Metaverse Real Estate 101: How to Buy Land in the Metaverse

As the virtual and real worlds become more interconnected, why not buy a piece of virtual land within the metaverse? After all, if you have a house or an apartment in the real world, you should have one in the metaverse as well! While this may sound a little strange, owning property in a virtual world that overlays the real world may make sense for the right kind of investor.

While time will tell exactly how valuable this property is, the price for the most popular virtual land in early 2021 was $1,000. Today, landowners are asking a minimum of three times more while many others are asking for deep six-digit figures.

Where Can One Buy Land in the Metaverse?

Right now, land in the metaverse is taking the form of NFTs — non-fungible tokens. These NFTs are decentralized records/ledgers built on the blockchain and prove the unique ownership of a given digital asset. NFTs are often sold on NFT exchanges where peer-to-peer platforms allow creators to sell tokens for a certain amount of cryptocurrency.

Top Metaverses to Purchase Land

The two most popular metaverses in which to purchase land are Sandbox and Decentraland. Famous figures like Snoop Dogg and Paris Hilton have spent nearly a half-million dollars worth of virtual land which now has an estimated value of millions of dollars. Other forward-looking businesses have also purchased virtual land for the low initial price, the marketing opportunity, and to position themselves with storefronts in the metaverse. Big Fortune 500 names like JPMorgan Chase, HSBC, and Samsung have all purchased virtual land. 

Virtual Land Marketplaces

The virtual land in both Sandbox and Decentraland can be bought and sold on NFT marketplaces. One of the most popular marketplaces is OpenSea, which uses Ethereum (Sandbox and Decentraland) and MANA (only Sandbox) as the currencies. NFT marketplaces allow users to purchase land in a type of auction. Sellers can offer their land at a specific price and buyers can counteroffer, but there is no apparent option for sellers to counteroffer. Once users buy their virtual land, they can also purchase virtual art to display.

How Does One Buy Land in the Metaverse?

To purchase land in the metaverse, users must purchase cryptocurrencies with regular fiat currencies. The most common cryptocurrency used to purchase land is Ethereum, but MANA is an accepted currency depending on the metaverse. Once a user owns a sufficient amount of Ethereum or MANA, the user can connect his or her crypto wallet to an NFT exchange and bid on pieces of virtual land. Once an offer is accepted, the cryptocurrency will be exchanged for the land NFT, which is also stored on the blockchain. The blockchain technology ensures scarcity and clarifies land ownership details.

How Much Does Metaverse Land Cost?

Metaverse land pricing is fairly subjective as people can ask whatever they want for it — and they do. As in any other market, the asking price rarely, if ever, equals the selling price. Currently, the cheapest pieces of land are selling for approximately 2.3 Ethereum (or $3,500) when this article was written. That being said, there are adjacent plots of land that people are asking millions of dollars for.

What Does One Do with Virtual Land?

This is the million Ethereum question; why would someone want to purchase virtual land when you can buy real land with the same money? First, virtual land is valuable because all indicators say that we’re moving towards an increasingly virtual world. Those who wish to exist in this virtual world want a place to call “home.” Second, even if an investor decides to forego virtual life, owning the land is still a potentially wise investment. The property can be monetized through various activities and always be sold at a future date, ideally after a period of substantial appreciation.

Renting Opportunities

It’s not yet obvious whether renting will be a viable opportunity in the metaverse. Contrary to real life where there are real needs, there is nothing necessary to life in the metaverse.

People rent real estate in real life because they need a place to live. On a purely economic level of analysis, there are no “needs” for virtual estate within the metaverse, only wants. To the extent that there will be renting, it will likely be born of desire and not of any genuine biological need for shelter.

Future Directions

Looking towards the future, it’s essential to remember that metaverse land is still just one potential investment among countless others. The technology is so new that anyone making any guarantees of future value might as well be trying to sell a bridge in Brooklyn. We are functionally in the same stage as when Facebook, YouTube, and Twitter were new and we didn’t know how to use them. Many digital worlds perhaps haven’t adequately considered how human desires change from the real world to the virtual world. Other virtual worlds will likely die off simply because those who do it first are rarely the ones that do it the best. 

Conclusion

Regardless of this initial trepidation, it is highly likely that the metaverse will continue to make greater inroads in our daily lives. The technology simply has too many opportunities to fill in the gaps where reality is unsatisfying or insufficient. The Wharton School is proud to be one of the only institutions on the vanguard of education by offering courses for the next generation of metaverse leaders. The metaverse has the potential to change the way business is conducted. For more information about the Wharton School’s metaverse course or to enroll today, please visit our information page.

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This article is for marketing purposes only and does not intend to represent the opinions of the program.