Topics Metaverse
Bybit Learn
Bybit Learn
Intermediate
Jun 12, 2022

Metaverse Real Estate: Why Virtual Land Is the Next Big Thing

Over the past year, you may have heard companies like Facebook (now Meta) and Microsoft speak about the metaverse. When technology companies speak on this subject, it usually refers to a vast network of three-dimensional virtual worlds with a focus on social connection. The increasing viability of augmented reality (AR) and virtual reality (VR) has made the metaverse more appealing than ever to tech companies.

On the other hand, metaverse crypto involves blockchain being incorporated into crypto assets and the underlying technology. Many crypto investors and professionals believe that the metaverse is the next stage of blockchain. This guide takes a closer look at metaverse real estate, and goes into detail about how you can benefit when you buy virtual land.

What Is Metaverse Real Estate?

Metaverse real estate is a type of digital land that exists in virtual worlds. Investors own parcels of virtual land where people can sell NFTs, socialize and play games.

Metaverse real estate consists of programmable virtual reality spaces that provide people with places to attend meetings, sell NFTs, socialize, go to virtual concerts, and perform an extensive amount of virtual activities. Over the past few years, the metaverse has become increasingly popular, which is evident by the recent name change of Facebook to META.

It's expected that the metaverse push will foster additional growth for virtual real estate in the coming years. To understand just how popular metaverse real estate has become, it's important to look at the compound annual growth rate (CAGR) for this industry. The value of virtual real estate is expected to obtain a CAGR of more than 31% between 2022 and 2028.

Value of Metaverse Real Estate

There are many reasons why digital real estate is able to retain its value in the metaverse. When you buy virtual land, you're essentially being provided with a certain number of pixels that make up the virtual space. Buying a larger parcel of virtual land will invariably cost more than buying a smaller one. The overall size of your parcel of virtual land will determine its value.

Parcel location and proximity to any landmarks can also dictate how much a piece of land is worth. In the event that virtual land is positioned near more well-known corporations or celebrities, this land will almost certainly sell at a price that's above the current market value.

Value can also be determined by the potential use cases for the virtual real estate. In the event that a plot of land is situated beside a VR street, it may be more valuable as a result of having more display ad opportunities. The final factor that can dictate the value of metaverse real estate involves platform adoption rates. More popular platforms usually have higher real estate prices. When a platform is more widely adopted by users, the land within its metaverse will be more profitable.

How Does Metaverse Real Estate Work?

The metaverse is considered to be a combination of the internet and spatial computing, which allows users to interact with one another via a 3D avatar. People can also use these avatars to interact with digital humans and 3D virtual objects in a way that's similar to real-world interactions. The purpose of the metaverse is to provide individuals with a fully immersive experience.

If you're still unsure of what metaverse real estate is, keep in mind that all space within the metaverse is separated into segments, or parcels, of virtual land. You can develop these parcels of virtual real estate for a specific use. In fact, companies and individuals alike are able to use the land they invest in to build something that will appeal to metaverse users.

For instance, a virtual landowner could build an office space or an art gallery. Any building that exists on the parcel can have features that make the building “liveable.” These attributes can be anything from an entertainment system to tools for collaboration. 

It's possible for someone to purchase virtual real estate in the metaverse by paying with cryptocurrencies. This land will then exist as an NFT, which is a type of asset available on the blockchain that cannot be exchanged for another item.

When looking specifically at NFTs, each one is considered to be a unique crypto asset that has a certain amount of intrinsic value. The NFT holder can either keep the NFT or sell it directly to an interested buyer at an agreed-upon price. Virtual land parcels are similar in that a metaverse user is able to purchase one on a marketplace, keep it in their wallet, and then either sell the property or develop the land.

While there is still some risk associated with buying virtual land because of the sheer novelty of metaverse real estate, digital art will always be considered art — which strongly suggests that digital land should also be able to retain its value.

