What’s the metaverse?
While many have differing opinions on what the metaverse entails, most agree that it involves blending the physical and virtual worlds. Using technologies like virtual reality (VR) and augmented reality (AR), the metaverse can provide a more immersive real-time digital experience.
The metaverse gained significant traction in the tech world when Facebook's CEO Mark Zuckerburg changed the company's name to Meta. This marked the first time a prominent Silicon Valley company openly endorsed the metaverse.
Although often associated with open-world video games, the metaverse serves many other fields. For instance, Johnson & Johnson opened metaverse-enabled "Innovation Rooms" in Mexico to help medical students practice surgical procedures with VR. Many companies like J.P. Morgan, KuCoin, and Vice Media have virtual offices for employees.
Someday, it may be possible to seamlessly interact with multiple metaverse platforms. As it stands today, "metaverses" exist as separate experiences, and most are in the video game industry.
While metaverse projects aren't always associated with cryptocurrencies, many influential metaverses are on blockchains. Games like The Sandbox and Decentraland use many Web3 innovations like play-to-earn gaming (P2E), decentralized autonomous organizations (DAOs), and NFTs (non-fungible tokens).
What’s metaverse property?
Metaverse property is any plot of virtual land available for purchase on a metaverse platform. Many crypto-related metaverses have detailed maps with land parcels that users can trade on the open market.
These virtual deeds sell as land NFTs. Since NFTs are non-duplicable tokens on smart contract blockchains, everyone can see who owns what metaverse territory at any given time. For instance, if you purchase a land NFT in the Ethereum-based game Decentraland, you’ll see your land NFT associated with your wallet address on Etherscan.
Once you own a land NFT, you're free to develop your virtual land parcel. Some landowners build mansions, museums, or theaters on their lands.
Sometimes, metaverses have unique items, accessories, or resources that are discovered later by owners. For example, the land NFTs in Yuga Labs' "Otherside" potentially have in-game resources or rare NFT characters known as Kodas. Usually, landowners discover these later.
Requirements to buy metaverse digital real estate
Here are three steps that you’ll need to follow before researching land in different metaverses:
1. Download a crypto wallet
First, you'll need to download a crypto wallet that's compatible with whichever metaverse you're interested in. Use this wallet to both purchase and store your land NFTs.
Currently, MetaMask is one of the most downloaded software wallets used in NFT collecting. In addition to Ethereum (ETH), MetaMask works on blockchains like Polygon, the BNB Smart Chain, and Avalanche. With millions of downloads, MetaMask remains one of the most widely accepted digital wallets in Web3.
However, many competing ETH-compatible wallets like the Coinbase Wallet and Rainbow Wallet offer similar features to MetaMask. Also, if you're using competing blockchains like Tezos, Solana, or Cardano, you'll need to look into crypto wallets designed for these chains.
Whichever crypto wallet you download, write the seed phrase during setup. Also called "private keys," this seed phrase is the only way to recover crypto and NFTs on your wallet if you have to re-download it on a new device. And remember to always keep the seed phrase in a secure place.
2. Create a crypto exchange account
You can't buy metaverse land on centralized crypto exchanges (CEXs), but most NFT markets offering virtual land require crypto payments. The easiest way to convert fiat currency to crypto is to use a well-established CEX like Binance, Coinbase, or Gemini. Once you purchase crypto on your preferred exchange, you can send it to your crypto wallet.
3. Purchase cryptocurrencies associated with your metaverse
Before signing up for a CEX, double-check that it offers the cryptocurrencies you need to buy land in your metaverse. Also, remember that NFT websites charge gas fees, so you'll need the native cryptocurrency for whatever blockchain you use.
For example, if you're purchasing an NFT on Ethereum, you'll need some ETH to verify a transaction.
How to choose a piece of land on the metaverse
Picking the "best" metaverse land will depend on how you feel about the project you're investing in. Since metaverse land is a new concept, it's impossible to say which platform will rise in value in the upcoming years. It depends on how you estimate the metaverse’s future.
The safest bet is to focus on metaverses that already have a solid user base and connections with major brands and celebrities. Currently, Decentraland and The Sandbox are two of the largest metaverse projects, and both have partnerships with many global corporations. Plus, both Decentraland and The Sandbox offer landowners the option to rent their land for potential passive income.
Yuga Labs' Otherside metaverse consistently has the most active trading activity for its land NFTs. Although Otherside is yet to be released, many believe this game will be influential due to the success of Yuga Labs' Bored Ape Yacht Club (BAYC) NFTs.
While Decentraland, The Sandbox, and Otherside are some of the most prominent land NFTs, there's no telling how these titles will perform in the future. There are hundreds of other promising metaverses. Unfortunately, there have been many scam crypto metaverses like 2021's fake Squid Game project.
When searching for a metaverse to invest in, start on sites like CoinMarketCap and CoinGecko. Both of these coin price aggregators have a metaverse tab that shows the top-performing metaverse tokens. You can use this as a starting base to explore the many options in the metaverse land sector.
How to buy real estate in the metaverse
There are two places where you can buy metaverse land. You can either purchase virtual land directly on a metaverse's NFT market or buy land NFTs on a reputable secondary NFT website like OpenSea, Magic Eden, or Rarible.
Either way, you'll need to link your crypto wallet to the NFT market to make a purchase. When you find a land plot you want, you can bid, make an offer, or buy the NFT outright. Your wallet will ask you to pay for the NFT and any associated gas fees with crypto. Once you confirm this payment, you should see the land NFT in your wallet.
Why are investors buying land in the metaverse?
Spending thousands on virtual real estate may seem crazy, but investors often list the following reasons to justify their acquisitions:
- Access to online advertising space: The more time investors spend on metaverse apps, the more valuable ad space should be in these platforms. Whether they want to promote their own business or lease space to other companies, ad revenue could be lucrative in high-profile metaverse games.
- Novel passive income stream: Besides advertising, metaverse landowners use creative ways to earn passive income on their properties, like renting the property for events. For instance, The Sandbox and Decentraland let landowners rent their property to other gamers.
- High-risk investment with high-growth potential: Metaverse real estate is one of the newest investment categories, which means it has more room to grow. Players who believe in the potential of a game might see higher returns than investing in less speculative (but less risky) assets.
What are the risks of buying metaverse land?
Metaverse land NFTs are arguably the riskiest assets in cryptocurrency. Although many notable institutions like Fidelity and J.P. Morgan have properties on platforms like Decentraland, analysts aren’t sure about how to appraise the value of virtual real estate. It's also unknown which crypto metaverses will be the most successful. Many crypto metaverses are still under development, which means thousands of land NFTs are purely trading on speculation.
Remember that metaverse land NFTs and cryptocurrencies can be scams. The best practice is to carefully research metaverses on trusted crypto news sites like CoinTelegraph, CoinDesk, and CoinMarketCap.
While metaverse land NFTs can be lucrative, they can be worthless. If you’re thinking about purchasing metaverse real estate, consider these NFTs as a high-risk investment.
Wrapping up
While metaverse games are fun and exciting, they're a highly speculative segment of the volatile crypto market.
At Worldcoin, we aim to make everyone aware of the advantages and disadvantages of crypto and its associated fields. We want more people to see the value of cryptocurrencies in the "real world." That's why we're committed to teaching and sending crypto to as many people as possible. For more details on our project, subscribe to Worldcoin’s YouTube channel.
