The trading volume of NFTs reached $10.67 billion in the third quarter of this year, with more people apparently willing to shell out huge sums of money for art that will never actually hang on their walls or adorn their homes in any way (with the exception of artist Beeple’s newest piece, which lives in a 3D box the buyer can put wherever he chooses). Now there’s a related, equally bizarre item selling for millions of dollars online: virtual land. It’s like real land, sort of, except you’ll never set foot on it because it only exists in the metaverse.
Last week Tokens.com Corp, a Canadian investment firm focused on crypto assets, announced it had closed on the “largest metaverse land acquisition in history” through its subsidiary Metaverse Group, whose real estate portfolio spans several different virtual worlds and is reportedly worth “in excess of seven figures.”
The land acquisition was in the form of 116 segments each equivalent to 52.5 square feet, for a total of 6,090 square feet of land. That’s a little bigger than a standard full-size basketball court (which is 4,700 square feet). In short, it’s not a lot of space, particularly for $2.4 million. So what gives?
People and companies are betting on life becoming more digitized and the much-hyped, little-understood metaverse taking off; virtual land is becoming as much of an investment as physical land, and if current trends continue, may stand to give early adopters a huge payout. Metaverse Group chose its plot of land very intentionally, and knows exactly what use it will be put to; located in Decentraland’s Fashion Street district, the space will be used “to facilitate fashion shows and commerce within the exploding digital fashion industry.”
Let’s back up a bit. Decentraland is a decentralized virtual world built on the Ethereum blockchain, with “decentralized” obviously being the key word and the platform’s big differentiator. “The people who use Decentraland own Decentraland,” Dave Carr, communications lead for the platform, told Euronews Next. “We have a decentralized autonomous organization in which people can submit proposals and vote on proposals submitted by others. And this effectively determines the future direction of Decentraland.”
Facebook, now Meta, aims to rule the metaverse of the future, but it seems likely that people will gravitate towards platforms like Decentraland precisely because they’re not owned or controlled by a centralized authority. Facebook hasn’t done a great job of earning its users’ trust, and it could take a long time for the company to turn consumer sentiment around. Meanwhile, Decentraland’s emphasis on autonomy and the lack of a single powerful decision-maker may be just what virtual world enthusiasts are looking for.
Users of the platform can create avatars, buy property, play games, purchase wearables, and attend events. MANA is an Ethereum-based token that acts as Decentraland’s native cryptocurrency, and its value hit an all-time high last week, reaching a market capitalization of $9.2 billion. Metaverse Group’s land acquisition was paid for with 618,000 MANA, which at the time of sale equated to around $2.43 million.
It was a record for the most money spent on a plot of virtual land—until yesterday, when virtual real estate developer Republic Realm paid $4.3 million for a piece of property in The Sandbox, another decentralized virtual world. Republic Realm hasn’t yet said what it plans to do with the land other than “developing” it.
Metaverse Group, meanwhile, fully expects its own land investment to pay off. The company plans to partner with existing fashion brands and curate fashion projects and events on its virtual property. “Fashion is the next massive area for growth in the metaverse,” said Sam Hamilton, Decentraland’s head of content.
It’s a slightly odd time to be focusing on fashion, what with the pandemic having stopped most of us from caring or noticing what we wear and how we look on a day to day basis. Brick and mortar stores and malls have accordingly fallen on hard times, with consumers either forgoing new clothes or shoes altogether (because who needs ’em when you’re not going anywhere?) or opting to buy online.
Does the idea of companies spending millions on virtual land where digital avatars can attend virtual fashion shows and buy branded NFTs still sound absolutely wacky? I hear you. But it seems we’re in for a future where more of the things that populate our lives start to have digital counterparts. Maybe it’ll all work out, or maybe we’re slowly but surely moving towards a Ready Player One–like world where the best things in life don’t actually exist in real life—only digitally.
In any case, the metaverse will march on, decentralized or not, and at a pretty quick clip if recent events are an accurate indicator. “Early investors will want to have content added to their property, because they have a vested interest in the virtual worlds in which they purchase the land,” Carr said. “It brings in people to the virtual world and…enriches the experience.”
The future sure does seem strange.