makes this land slightly more viable as a speculative asset. Location is king as in other platforms. Land bought around large players like Snoop Dogg is valued significantly higher than land bought elsewhere. Partnerships seem to be one deciding factor to consider when investing in metaverse land. Since Sandbox is an Animoca brand company, partnerships will be in abundance. Ultimately, it is still important to remember that like other platforms, the Sandbox is a creator economy. If landowners have no interest in creating anything on their land, they may be holding back the development of the platform.
the platform Formerly Known as CryptoVoxels
Formerly known as CryptoVoxels, Voxels has been around for about four years. The name change was meant to distance itself from crypto and make it more approachable to the masses. While previously the land cap was unknown, the founder Ben Nolan announced there will be a maximum of 70K parcels adding scarcity to the asset. Renting, token gated access, gamification and more have been added features of late that make the land more valuable. Like Decentraland and Sandbox, location is key and spots near lots of activity and experiences or big brands come at a premium. And like the other platforms, it is important to build in order to improve on the community experience.
A common complaint for many metaverse platforms is the lack of users at any given time. If a player jumps in at any random moment, they are likely not going to see much activity and it is best to join during scheduled events. These platforms are still new and developing and having a thriving metropolis will take time. If land speculators start to take on the role of developers, this could bring about rapid change. Most platforms offer simple tools to help build out plots and create basic experiences that showcase the value of the land. Similar to staging for IRL real estate, staging your lot could help other buyers see the potential of your real estate listing. This in turn could improve the metaverse experience and the potential of the platform you’ve invested in.
Opinions expressed here are opinions of the Author. Influencive does not endorse or review brands mentioned; does not and cannot investigate relationships with brands, products, and people mentioned and is up to the Author to disclose. Accounts and articles may be professional fee-based.