Metaverse Land Rush: How NFT Virtual Land is Creating a New Asset Class | Dex-Trade Academy
1. Introduction
2. What is the Metaverse?
3. What is NFT virtual land?
4. Use cases of metaverse land
5. Are global companies purchasing metaverse land?
6. What affects the price of NFT virtual land?
7. Where to buy land in the metaverse
8. Tips before buying your first metaverse land
9. Closing thoughts
Introduction
The metaverse's development has rapidly created interesting new blockchain use cases. As 2020 was such a massive year for the metaverse and Non-Fungible Tokens (NFTs), it's no wonder that virtual land has become a hot topic.
Some NFT sales of land have reached prices greater than properties in the physical world, making the concept difficult to grasp for some. In fact, there are actually a lot of similarities between NFT land and typical real estate. But as a digital asset on the blockchain, NFT land has some unique features to explore.
What is the Metaverse?
The metaverse is an online, virtual world that will combine multiple aspects of our digital and real lives, including work, socializing, and recreation. 2021 saw many tech giants, including Meta (previously Facebook), Microsoft, and Epic Games, begin developing and exploring the space. Blockchain technology plays a crucial role in the metaverse as digital ownership, identity, and economies are central concepts.
In the metaverse, users can create their own avatars, interact with others, and explore a variety of virtual spaces. These virtual spaces can be anything from a concert venue to a shopping mall, and everything in between. With the advent of NFTs, virtual land has become a valuable asset in the metaverse.
What is NFT virtual land?
NFT virtual land is a digital space that users can explore with 3D avatars in the metaverse. Developers create large maps of land divided into small parcels to sell on the market. To represent the unique ownership of the area, users purchase NFTs linked to a particular plot of land. Users can purchase these plots through a land sale directly from the project or on the secondary market. Exactly what you can do with NFT land depends on each project.
One of the unique features of NFT virtual land is the ability to customize it. Users can build on their land and create unique experiences for others to enjoy. Some NFT virtual land platforms even allow users to sell advertising space on their land, opening up a new revenue stream.
Use cases of metaverse land
Apart from speculation, landowners can use their virtual space in various use cases. One of the most popular use cases is advertising. If your plot is in a popular area or district and attracts many visitors, you can charge for advertising space. This is similar to how billboards work in the physical world.
Another use case is socializing. You can host events on your digital land, including concerts, conferences, and community meetups. This can be a great way to build a following and create a sense of community around your virtual space.
Gaming is also a popular use case for metaverse land. Your NFT land might have a use in an NFT video game. For example, land in Axie Infinity can provide extra resources, tokens, crafting ingredients, and even influence the game's storyline.
Are global companies purchasing metaverse land?
Prominent celebrities and brands have already begun to purchase land in the metaverse. For example, Snoop Dogg is creating his own Snoop Dogg Metaverse Experience on The Sandbox. Adidas has also purchased space on the platform for their own AdiVerse metaverse experience. Apart from joining in the metaverse and NFT hype, brands and companies will offer users the chance to interact with them by accessing metaverse services, games, and products.
NFT land has even made the jump from retail investors to institutional investors. For example, The Metaverse Group has made headlines for purchasing large amounts of digital real estate, which we'll dive into later.
What affects the price of NFT virtual land?
The price of a plot of virtual land is determined similarly to other non-fungible tokens or cryptocurrencies. There are three main factors to examine. The first is utility. Virtual land differs from many other NFTs as it usually has a variety of use cases. These will differ depending on the platform they're on. If your land is in a popular area or receives many visitors, you could charge for advertising. Your land might also provide you benefits in a blockchain video game. You could have improved staking bonuses or experienced unique in-game events like in Axie Infinity.
The second factor is the platform. Popular platforms like Decentraland, The Sandbox, or the upcoming My Neighbour Alice tend to have higher prices for their NFT land. This is due to market supply and demand. The user base and interest of these platforms are much higher than smaller projects. Finally, speculation is a factor in the price of NFT land. Large sales of NFT lands in the past have led to an increasing amount of speculation.
Where to buy land in the metaverse
There are two main methods for purchasing metaverse NFT land. You can take part in a land sale and purchase it directly from the project, or you can buy land from other users through a marketplace. An NFT land sale is a good way of buying your land at a lower price than on the secondary market. Most large metaverse projects with NFT land have seen rising prices, meaning buying land in a sale tends to be better. Some projects sell all their plots in one go, while others sell them in rounds.
An NFT exchange is the safest and most reliable way to purchase land on the secondary market. This way, both the buyer and seller are protected by a smart contract that ensures the trades occur smoothly for both parties.
Tips before buying your first metaverse land
Buying NFT land in the metaverse should be treated like any other investment or financial transaction. Make sure to do your own research and consider the points below. First, buy your NFT land from a reputable source. If you purchase the land through a project's sale, make sure you have the correct official link. If you buy land from someone else, never make any transfers directly to their wallet. You should always make the sale through a trusted, reputable marketplace or crypto exchange. Binance NFT Marketplace and OpenSea are two possible choices, as previously mentioned.
Second, decide if you want to buy or rent your NFT land. Depending on your needs, you might not need to purchase a piece of land. For example, you might want to host a single event in a popular district. If the platform you're using supports rentals, then the price you pay depends on the plot's traffic, closeness to other important plots, and its size. Finally, consider the NFT land project carefully. The project you choose will determine the utility and partly the cost of the NFT.
Closing thoughts
To many, the idea of virtual land sales might seem far-fetched. However, you only need to look at the rise of NFTs, digital collectibles, and the metaverse to understand how NFT land has developed. The idea isn't much different from owning a website or other virtual space. For example, popular domain names have sold for hundreds of thousands of dollars. However, the way NFT lands guarantee ownership is where we see a difference.
With the tech world preparing itself for a metaverse future, we shouldn't be surprised to see even more metaverse NFT land for sale soon. But like any investment, it's essential to do your research and consider all factors before making a purchase. NFT virtual land might be a new
