Most conversation around the metaverse now has focused on digital real estate, yet the sustainability and long-term view of the social virtual space and ownership in Web 3.0 has largely been neglected.
Metaverse is a place of multiple digital platforms, each with its own currency and culture. In this space, it allows people to collaborate with others and create their virtual dreams—from small-scale games to business-related transactions, including the purchase of virtual properties.
Some of the platforms in operation now that provide significant opportunities for acquiring digital land grabs include Decentraland, The Sandbox, CryptoVoxels, and Somnium Space.
Real estate is a limited item in the metaverse, which is why investors are currently interested in buying a piece of land on this platform while it is not yet known to many.
Secured with deeds, titles
Kristi Waterworth, who is a real estate investment journalist, said virtual property in these platforms is secured with very real deeds in the form of non-fungible tokens (NFTs).
“When you buy a piece of digital real estate, your purchase is recorded on the blockchain and the NFT is transferred to your digital wallet, the same place you store your cryptocurrency,” Waterworth said in an article.
This is similar to how real estate in the real world is held: “There’s a title for each individual parcel of land, it’s recorded in a registry, and you get a copy to prove your ownership.”
The size of a parcel of a virtual land varies by platform, but measures the equivalent of 52 feet by 52 feet in Decentraland and approximately 315 feet by 315 feet in The Sandbox, the real estate expert said.
People can purchase digital land either in the marketplace of the platform where it exists or on a third-party NFT marketplace like OpenSea.
According to MetaMetric Solutions, sales of real estate in the metaverse reached $501 million last year and could double this year. It noted that sales in January alone topped $85 million, projecting that at this pace, sales could reach nearly $1 billion in 2022.
BrandEssence Market Research found that the metaverse real estate market is also expected to grow at 31 percent a year from 2022 to 2028.
Cash back on digital properties
Merging interactions between the digital and physical world, Atlas Reality Inc. has built a platform that digitally recreates the real world and transforms the digital layer into something that can be owned, improved and traded.
Atlas Earth, an augmented reality real estate game, allows players to earn real life cash back on their digital lands. It was founded by marketing and mobile gaming expert Sami Khan who was behind the launch of startups Acorns and Honey.
As a location-based game, players can buy virtual real estate with the in-game currency Atlas Bucks, but only where they are IRL (within 100 yards). Players are rewarded cash back at a base rate of about $.05 a year, and can “supercharge” the rate by up to 30 times by watching in-app ads.
Players can become the mayor, governor or president of their city, state or country by owning the most land in real world geographic locations, such as Austin, TX. These titles are broadcasted to everyone else playing the game in their respective geography.
Using Atlas Bucks, players can shop at national partners and earn Atlas Bucks for every dollar they spend.
Not yet in the Philippines
But while there has been a rush of companies, major brands and investors pouring into the new land craze, Colliers Philippines associate director for research Joey Roi Bondoc said they are still not seeing digital real estate in the Philippines.
“We’re still not seeing virtual land in real estate so far in the Philippines. We only focus on inspection of units of the land virtually and then even the payments scheme and processing of documents,” Bondoc told Property Report in a phone call.
It’s not very clear yet if Filipinos will be hit by the digital real estate craze.
Bondoc said that here in the Philippines, the industry wants homebuyers to own actual land.
“I think it’s a little sensitive [to comment on this] at this point because of course, in real estate, we want you to have your own piece of land or property,” Bondoc noted, adding that given that, it’s difficult to transition into something that homebuyers cannot really see, feel, touch or actually step on.
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The article was originally published in The Philippines Star – Proerpty Report PH and written by Franz Lewin Embudo.