As featured in the Foundation for International Blockchain and Real Estate 2022 Industry Report Download yours here https://fibree.org/
Author: Gordon Christian, Digital Playhouse Agnes Water
FIBREE Regional Chair, Queensland, Australia
While blockchain has enabled tokenization of real estate assets in the real world it is also transforming the ownership of land in the Metaverse. This article is an exploratory journey into the transformation metaverse can bring to the existing world as most of us know it today. Fasten your seatbelts!
So how big is the current market for Real Estate in the Metaverse?
According to MetaMetric SolutionsIn metaverse land sales topped $501 million in 2021. By the end of 2022 this is expected to hit $1 billion.
BrandEssence Market Research says expected growth compounded annually from 2022 - 2028 sits at 38%. Forbes states both Goldman and Sachs and Morgan Stanley have separately called the metaverse an $8 trillion opportunity.
What are the highest land sales to date?
Single virtual property acquisitions are now in the millions with Bitcoinist reporting that Curzio
Research, a financial publishing company, purchased a sizable virtual land in TCG World for a record price of $5 million USD in May 2022. This topped the previous high of Everyrealms acquisition of a large estate in Sandbox for $4.28 Million USD in late 2021.
So where did the Metaverse begin?
CNET says the idea of the metaverse started in fiction decades ago by Orson Scott Card and Neal Stephenson with the first wave realised in games like Second Life, Minecraft, and Roblox.
But with the rise of blockchain we have seen the emergence of a new metaverse. One that is open, decentralised where the user has replaced the shareholder. One where digital assets can be created, owned and traded by creators and users.
In Michael Yardleys Property update on May 30 writer Steffi Sendecki states that Metaverse real estate platforms Sandbox, Decentraland, Crypto Voxels and Somnium currently dominate the landscape with a total of 268,645 land parcels between them.
What does a Metaverse Real Estate Company look like?
Leading Metaverse Real Estate company Everyrealm has 27 metaverse platform investment portfolios. Everyrealm has over 100 real estate virtual real estate developments underway. Fantasy Islands is one that consists of 100 islands, complete with villas and jet skis recorded sales at $15,000 on the first day of release.
The Metaverse Group is a leading virtual real estate company offering exposure to this burgeoning industry via the Metaverses. They facilitate the acquisition of virtual property along with a suite of virtual real estate centric services that are provided by pioneers of the crypto, blockchain and non-fungible token (NFT) industries.
Their company Metarverse Properties offer or plan to offer services including buying and selling of virtual real estate across the Metaverse, development of virtual land, expert level consulting for all major metaverses, finding a rental within the metaverses to fit any need, property management of existing real estate, marketing and advertising your business in the metaverse
So what is at stake in the metaverse?
Epic Games CEO Tim Sweeny of the gaming engine Fortnite said “The Metaverse is going to be far more pervasive and powerful than anything else. If one central company gains control of this, they will become more powerful than any government, and be a god on Earth.”
Outlier Ventures Jamie Burke in his Open Metaverse OS Paper put it simply, there are at least two versions of the Metaverse we observe emerging: one dominated by closed platforms and Big Tech like Facebook / Oculus and the other built on open protocols leveraging blockchains, such as the decentralised virtual land Decentraland and Sandbox. .
So what is the opportunity?
Robby Yung - CEO, Animoca Brands and creators of Sandbox explains that open metaverses allow user generated content (UGC) environments where users can create their own 3D online experiences. Virtual worlds offer opportunities for real estate development, gaming experiences and entertainment where corporations and individuals can buy some virtual real estate “to create cool stuff.”
So how will we value Metaverse Real Estate?
Metaverse Land Parcels are recorded by transfers of NFTs. NFT’s as an asset class provide an intersection of the metaverse and the real world.
Nitin Gaur - Director, IBM Financial Sciences & Digital Assets says a lot of work is being done by banks and regulators to work out what the framework will look like for non bankable assets estimated to be $2.5 quadrillion assets and how that value can be unlocked using NFTs. This is a new world that preserves value, transfers value and appreciates value that will come from transparent movement of value that is accessible to anyone.
Robby Yung sums it up nicely that the value of real estate will be more valuable by enhancing the experience in the metaverse, no different to that in the real world.
So what does the future look like?
Janine Yorio - Managing Director of Everyrealm says institutional capital will be critical in building the open metaverse. Those who have the crystal ball can see into the future. Janine has that crystal ball.
Those who stay close to the action, participate, create and educate will reap the rewards.
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