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The metaverse, whose existence millions of people still ignore and which many others dismiss as a mere virtual game, is already generating millions of dollars through a market in which land that doesn’t exist in the real world is traded.
According to investment and analytics firm MetaMetric Solutions, property sales on the four major metaverse platforms that engage in these transactions reached $501 million in 2021 and by 2022 the figure is expected to escalate to $1 billion.
The investments are getting bigger and projects more eye-catching. Republic Realm, a company that invests and develops assets in the virtual world, caught attention when it paid $4.3 million for a piece of land purchased on Sandbox —the real estate platform with the highest turnover in the metaverse— to develop a project called Fantasy Islands, which offers 100 islands, with their luxurious mansions and all the items a millionaire would like to have. About 90 of those islands sold on the first day they went on sale for $15,000 each and several of those properties are already available for resale for more than $100,000.
The market for real estate in the virtual world, though unknown to most people, has already caught the attention of major investors, millionaires and artists who don’t want to be late to the birth of what for some is the future. Snoop Dogg is one of the artists who already have his land in the metaverse, in fact, recently someone paid $450,000 to become a neighbor of the famous rapper who has created a “Snoopverse” in a land where he built a replica of his mansion in real life and where he plans to give concerts and hold events. According to MetaMetric Solution, in January alone, land sales in the metaverse exceeded $85 million dollars.
The reasons to invest in the metaverse
Perhaps the simplest way to understand the future of the metaverse is to understand it as the next step after social networks and communication applications, but beyond that, companies that are investing heavily in its development see it as the next generation of the Internet.
While by Zoom or any other type of video call you can talk to your friends, in the metaverse you can invite your friends to your virtual home, travel to any country, play, work or simply go to a bar where there are dozens of avatars and enjoy dancing.
But the metaverse is not only a tempting scenario for fun and meetings with friends, it is a platform that, according to its developers, will change the way we do business and work. Facebook is allowing more and more employees to work from home, even on other continents, and to meet virtually. Mark Zuckerberg is doing it first himself, with his company, to show the world what the metaverse brings to the future of work.
Imagine what it would mean for millions of companies to not just hire people from a specific country, but to be open to human talent from around the world. And how much money companies would save if they didn’t have to keep their workers in buildings and pay for all the expenses that maintenance entails.
For some, these developments may never become widespread, because they believe that relating to the real world is absolutely necessary, but for others the world will advance to a state where even the most conservative scenario would be a hybrid approach where to some extent everyone will be part of the metaverse
Why pay millions for a property that doesn’t exist?
There are two basic reasons why someone might want a property in the metaverse, the first is because they enjoy interacting with other people through virtual reality and just as we want someone to visit our website or our social networks, many want to show their friends their space in the virtual world. A place where we can accumulate the objects that we like and that we have bought in virtual reality, so that instead of going to a public space we can invite whoever we want to enter a place that is ours and that shows our personality.
But in addition to the attraction of having a private space, there is also the possibility of investing. There are already large investors from different sectors buying properties and developing projects. For example, Tokens.com CEO Andrew Kiguel has announced plans to develop a fashion complex where he will host events and showcase the work of retail stores. Kiguel recently spent $2.4 million on land located in the Decentraland fashion district and secured a $16 million fund to invest in real estate in the metaverse.
The metaverse looks like it will be a huge opportunity for anyone looking to advertise in an eye-catching environment. It’s not just about selling products for virtual reality, such as accessories for our avatar or our virtual home, but also in the metaverse, you can sell and test products that we will use in real life. Even if it’s not about a business or wanting to sell a product, for many today it is a good investment to buy a property in a market that is just developing and that according to some of today’s brightest minds will be the future of the internet.
Needless to say, even though it is so flashy and has been growing so much in recent months, it is a risky investment. Like any new product, there is still no guarantee that it will be successful and sustainable over time. However, whatever position you take on the metaverse, it is undeniable that its developers are creating something completely new, which for those of us who enjoy virtual reality opens up a universe of possibilities.
Vanessa Vallejo. Co-editor-in-chief of El American. Economist. Podcaster. Political and economic analysis of America. Colombian exile in the United States // Vanessa Vallejo. Co-editora en jefe de El American. Economista. Podcaster. Análisis político y económico de América. Colombiana exiliada en EE. UU.