December 5, 2021
Virtual land valued at over $ 100 million has been sold across the four main Metaverse sites. PHOTO: Getty Images / Illustration
The idea of ââspending millions on land that only exists on the internet may sound ludicrous, but the fury over the metaverse, a future of virtual reality, encourage some investors to buy digital real estate.
This week, the New York company Kingdom of the Republic announced a $ 4.3 million transaction to purchase digital land at The sandbox, one of many âvirtual worldsâ websites where people can socialize, play games or go to concerts.
At the end of November, the Canadian cryptocurrency firm Tokens.com had acquired land in the rival platform for $ 2.4 million, Decentraland.
A few days earlier, Barbados had announced its intention to open a âmetaverse embassyâ in Decentraland.
These types of portals are presented as prototypes of the metaverse, a internet of the future where current online experiences, like talking to a friend, will feel like a face-to-face thanks to virtual reality devices.
Word “metaverse“Has been very popular in Silicon Valley for months, but interest multiplied in October when the parent company of Facebook renamed “MetaâIn its strategy of betting on virtual reality.
The name change of Facebook “Introduces the term”metaverse“To millions of people much faster than I ever imagined”, says Cathy Hackl, technology consultancy that advises companies to enter the metaverse.
Data website Dapp collects that, last week, virtual land valued at over $ 100 million was sold at the four main sites of the metaverse: The Sandbox, Decentraland, CryptoVoxels and Somnium Space.
Hackl is not surprised by this boom, which is accompanied by the development of an entire digital real estate ecosystem, from developers to rentals.
âWe are trying to transfer the way we understand physical goods to the virtual world. “
Cathy Hackl, technology consulting
And although it will take some time for these websites to work like real metaverse, your digital terrain is already functioning as a real asset.
âIt can be built on it, it can be rented, it can be sold. “
Cathy Hackl, technology consulting
The fifth avenue
Tokens.com bought an excellent piece of land in the neighborhood of Calle de la Decentralized mode, which the platform wishes to promote as the headquarters of the virtual shops of luxury brands.
âIf I hadn’t researched and understood that this is a valuable property, that would sound absolutely insane,â admits Andrew Kiguel, CEO of Tokens.com.
For him, who spent 20 years in the investment bank focused on real estate, the Decentraland operation is governed by the same criteria as in real life: it is a trendy and lively district.
“It’s a space for advertising and events where people are going to come together,” he said, using a recent music festival on the platform that drew 50,000 spectators as an example.
Luxury brands are starting to enter this parallel world: a virtual Gucci bag was sold on the Roblox platform in May at a higher price than the real version.
Kiguel hopes that Fashion Street will become something of Fifth Avenue from New York.
Your land can earn you money as advertising space or even “have a store with a real employee,” he explains.
âYou can walk in with your avatar and have digital 3D representations of a shoe that you can hold, and ask questions,â he said.
A little absurd
In 2006, a real estate developer hit the headlines after earning $ 1 million with virtual land sold in the famous Second life. But there is one essential difference between this still active platform and those of the new generation.
At Decentraland, Everything from earth to virtual artwork comes in the form of non-consumable tokens (NFTs). Some people have spent tens of thousands of dollars on these digital items which have generated skepticism and excitement.
Kiguel predicts that this form of digital ownership will be very widespread in the years to come, as the ‘blockchain’ technology behind it creates trust and transparency in transactions.
âI can see the history of the property, how much was paid for it and how it was transferred,â he says.
But it is not a risk-free investment, in particular because of the volatility of the cryptocurrencies used to buy NFT and because the value of these investments depends on the number of users of these platforms, for the moment far from ‘to be Facebook oh Instagram.
âIt all seems a bit absurd,â admits Kiguel. “But there is a vision behind it.”