Metaverse Real Estate vs. Metaverse Crypto

In order to better understand how metaverse real estate compares to metaverse crypto, you may need more in-depth knowledge of what the metaverse is — and how it applies to both of these asset types. 

While virtual worlds were once only imagined in sci-fi novels, the technological advancements over the past decade or so have turned this idea into a realistic option for businesses and crypto investors alike. Today, “metaverse” is among the most popular terms for game developers, companies and investors.

A metaverse is a type of shared virtual world that allows users with 3D avatars to interact with one another, create experiences, and construct in-world landscapes and objects. A metaverse will usually have its own currency and economy, which is where cryptocurrency comes in. These currencies and economies provide users with the ability to purchase, trade and sell digital items, avatar accessories and real estate.

Metaverse Crypto

Whether you're dealing with metaverse real estate or metaverse crypto, most metaverses can be experienced via a smartphone, VR headset or computer. A crypto metaverse is one that's outfitted with blockchain as part of its underlying technology. Crypto assets — often referred to as metaverse tokens — power the metaverse’s economy.

Some of the top crypto metaverses include Cryptovoxels, Axie Infinity, The Sandbox, and Decentraland. Even though metaverse environments have been found in MMO games for many years, the introduction of VR, blockchain and crypto has allowed for the alteration of metaverses while also displaying the real-world value that interactions and experiences have.

Metaverse crypto items and assets are represented by various metaverse tokens. The ownership of these items is recorded directly on the blockchain. Ownership of these items can be exchanged for crypto assets such as Ether and Bitcoin. These transactions can take place on different decentralized exchanges.

The Key Difference

When you're trying to understand how metaverse crypto differs from metaverse real estate, keep in mind that virtual real estate is a type of asset that can be purchased in a metaverse. You can use many different types of cryptocurrencies to purchase this real estate. 

Over the past several years, many companies have begun to use metaverses to create virtual headquarters and to hold virtual events that thousands of users can attend. But before a company or investor can build anything in a metaverse, they’re first tasked with buying metaverse real estate.

Best Metaverse Real Estate to Invest In

If you're wondering how to buy real estate in the metaverse, there are many different virtual real estate providers and projects from whom you can purchase digital land. These projects are highly varied and provide something for every type of crypto investor. If you've been looking into expanding your investment portfolio, and are wondering how to buy virtual land in the metaverse, the following are 10 of the top metaverse real estate projects in which you may want to invest.

Illuvium

Source: Illuvium

Illuvium is the latest metaverse real estate project. It launched over a three-day period beginning on June 2, 2022. While this launch was ongoing, anyone interested in the project and the land available on its metaverse could purchase one of the many 20,000 plots of land, which were available in five degrees of scarcity. Every item in the metaverse offers essential utility via the mobile and desktop companion game known as Illuvium: Zero.

During the launch, all plots of land ended up being sold out, and Illuvium raked in more than $72 million. Even though this isn’t record-breaking, considering that Ember Sword, another Ethereum-based game, sold more than $203 million worth of virtual land last July, it’s still noteworthy because the Illuvium sale took place during the recent crypto bear market. 

During the launch, anyone who wanted to buy virtual land with Illuvium could obtain parcels on the IlluviDex marketplace. The first four real estate tiers could be purchased through a Dutch auction with prices that ranged from 2 to 80 ETH. These two-hour long auctions occurred once every hour, with approximately 278 plots of land being sold during each of them. 

Once the auction began, land prices dropped at a rate of 2.5% every minute. Anyone who wanted to obtain real estate from the highest tier had to go through the entire three-day English-style auction in which the largest offer wins the parcel of virtual land. 

Illuvium has plans to launch a total of 100,000 individual virtual land parcels, which will be sold across numerous events. Each piece of land is set to generate fuel and other items that allow owners to develop and eventually monetize their property. These properties also hide blueprints that are able to open up additional crafting options.

