Metaverse euphoria boosts the purchase of virtual real estate

The idea of ​​spending millions on internet-only land may seem ludicrous, but the fury unleashed by the metaverse, a future of virtual reality, is spurring some investors to buy digital real estate.

This week, New York-based firm Republic Realm announced a $4.3 million (R$24.3 million) deal to buy digital land on The Sandbox, one of several “virtual world” sites where people can hang out. socialize, play games or go to shows.

In late November, Canadian cryptocurrency company Tokens.com acquired land on rival platform Decentraland for $2.4 million. Days earlier, Barbados had announced a plan to open a “metaverse embassy” in Decentraland.

These types of portals are promoted as prototypes of the metaverse, an internet of the future where current online experiences, like chatting with a friend, will seem face-to-face thanks to virtual reality devices.

The word “metaverse” has been on the rise for months in Silicon Valley, but interest multiplied in October, when Facebook’s parent company changed its name to “Meta” in its virtual reality gamble.

The Facebook name change “introduced the term ‘metaverse’ to millions of people much faster than I could ever imagine,” says Cathy Hackl, a technology consultant who advises companies to enter the metaverse.

Data site Dapp learns that, in the last week, virtual land valued at more than $100 million was sold in the four main environments of the metaverse: The Sandbox, Decentraland, CryptoVoxels and Somnium Space.

Hackl is not surprised by this boom, which is accompanied by the development of an entire digital real estate ecosystem, from developers to rental companies.

“We try to transfer the way we understand physical goods to the virtual world,” he tells AFP. And while it takes some time for these sites to operate like veritable metaverses, their digital terrain already functions as a real-life asset.

“You can build on it, you can rent it, you can sell it,” says Hackl.

‘The Fifth Avenue’

Tokens.com bought an excellent package in Decentraland’s Fashion Street neighborhood, which the platform wants to promote as home to luxury brand online stores.

“If I hadn’t investigated and understood that this is a valuable property, it would have seemed absolutely insane,” admits Tokens.com CEO Andrew Kiguel.

For him, who spent 20 years working with investments focused on real estate, Decentraland’s operation is governed by the same criteria as in real life: it is a modern and busy space.

“It’s an advertising and event space where people come together,” he said, taking as an example a recent music festival on the platform that attracted 50,000 spectators. Luxury brands are starting to enter this parallel world: A virtual Gucci bag was sold on the Roblox platform in May for a higher price than the real version.

Kiguel hopes Fashion Street will become a sort of Fifth Avenue in New York. Your land can earn you money as advertising space or even “having a store with a real employee”, he explains.