NFT trading volume zoomed past $10.6 billion in the third quarter of 2021, with more people willing to pay exorbitant prices for art that they can’t hang on their walls and real estate that they’ll never be able to walk on.
Art isn’t the only asset that’s breaking sales records: virtual land is hot now, too.
Tokens.com, a Canadian investment firm focused on crypto assets, announced recently that it had completed the “largest metaverse land acquisition in history” via its subsidiary Metaverse Group, who boast a digital real estate portfolio worth millions of real dollars.
The land was acquired in 116 parts, each comparable to 52.5 square feet, for a total of 6,090 square feet. That’s slightly larger than a full-size basketball court (which is 4,700 square feet). In short, it’s not much space, especially for $2.4 million. So what’s the deal?
People and businesses are betting on life becoming more digital and the much-hyped, little-understood metaverse taking off; virtual land is becoming as much of an investment as physical land, and if current trends continue, may pay off handsomely for early adopters.
This was a trend already in motion but the Covid pandemic has accelerated it exponentially.
Metaverse Group carefully selected its plot of land and understands exactly what it will be used for; positioned in Decentraland’s Fashion Street sector, the space will be utilized “to facilitate fashion displays and commerce within the expanding digital fashion industry.”
What Is Decentraland?
Decentraland is a decentralized virtual environment built on the Ethereum blockchain. “The people who use Decentraland own Decentraland,” said Dave Carr, the platform’s communications head. “We have a decentralized autonomous organization in which people can submit recommendations and vote on other people’s proposals [which] effectively decides Decentraland’s future course.”
Facebook, now Meta, wants to command the future metaverse, yet it appears that people will gravitate toward platforms like Decentraland precisely because they are neither owned nor controlled by a centralized authority.
Trust isn’t exactly the first thing that comes to mind when many people think of Facebook. And so far, the awkwardly-timed rebrand to Meta, hasn’t changed many minds. If anything, it has raised suspicions.
On the other hand, Decentraland’s emphasis on autonomy and the absence of a single authoritative decision-maker may be just what the denizens virtual worlds are yearning for.
Nike and Adidas: All In
Users of the platform can create avatars, purchase real estate, play games, buy wearables, and attend events. Nike and Adidas already have plans for virtual stores and other brands are snapping up digital space as well.
MANA is an Ethereum-based token that serves as Decentraland’s native cryptocurrency, and its value reached an all-time high last week, surpassing $9.2 billion in market capitalization. The land acquisition by Metaverse Group was paid for with 618,000 MANA, which equaled to around $2.43 million at the time of sale.
It was the largest money ever spent on a parcel of virtual land until yesterday, when virtual real estate company Republic Realm paid $4.3 million for a piece of property in The Sandbox, another decentralized virtual environment. Other than “developing,” Republic Realm has not stated what it intends to do with the area.
Meanwhile, Metaverse Group is confident that its own land investment will pay off. The startup intends to collaborate with established fashion labels to curate fashion projects and events on its virtual domain. “Fashion is the next huge area for growth in the metaverse,” said Decentraland’s head of content, Sam Hamilton.
It’s an unusual time to be focusing on fashion, given that the pandemic has rendered most of us incapable of caring or recognizing what we wear and how we appear on a daily basis. Brick-and-mortar stores and malls have suffered as a result, with shoppers either foregoing new clothes or shoes entirely (since who needs ’em when you’re not going anywhere?) or shopping online.
Does the thought of corporations spending millions of dollars on virtual property where digital avatars can attend virtual fashion shows and purchase branded NFTs still sound insane? I understand. However, it appears that we are on the verge of a future in which more of the items in our lives will have digital analogues. Maybe it’ll all work out, or maybe we’re on our way to a Ready Player One–style society where the best things in life don’t exist in real life—only digitally.
Decentralized or not, the metaverse will continue to evolve rapidly, if recent events are any indication. “Early investors will want content added to their property because they have a vested stake in the virtual worlds in which they purchase the land,” Carr said. “It draws individuals into the virtual environment and…enhances the experience.”
It is akin to playing a metaverse version of “Monopoly”, only with real money.
Jay Speakman is a technology writer based in San Francisco, California. He writes on the topics of blockchain, cryptocurrency, DeFi and other disruptive technologies. Clients include Avalanche, Be[in]Crypto, Trust Machines and several blogs devoted to blockchain gaming. He will not rest until fiat currency is defeated.