Should we invest in real estate on the metaverse?

Today driven by the maturity of technology, the metaverse is structured. A virtual, immersive and 3D world in which we can travel, interact, consume, invest.

The metaverse, for whom, for what?

Many are interested in this new playground: from celebrities – Paris Hilton, Booba, Gimms – to tech investors including Mark Zuckerberg who has renamed his company Meta. Brands too: Ubisoft, Warner Music, Adidas, Gucci, Carrefour, Axa… There are no less than 170 brands present on The Sandbox platform, attracted by the opportunity of innovative marketing operations, new potential revenues, or more. simply to be at the heart of an emerging trend.

So what about the virtual real estate market? Certain universes such as The Sandbox, Decentraland, Somnium Space, Worldwide Webb, and Cryptovoxels, lend themselves more specifically to real estate investing. Whether it is the sale or rental of land, buildings, shops, shopping centers or art galleries, the possibilities are identical to the real world. We can imagine the interest of an investment where we can buy, build, rent, resell our virtual property.

In the golden triangle of some metaverses, prices are already in the millions. First record on The Sandbox, where Republic Realm, an American real estate company, acquired land in December 2021 for the sum of 4.3 million US dollars (3.8 million euros). The properties around Snoop Doog’s “Mansion” have been valued at 458,000 US dollars (404,000 euros). Another speculative maneuver, the Sotck exchange of New York sold for 23,000 dollars (22,500 euros) to an investor attracted by a potential capital gain.

How to invest in the metaverse?

The digital economy is essentially based on three technologies:

  • The cryptocurrencies, digital currencies that allow the purchase of goods or services. Their encryption ensures the security of the transaction and their operation, based in particular on the blockchainguarantees independence from financial institutions.
  • The blockchain, an independent, transparent and secure information storage, transmission and sharing technology.
  • NFTs (non-fungible token), non-fungible tokens, i.e. unique and non-interchangeable digital assets, such as a work of art, whose market value fluctuates.

Once the portfolio (“wallet”) of crypto currencies has been constituted thanks to specialized platforms, it is possible to buy land or virtual plots via the NFT system. These “certified” digital lands, because registered in the blockchain in the form of unique cryptographic tokens, confer an inalienable right of ownership.

Investing in virtual real estate, is it profitable?

As in the real world, the value of land is linked to its location and rarity. Currently, the supply of plots in the Decentraland and The Sandbox metaverses is limited, 90,000 for Decentraland, around 160,000 for The Sandbox. Depending on their success, their numbers could increase. Logically, the stronger the demand, the higher the prices rise. The closer the plots are to centers of attraction, major brands or celebrities, the more expensive they are, thus opening the way to speculation.

Another criterion to take into account: the attractiveness of the metaverse itself. Depending on the coast of it, the value of the property could increase or devalue. Today, it is almost impossible to predict the future of this new technology, which is still largely at the experimental stage. The sustainability of the metaverse will depend on the quality of the experiences that will be offered by the brands, their ability to create and retain users and the revenue they will generate.

Metaverse, eldorado or mirage?

If real estate investment in the metaverse seems attractive, like any virtual space, it raises a lot of uncertainty. The evolution of the price of a virtual property does not offer any guarantee and can quickly lose all its value. Faced with the current price surge, some investors are warning about the risk of losses that could result from a speculative bubble, like that of the 2000s.

So, in the meantime, investing in “real” stone remains one of the safest and most profitable investments!

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Should we invest in real estate on the metaverse?


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