From the explosion in NFT sales, the volatile swings in cryptocurrency prices, the widespread adoption of virtual reality technologies, and the first mentions of a “Metaverse,” 2022 has proven to be a key year in the emergence of the digital space. But no development has generated more media attention than the virtual land boom currently underway on various metaverse platforms.
One investor recently made headlines when they purchased a plot of land for $450,000 million in the virtual reality game The Sandbox. The reason – was they wanted to buy virtual real estate next to land owned by Snoop Dogg.
Almost no subject in recent times has been so widely covered in the media, and yet so little understood by the general public as that of land in the metaverse. In this article we’ll attempt to answer the questions – what is virtual land, why are people paying millions for it, and how do you buy it?
What is the Metaverse?
In order to understand the digital land craze, it’s vital to understand what the metaverse is. Simply put, a metaverse is any interactive, digital world where users can shop, buy, sell, play, or replicate their own physical experiences by creating an avatar.
Recently, investors were shocked when the social media giant Facebook announced they would be changing their name to Meta Platforms. The company’s rebranding is part of a larger plan to focus on developing its own metaverse product. As Mark Zuckerberg stated in his recent Founder’s Letter, “The defining quality of the metaverse will be a feeling of presence — like you are right there with another person or in another place.”
While the metaverse may sound like a confusing concept, the idea is simply the next step in the evolution of the internet. In the current internet business model, also known as Web 2.0, a select number of corporations control closed economies, where online gamers cannot monetize their investments and efforts outside the platform.
In the user-controlled metaverse, which has been dubbed Web 3.0, capital controls are eliminated. This allows users to own their digital assets, like non-fungible tokens (NFTs), and trade them with other players in-game. These assets can also be transferred to other digital experiences, creating an entirely new Internet economy that can be converted to real-world currency.
Although Meta Platforms’ ultimate metaverse product is still years away from completion, there exists a number of blockchain-based games that can be accurately defined as metaverse platforms. A major part of all of these closed-world ecosystems is virtual land, which players can buy and sell with in-game cryptocurrency.
Creating a Wallet
Keep in mind that to buy property in a virtual world it will be necessary to create a crypto wallet in order to buy the native tokens for each respective site. Once you create an account, you can connect your crypto wallet to make purchases.
Some of the best current wallets include Coinbase, Binance, and Metamask. In addition to holding your cryptocurrency, Coinbase and Binance also serve as exchanges where members can buy various digital coins.
Nearly all of the digital real estate you buy will be in the form of non-fungible tokens (NFTs), which are digital tokens on blockchain networks that represent proof of ownership. When an investor purchases a piece of a virtual land plot, the blockchain network powering the virtual world verifies the sale and transfers ownership.
Currently, there are three main games that offer players the opportunity to buy virtual land, all of which come in the form of NFTs. The three virtual worlds are Decentraland, The Sandbox, and Axie Infinity.
Founded in 2017 and built on the Ethereum blockchain, Decentraland is a virtual reality platform where players can buy and sell parcels of property called LAND. Those who own LAND can use the game’s tools to develop their property in any way they desire. Each plot of LAND is 16 square feet, and only 90,601 parcels are available.
MANA is the cryptocurrency that players must possess to pay for LAND, as well as other additional virtual goods and services. The coin has a supply of 2.2 billion, and there are currently 1.8 billion tokens in circulation.
To buy land in Decentraland, you can either navigate to the Decentraland marketplace or browse through a major NFT exchange such as OpenSea where Decentraland land plots are listed as NFTs. Currently, the cheapest land plot is listed for 4,779 MANA ($15,866).
The Sandbox (SAND)
Similar to Decentraland, The Sandbox is a digital world where players can build, own, and monetize their gaming experiences in the Ethereum blockchain using the SAND token.
Each piece of digital real estate (LAND) comes in the form of a unique, non-fungible ERC-721 token on the Ethereum blockchain. A total of 166,464 plots of LAND exist on the site, and each one can be accessed through a virtual map on the platforms’ official website, or on OpenSea’s NFT marketplace under The Sandbox collection.
The proximity of LANDs to large partners and other key positions plays a role in the gameplay, visitor counts, and economy of the games built on those LANDs. Because of this, certain LANDs fetch far more money in the market than others.
Currently, there are 878 land plots listed for sale, with the cheapest plot going for 3.85 ETH ($12,022).
Axie Infinity (AXS)
One of the most popular metaverse platforms in existence, Axie Infinity allows players to create and breed pets called Axies and compete with each other to earn rewards. Each Axie character is a non-fungible token, and they are often described as “fierce” and “adorable.” Each creature is a living, digital asset that can be bought or sold at any time.
Once created, Axies can be trained to fight against other players’ Axies or digital monsters to earn metaverse tokens called Axie Shards (AXS) and Secret Love Potion (SLP). While AXS is a governance token, SLP is directly involved with the gameplay and can be used for breeding new Axies.
Lunacia, the Axie homeland, is divided into 90,601 tokenized plots of land which act as bases of operation and homes for players and their Axies. These land plots are also represented as non-fungible tokens and can be freely traded by players.
Plots can be upgraded over time using a variety of resources, as well as ingredients that can be found when playing the game. Landholders also have the added perk of getting first rights to any resources that spawn on their land.
Currently, there are 878 plots of land listed on Axie’s land marketplace, with the cheapest selling for 2.7 ETH ($8,764).
Earth-like Virtual Land
In addition to the virtual environments found in the blockchain-based video games previously mentioned, there exists a class of virtual real estate not tethered to any native tokens. While this virtual property must be purchased with cryptocurrency, buyers cannot earn coins or rewards with it like in a video game. Instead, these assets exist on their own in a world that is mapped directly onto planet Earth.
Created in late 2019, Superworld is a virtual land platform mapped over the entire surface of the globe, allowing users to purchase any place on Earth. Each plot of land in SuperWorld measures 100m x 100m of real-world space, or about the size of a sports stadium, and each plot has a base price of 0.1 ETH.
One of the cool aspects of Superworld is that each piece of virtual land corresponds directly to a piece of physical land in the real world. Buying land in Times Square in New York City, for example, gives landowners ownership of all the historical landmarks and skyscrapers found in that area.
SuperWorld uses the ERC-721 standard of NFTs, meaning that each plot of virtual real estate is wholly unique and can be held as a collectible to buy, hold, trade, or sell land.
While the site is still in its infancy, buying virtual real estate on Superworld will allow you to become a stakeholder on the platform. Currently, owners can display their NFTs and other collectibles on their land plots. In the future, the Superworld will allow holders to share in revenue created on their virtual land from user activity, including In-game purchases, transactions, advertising, eCommerce, digital commerce, and gaming.
Keep in mind that there will be a gas fee when buying and selling on the site. This fee usually amounts to around $80 depending on the price of Ethereum at the time.
Another company that has mapped a digital world over the surface of the planet, Earth 2 is an exact replica of its namesake and is made up of millions of 10×10 meter tiles. After buying virtual real estate, owners have the option to generate jewels and e-ther, as well as deploy holobuildings (a type of virtual house). In the near future, players will be able to adjust landscapes, build houses, gather and process resources, and rent their properties out.
Eventually, Earth 2 plans to invite groups of entrepreneurs to build cities. These will serve as places visitors can access, explore, meet, and do business.
Allegations of Fraud
Despite the game’s relative popularity, investors in Earth 2 should be wary. The company has been plagued by allegations of fraud and mismanagement, with many members claiming they have had difficulty withdrawing funds from the site, and been forced to provide large amounts of personal data. While buying metaverse real estate will always have risks, investors buying virtual land on Earth 2 should take special care if they claim land.