Virtual reality is evolving faster than ever in terms of availability and sophistication, creating new markets with previously unknown business opportunities. Example? The investment volume in the global real estate market was approximately $3.38 trillion in 2021. So it’s no surprise that the metaverse is starting to build digital estates. Will agencies see them as a lucrative investment?
Metaverse is revolutionizing digital reality before our eyes, especially since Mark Zuckerberg changed the name Fecebook to Meta in October last year and announced that he would spend at least $10 billion on creating augmented virtual reality by the end of 2021. Zuckerberg was followed by many others, from software leaders to movie companies to higher art and even wine brands.
Take, for example, Nvidia, whose CEO, Jen-Hsun Huang, recently confirmed the company’s plans to create its own metaverse to test robots and vehicles before it hits the market. Disney, in turn, plans to create a digital theme park inspired by Disneyland, and Nike is already selling a collection of metaverse shoes called CryptoKicks for astronomical amounts of up to $100,000 in cryptocurrency. The revolutionary trend has also caught up with Polish startup SmartVerum, which will use tokenization to transfer art exhibits from the gallery to the metaverse.
A new idea for a luxurious lifestyle
The virtual real estate market also deserves special attention, as according to a recent report by an analytics firm Security Token Market, it took up 89 percent of the total. all traded security tokens.
What exactly are properties in the metaverse and how do they sell them? These are lots and living spaces built on the basis of VR technology. After purchase on the metaverse platform, the buyer’s data is stored in a non-replaceable NFT (non-fungible token), ie a digital certificate of ownership encrypted on a public blockchain. By purchasing tokens, the buyer indirectly becomes the owner of a certain real estate or co-owner of a part of it and acquires the rights to a selected piece of digital land or, for example, rental profits.
The digital world is increasingly permeating our reality. Imagine that after work we sit down at a table in the living room, put on VR glasses, put on a virtual outfit and meet friends in a luxurious virtual house that we designed ourselves. Unimaginable ideas, which until recently only seemed real in movies or books, were no longer fiction. Here we have entered the era of digitized human activity, which promises opportunities beyond our imagination – says Bartosz Bilicki, president and founder of SmartVerum startup and an expert on blockchain technology, who has previously collaborated, among others, with the Ministry of Digital Affairs.
Virtual reality, real profit
As with real world real estate, land in the metaverse can be purchased through real estate agents. By leveraging the emergence of digital locations where clients can fulfill their fantasies and aspirations, agencies can open the door to skyrocketing profits.
Metaverse has huge business potential for brokers to expand and enrich their business. Just like in real life, digital real estate can be developed, traded or rented out. Makers can monetize real estate by charging fees to access or by trading NFT. Users can explore, interact with, view and share content in these areas. Brands, on the other hand, can use virtual real estate to advertise services, organize virtual product launches and deliver unique customer experiences. There are plenty of opportunities to take advantage of real estate in the metaverse – explains Bartosz Bilicki.
Million dollar transactions and investment potential
Some virtual platforms are already selling luxury lots in the metaverse, which can be bought and developed. As with traditional investments, along with the increasing demand for digital plots, their value is rising rapidly. The most important player in the market is the so-called “big four”: Sandbox, Decentraland, Somnium Space and Cryptovoxels. These platforms have over 250,000 in total. parcels that are among the most valued on the market, of which approximately 95% of all virtual real estate sales take place in Sandbox or Decentraland.
In November last year, investment company Republic Realm broke records when it bought a property in The Sandbox for an astronomical sum of 4.3 million dollars. In late September, The Sandbox announced its partnership with legendary rapper Snoop Dogg, who will establish his residency and collection of NFT tokens in the virtual world. Around the same time, the media reported that the real estate firm Metaverse Group had purchased a plot of land in Decentraland for $2.43 million to realize plans to enter the digital fashion industry. Increased interest in real estate in the metavers has pushed prices further, but interest in virtual real estate continues to grow.
The popularity of the NFT, coupled with growing interest in the metaverse, contrasts with the limited amount of land in virtual worlds, which keeps prices high. Plots in The Sandbox and Decentraland are steadily gaining in value as major brands such as Atari, Samsung and Nike enter these worlds with their own initiatives. Interest is also growing among celebrities who admit to being active in the digital real estate field, says the president of SmartVerum, creating an artistic metaverse. – On the other hand, more and more consumers are spending their time online and are more likely to socialize virtually, especially since the COVID-19 pandemic started. All of these factors influence the tendency to move in this direction, adds Bilicki.
What are the challenges of selling real estate in the metaverse?
While most predictions are optimistic and the numbers tempting, keep in mind that the metworlds are still new and their tokenization is not fully regulated.
There are some risks associated with investing in digital real estate. Let’s assume a certain metaverse is permanently shut down – then all land and assets on it will cease to exist. So if a platform collapses financially, as opposed to tangible real estate, a house in the metaverse can disappear completely. Potential problems can also arise from the purchase of real estate with physical or legal defects. Therefore, in the case of other investments and business ventures, it is worth considering the decision to take the investment risk – emphasizes the CEO of SmartVerum.
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