Shib: The Metaverse

Source: SHIB - The Metaverse

Shib : The Metaverse is part of the Shiba Inu metaverse project, and is designed to give users the ability to purchase virtual real estate. If you want to purchase land in the Shiba Inu metaverse, its team is providing buyers with a total of 100,595 pieces of land. Over 36,000 pieces of land were released in the first stage. The starting bids for a piece of property are currently between 0.2–1 ETH.

Virtual land is available to buy via an auction-style system throughout phase one of the project. However, a standard purchasing system will be used for future phases. Keep in mind that priority access to this land is being given to holders of Shiboshi and LEASH. Only future phases will be open to the wider public. Virtual land on this metaverse first went up for sale on April 23, 2022. There are four tiers of land which are available with Shib: The Metaverse:

  • Silver Fur: 17,030 virtual lands — 0.2 ETH

  • Gold Tail: 7,356 virtual lands — 0.3 ETH

  • Platinum Paw: 5,714 virtual lands — 0.5 ETH

  • Diamond Teeth: 024 virtual lands — 1.0 ETH

Decentraland

Source: OpenSea

Decentraland is a highly popular metaverse that first opened to the wider public in February 2020. Development on this project began in 2016. The lengthy development time allowed Decentraland to create a strong platform that didn't require extensive updates before it became usable. This particular platform is housed on the Ethereum blockchain. Just as The Sandbox metaverse, Decentraland provides users with the opportunity to create gaming events and develop NFTs that can be used in an event or sold.

Decentraland is considered to be the first metaverse project, which is why it currently comprises billions of dollars’ worth of virtual land that’s continuing to be sold on a daily basis. An NFT real estate company known as Metaverse Group recently purchased a large portion of Decentraland real estate for around $2.43 million.

The native tokens that are available with Decentraland include LAND and MANA. Keep in mind that developing a building with Decentraland will require some basic coding skills. If you need to purchase MANA before buying a piece of land, you can do so via popular crypto trading platforms like Bybit.

The Sandbox

Source: The Sandbox

The Sandbox is likely the most popular metaverse real estate platform at your disposal, with ownership of more than 60% of the total metaverse real estate market. 

If you want to buy virtual land with The Sandbox, you’ll be tasked with paying around $11,000. In fact, premium lots of land sell for upward of $20,000 to $30,000. You can rent or buy virtual spaces for many different uses. The types of real estate at your disposal include:

  • Art galleries

  • Hangout spots

  • Family homes

  • Commercial spaces

Everything on The Sandbox is developed by its community for their specific use. Creators and buyers sell, trade and buy voxel creations. Any land that's purchased through The Sandbox is meant to contain one or more “experiences.” These experiences can be monetized with NFTs, or with The Sandbox utility token known as SAND.

To understand just how popular this metaverse platform is, The Sandbox has already forged strategic partnerships with Atari, Square Enix Holdings Co., Ltd., Snoop Dogg, and other celebrities and brands. These partnerships are part of the reason why The Sandbox has become highly appealing as both an investment platform and creative space.

Somnium Space

Source: Somnium Space

Somnium Space is a type of blockchain metaverse with a focus on virtual reality. This platform is built solely by the players who have joined Somnium Space. The virtual land that exists inside Somnium Space provides users with highly immersive VR experiences that are available on both mobile devices and desktop computers.

This space is separated into three different parcel sizes of extra large, medium and small. Users can also select from roadside or waterfront properties before creating their own spaces. Various types of objects, including 3D avatars, can be imported into these virtual lands. Users are given the opportunity to monetize any digital assets they possess.

All in-game assets and land parcels are tokenized, with ownership being authenticated via the Solana and Ethereum blockchains. At the moment, parcels of land in this metaverse cost an average of $11,500. 

In February of this year, one lot sold for just over $43,000, which represents the largest transaction in Somnium Space history. If you're interested in a parcel of land from Somnium Space, but don't have the assets to purchase it, smaller parcels are available for around $2,000 to $4,000.

Cryptovoxels

Source: CryptoVoxels

Cryptovoxels is a virtual world that's very similar to that of Minecraft. Users of this metaverse are able to purchase land before building on it with monochrome blocks. Designs can be customized with different elements and colors. You can also purchase COLR tokens on this platform. Some of the top features that Cryptovoxels provides users with include 3D avatars, chat functionality and editing.

