A New Frontier of Web3: NFT Real Estate in the Metaverse
a LCX Team · December 8, 2022
Have you ever wondered how a single event can cause massive shifts that drive hundreds of millions into a sector? Welcome to the Crypto space. It’s been more than a year since the NFTs took the art world and crypto space by storm triggered by an event of $69 Million NFT sale. NFTs became an overnight sensation when an NFT known as Everydays: The First 5000 Days by artist Mike “Beeple” Winkelmann sold for more than $69 million at a Christie’s auction. As a ripple effect, other NFT arts also took an upward trajectory, and even NFT of tweets started fetching seven-figure bids. Over $85 million worth of NFT artworks were sold in March 2021 alone.
The same happened with the Metaverse sector when Facebook’s rebranding to “Meta” piqued the interest in Metaverse-based crypto projects, and they witnessed crazy multifold growth in their Market Cap. The Metaverse wave continued to fuel the development of the sector, where a virtual property plot in the virtual world ‘Decentraland’ was sold for a record amount of $2.4 million, and 27 million people attended Travis Scott’s Fortnite concert. The Metaverse and NFT are now the next big thing in crypto and across industries.
Humans are social animals, and we have been using different mediums for interacting with each other. The creation of the internet fundamentally altered how we interact with each other. With web1, it liberalized access to information. With web2, we allowed access to instant high fidelity 2-way simultaneous instant communication, and Web3 is here to transform it for the better, a decentralized, immersive, and user-owned version of Web, breaking the monopoly of giants, it gives back control to users. The arrival of Web3 brings blockchain, NFTs, DeFi, Metaverse, and much more to the world.
State of Virtual Land NFTs in Metaverse
Virtual worlds are now becoming the norm, increasing interest in virtual assets, events, NFTs, and even virtual real-estates. Chainalysis’s recent report, State of Web3, highlights that the adoption of Metaverse has impacted the price of virtual property. The cost of blockchain-based virtual real estate increased by 879% from September 2019 through March 2022, while the price of real estate increased by 39%.
There is already a growing number of celebrities and brands purchasing land in the metaverse. US Hip Hop Superstar Snoop Dogg debuted on the Metaverse after launching his own Snoop Dogg Metaverse Experience on The Sandbox. Approximately $450,000 has been paid by one user to become Snoop Dogg’s meta-neighbor. Similarly, Paris Hilton has created a virtual island, Paris World, in the virtual world. Adidas has also acquired space in the virtual world to host its own metaverse experience. Users can interact with brands and companies via metaverse services, games, and products, in addition to joining in the hype of the metaverse and NFT.
Recently, the Plein Group purchased land on the Decentraland metaverse for approximately $1.4 million (about). About 150,000 square feet of real estate was transferred for 65 Decentarland parcels. The land is planned to be developed into an art museum, a hotel, and a shopping mall. According to CNBC, the price of virtual land has increased by 500% since last summer.
According to the Real Estate in the Metaverse report by CFTE, Sandbox has the biggest transaction volume, with 65,000 transactions totaling $350 million in 2021. Decentraland, the second largest marketplace, had nearly 21,000 transactions accounting for $110 million.
Real estate in the Metaverse has recently attracted the attention of institutional investors. The Metaverse Group has also invested heavily in digital real estate, even having set up a virtual office in Crypto Valley in Decentraland. In December 2021, PwC also purchased plots in Decentraland to provide advisory services on web 3.0.
The King of NFT Land Mafia: The Sandbox
As of 2018, Sandbox has evolved from a standard video game into a fully 3D environment following the company’s acquisition by Animoca Brands. With the addition of blockchain to its structure, Sandbox entered the crypto world.
The Sandbox is a blockchain-based decentralized platform that offers creators and players all the benefits of digital goods and gaming experiences.
A number of large brands and famous individuals have purchased real estate in Sandbox over the last two years to develop experiences and experiment with new marketing strategies, including Snoop Dogg, the Smurfs, Atari, the South China Morning Post, and the Winklevoss twins. The Sandbox has an extremely high awareness and interest among the general public. The Sandbox is still in the early stages of development, with only 500,000 accounts created on the platform since the Alpha Session in November 2021.
The Finishing Touch
BrandEssence Market Research predicts the metaverse real estate market will grow at a compound annual rate of 31% between 2022 and 2028, reaching $1 billion.
There is no doubt that the metaverse is the future. The real-world utility is now offered by virtual real estate, VR technology is getting closer to reality, and blockchains give meaning to digital ownership.
There is a lot that web3 promises when you look beneath the buzzwords of decentralization, a more connected, immersive, and visually engaging web. We’ve moved from blogs to social media platforms to the metaverse, where we’re talking about VR and AR worlds based on 3D worlds.
