These Are The Things Real People Are Spending Millions Of Real Dollars On, In The Metaverse
While billions are joking about Facebook’s “metaverse” plans, real people are spending millions (and soon billions) in real cash to buy imaginary objects. As BofA’s Alkesh Shah writes, metaverse land (and yacht) purchases are accelerating as blockchain-enabled applications and new frontiers continue to develop.
Here are some examples of what people are spending all too real money on:
- Metaverse Group, a subsidiary of Tokens.com, purchased a 116-parcel estate in Decentraland’s Fashion Street district for ~$2.4 million (618k MANA) on Nov 23.1 If you’re wondering where Decentraland is on the map, it’s not.The 6,090 square feet of digital land purchased exists solely in the metaverse. The purchase was the largest acquisition of metaverse land to date and equates to 0.13% of all land to ever exist in Decentraland. And as Decentralands monthly users are expected to reach an all-time high of 300k this month it is not surprising that so many individuals and organizations want a piece of the action.
- Republic Realm, a digital real estate firm, purchased 259 parcels of land in Decentraland’s Metajuku district for ~$914k (1.3mn MANA) on Jun 18. The firm plans to transform its 16,000 square feet of digital land into a virtual shopping district where users can purchase digital wearables.
- Retail stores are leased and operated by third parties with current occupancy at 40%. If the idea of digital clothing sounds a bit farfetched, Balenciaga, Burberry,Dolce & Gabbana, Givenchy, Gucci and Louis Vuitton, among others, have already released digital collections.
- Axie Infinity, a play-to-earn gaming platform, announced on Nov 24 that it had sold a “Genesis” plot of digital land – one of 220 – for ~$2.3 million (550ETH).
Yesterday, an Axie Genesis Plot sold for 550 ETH!
This was the largest sale ever for a single plot of digital land ✨🔥
— Axie Infinity🦇🔊 (@AxieInfinity) November 25, 2021
- Worried about inflated land prices? You probably should be… although it is likely that they prices will get much higher before they pop: the largest known sale of metaverse (sur)real estate took place at the all too real price of $4.3 million. Republic Realm said it paid $4.3 million for land in the world Sandbox, the biggest virtual real-estate sale publicized to date. Republic Realm bought the digital land from videogame company Atari SA and the two firms said they plan to partner on the development of some of the properties.
— Republic Realm (@joinrepublic_re) December 7, 2021
That acquisition broke a record set just last week by a subsidiary of Canadian investment firm Tokens.com Corp., which said it paid around $2.5 million for land in the world Decentraland’s Fashion District: “This is like buying land in Manhattan 250 years ago as the city is being built,” said Andrew Kiguel, chief executive of Tokens.com.
- Then there are yachts: Republic Realm sold its Metaflower Super Mega Yacht, a virtual yacht, on Nov 23 for ~$650k (149 ETH) in The Sandbox to an anonymous buyer.
- The yacht includes a relaxing Jacuzzi, two helipads, lounge areas, and even a dance floor to entertain its guest.
Needless to say, such “meta” investments are extremely risky. Unlike actual real estate, which tends to retain some value even during a market downturn, the value of virtual properties could fall to zero if the world they are in goes out of fashion and people stop visiting it.
Prices can also be slammed by the volatility of cryptocurrencies, said Zach Aarons, general partner of the real-estate-focused venture-capital firm MetaProp. “If I buy a building for 40 ETH, and then ethereum goes from $4,000 to $100, that’s a fundamental risk that I’m not really taking when I’m buying a piece of physical real estate,” he said.
That hasn’t stopped the meta craze from reaching all the way to the very top: Sotheby’s created a virtual replica of its New Bond Street Galleries headquarters in London in Decentraland’s Voltaire Art District, where its Natively Digital NFT auction on Jun 3 was streamed. The structure features all five ground level gallery spaces as well as the figure of Sotheby’s London Commissionaire, Hans Lomulder, on hand to greet visitors.
Michael Bouhanna, specialist and head of sales at Sotheby’s said that “we see spaces like Decentraland as the next frontier for digital art where artists, collectors and viewers alike can engage with one another from anywhere in the world and showcase art that is fundamentally scarce and unique, but accessible to anyone for viewing.”
BofA’s take: “the metaverse consists of persistent virtual reality platforms, powered by blockchain technology, which allow users to interact through augmented reality (AR) headsets. Similar to the Gold Rush, investors and speculators are securing what they expect to be valuable assets within this new frontier. We expect the development of infrastructure (railroads) in the form of on-ramps and interoperability of digital assets. The Metaverse is worth paying attention to, given a potential market opportunity of $1tn.4 We expect development of this new frontier over the next decade, leading to interoperable environments that allow users to interact, play games, attend concerts and visit art galleries, as well as buy, sell and trade NFTs.”
To be clear, “the metaverse has already arrived with ~$392 million spent this year on metaverse-related digital assets.”
Wed, 12/08/2021 – 22:00
Jump To The Original Source