Businesses, investors and creators on Cryptovoxels can buy metaverse real estate for the construction of stores and galleries where they can display their services, collections or products. At the moment, a Cryptovoxels parcel costs around $5,000 on average. However, you may pay upward of $10,000 for larger lots, as well as parcels in popular locations. Land ownership is recorded on the Ethereum blockchain.

Axie Infinity

Source: Axie Infinity

The Axie Infinity metaverse was first created as a type of blockchain game. However, it now exists as a popular metaverse platform. Because of how the game is constructed, the Axie Infinity world is associated with a single country known as Nursia. This country comprises seven types of metaverse real estate, each of which has its own topographic location, rarity and utility range. When looking specifically at rarity, the four categories of land you can select from include:

  • Mystic

  • Epic

  • Rare

  • Common

Each category of land has different characteristics, aesthetics and utilities. The seven types of land that you can select from offer enough variety to allow for full portfolio diversification. Each land type is able to generate actual revenue.

Star Atlas

Source: Star Atlas

Star Atlas is among the most comprehensive and ambitious metaverse real estate projects which investors can consider joining. Keep in mind that Star Atlas is also the most gamified of the entries in this guide. It’s somewhat similar to the EVE Online game, which means that it can be complex and difficult to understand for beginners. The world itself was created through the Solana platform, which is considered to be the quickest network in Web 3.0.

If you play this game, you’ll virtually be taken to the year 2620. The primary objectives of Star Atlas are to conquer different worlds and accumulate wealth by traveling across the universe in your unique spaceship. When you become a member of Star Atlas, you can purchase land, other ships, crew members, and equipment for your crew and ship. You can purchase land on the Star Atlas marketplace with several different cryptocurrencies. This virtual land can have many different rarities: Common, uncommon, rare, epic, legendary and anomaly.

Bit Country

Source: Bit Country

Bit Country is another recent metaverse real estate project that's been built on a substrate-based blockchain designed entirely for its users. Bit Country’s network is built directly on this substrate, utilizing numerous primitives that provide developers with the opportunity to use coding and programming to build a well-realized and wholly customized metaverse environment. At the moment, Bit Country is focused on selling blocks of virtual land to prospective buyers.

Keep in mind that Bit Country is currently in early access, which means that you may have to join a waiting list before you can become a member. This metaverse platform is providing users with the opportunity to purchase 100,000 virtual blocks of land. The distribution of this land is designed to be sold via grants and auctions. A sizable metaverse map is set to be made from these blocks of land, of which a single one can consist of as much as 100 subdivided units.

Aavegotchi

Source: Aavegotchi

Aavegotchi is a relatively new blockchain game built on the Ethereum blockchain. Users can purchase pieces of virtual land called REALM, which are available as NFTs. When a user purchases a plot of land, they’re given an NFT avatar that can be used to travel around the world and interact with other users. When an auction for land occurs, users can bid in the auction via the Aavegotchi Baazaar marketplace.

Is Metaverse Real Estate A Good Investment?

While there is a certain element of risk that comes with investing in metaverse real estate, the truth is that metaverse worlds have already been a fantastic investment for several years. In recent years, owners of metaverse real estate have generated a high return on investment, as well as extensive ownership rights.

Since third parties aren't needed for this type of transaction, it's very easy for an investor to build a metaverse real estate portfolio. The future of metaverse real estate as an investment opportunity is looking bright, as evidenced by the large number of businesses starting to incorporate the metaverse into their operations.

The Bottom Line

The boost in popularity of the metaverse over the past few years indicates that this is a growing trend in the wider digital space. Incorporating metaverse real estate into your portfolio can be an exciting opportunity. The metaverse projects mentioned above all exhibit solid growth and great potential. As long as you weigh your options, metaverse real estate can be a relatively safe investment with the potential for significant returns.