Been slaving way to buy your first property? Well, here’s news for you—we might soon have to worry about buying virtual real estate, too.
Mandopop singer JJ Lin recently spent $120,000 on digital property in Decentraland, which is the first fully decentralised world on the metaverse—in other words, it’s a freaking virtual world. The amount he spent on his virtual property could buy you a decent apartment in some cities (not ours, sadly).
So, what the heck are metaverse properties, really, and are they something we should worry about buying anytime soon?
What is a metaverse?
First coined in science fiction novel Snow Crash by scifi writer Neal Stephenson, the metaverse was originally conceived as a virtual world in which human beings used avatars to interact with each other. People could socialise, shop, gain social status in the metaverse and so on.
Today, the term metaverse is used to refer to virtual worlds which can be explored and inhabited using VR or augmented reality technology. In practice, there isn’t one specific metaverse but many. For instance, the universes of some video games like Fortnite and Minecraft are considered quasi- or full-fledged metaverses.
Facebook’s rebranding as Meta is a gamble that they can create their own metaverse and that mainstream society will be ready to adopt it within this decade. If they succeed, we could find ourselves browsing businesses’ spaces with VR goggles on and experiencing in 3D the kids of ex-classmates whom we haven’t seen in 10 years… the horror.
Why are investors snapping up metaverse properties?
Many of the richest men on this island are property developers who made it big by snapping up real estate when Singapore was still an inexpensive developing country. As the country developed, their property values shot up and so did their bank account balances/egos.
Investors are hoping the same thing will happen in the metaverse and that there will be a property boom as it develops. Just like landlords in real life, they hope these properties will bring them future profits, turning them into virtual tycoons or at least letting them sell their properties for a tidy sum.
But what can you do with metaverse property once you’ve spent good money on it? Metaverse land manifests as digital spaces on certain platforms, including Decentraland, where JJ Lin bought his. In the typical metaverse, you can explore, build, shop, play games and socialise with avatars, just like in Second Life. Having land lets you build a virtual home in that metaverse, and do much of the stuff you would in a regular home—but virtually, of course.
You can also monetise your property by renting it out or eventually selling it at a higher price. To be fair, there aren’t a lot of people looking for virtual rental properties right now, but there might be eventually if the metaverse develops sufficiently.
Metaverse properties are purchased as non-fungible tokens (NFTs), which function as a title deed for the property. NFTs are unique units of data on a blockchain that record your ownership of the virtual land and prove that you own it.
There’s only one meta “real estate company”
Metaverse Property purports to be the world’s first virtual real estate company, and is buying and selling property across metaverses. It is also developing virtual land, facilitating rentals and managing existing property.
But just as you don’t technically need to use a property agent when you buy and sell property in the real world, you can bypass Metaverse Property altogether by buying directly on OpenSea.
Otherwise, buy from OpenSea
OpenSea.io is where people go to buy and sell NFTs. These now include NFTs for virtual property.
On OpenSea, you can search for NFTs being sold or auctioned, or make an offer for NFTs that you have your eye on in case the seller decides to let them go.
Supports 5 major metaverses
The definition of metaverse is still in flux. Many games have already been deemed metaverses to some degree, including children’s mobile game Roblox.
At the moment, there are several major metaverses where property is being bought and sold, all of which are supported by Metaverse Properties. These are Decentraland, The Sandbox, Somnium Space, Cryptovoxels and Upland.
How much does it cost to buy/rent a metaverse property?
Just like in the real world, metaverse properties prices are determined by supply, demand and factors such as individual sellers’ circumstances.
At the moment, you can expect to shell out the equivalent of a few thousand dollars for a simple plot in Decentraland. As with all things in the crypto world, property prices are volatile.
Here are some recent high profile metaverse property transactions:
|Fashion Street Estate, Decentraland (116 plot land parcel)||2.4 million USD (618,000 MANA)|
|Axie Infinity Genesis (1 plot)||2.23 million USD (550 WWFTH)|
|Book Local, Decentraland||1.08 million USD (210,000 MANA)|
So, how to buy a metaverse property?
To buy NFTs on OpenSea, the first thing you’ll need to do is open a crypto wallet so you have somewhere to put your digital assets.
Next, sign up for an account with OpenSea, pair your account with a compatible wallet (eg. MetaMask, TrustWallet) and transfer your metaverse tokens over. Make sure you check withdrawal fees before making any transfers so you know what amount would be most cost-effective.
Is it worth buying or investing in metaverse property?
Whether the metaverse will take off is anybody’s guess, but Facebook certainly seems to think so. If it does, early adopters who buy metaverse property at this stage of development could find themselves sitting on a goldmine.
You certainly shouldn’t plough your life savings into metaverse property, as the risks are also high that it will become worthless in future. There’s also the question of which metaverse to buy in, as the value of your property will largely be determined by the future popularity of the metaverse it resides in.
If you have cash that you can afford to lose and have a high risk appetite, you can consider buying yourself a slice of a carefully-chosen metaverse. Even if you’re skeptical about the long-term future of the metaverse, you might be able to flip your property for a short-term profit before the bubble bursts. Just be aware that you’ll be taking a big gamble.
Ready to dive into the wacky world of crypto and the metaverse? Start your crypto investing journey by signing up with the best crypto exchanges on MoneySmart.