The Virtual Land Boom, is it just another overhyped bubble?
If you are a Millenial or Gen Z, chances are you would have probably encountered a game called Sims or Secondlife where you are designed as Avatars to interact with people and build your own world, but can you ever imagine that people would actually pay millions of dollars for a plot of land on the game? If yes, then welcome to the Metaverse, a platform that has recently gained popularity because of Facebook’s major announcement in late 2021. But what is this Metaverse and Virtual Land really all about? Is it just another bubble in Crypto Space?
Metaverse and Virtual Land
To understand the popularity behind virtual land, we need to first grasp the concept of the Metaverse which refers to a hypothetical proposed version of the internet. Metaverse is meant to be the next evolution from instant messaging and allow users to access permanent online 3D virtual worlds using headgear made specifically for virtual reality (VR) and augmented reality (AR). Metaverse aims to bring people closer together in an online setting and allow you to immerse in the experience of the internet in 3D, beyond just using it from afar on a 2D screen.
The metaverse itself has been conceptualized for a few years now and if you ever need a snapshot of what Metaverse will look like in the future, you need to watch the movie “Ready Player One” as Steven Spielberg clearly depicts the world we are heading to. This Metaverse clearly took off ever since tech giants like Facebook and Microsoft made their announcements in October 2021 that they were clearly working on bringing the Metaverse to life. This hype was further bolstered when Justin Bieber, The Weeknd, Ariana Grande and Travis Scott performs in the Metaverse which is watch by million of fans and investors hoping to capitalize on the opportunity
Experts predict that 2022 will be the biggest year for Metaverse and the space could soon be worth $1 Trillion and as what we know from recent examples like Meme Coins or NFTs is that hype is king. Due to this hype, investors are lining up to platforms like Decentraland and Sandbox to purchase a piece of land in the game to jump in before the market really booms. In 2021, the value of total daily virtual real estate transactions processed through NonFungible.com has increased 20,572.52%, from a seven-day average of $164,001.52 on Jan. 1 to a seven-day average of $33,903,255.18 on Dec. 17 and that is not even the whole story as transaction numbers have also made a dramatic 677.43% jump, from a seven-day average of 381 on Jan. 1 to a seven-day average of 2,962 on Dec. 17.
Decentraland, launched in 2017, is a blockchain-based decentralized 3-D virtual reality platform where its community can buy and sell land through “non-fungible, transferrable, scarce digital asset stored in Ethereum smart contract was the early player in the metaverse space. It saw its growth stalled in 2018–2020 but has recently felt the benefit of this metaverse hype as it saw users grow from a couple of thousand to 300,000 monthly by the end of 2021.
The Decentraland platform in itself is divided into 90,000 plots of land that are called parcels which measure 50 by 50 feet each and their prices vary from their proximity to the city hall. You can technically buy these parcels from their platform using the MANA token and don’t be surprised if some of those plots are worth millions of dollars. These prices are expected to skyrocket with the recent involvement of Token.com who recently built their own headquarters in the Metaverse situated in the Crypto Valley. Token.com also recently acquired 50% of The Metaverse Group which in itself owns a real estate investment trust, and plans to build a portfolio of properties in Decentraland as well as other realms including Somnium Space, Sandbox and Upland.
“It’s inevitable that the metaverse will be the №1 social network in the world.” Said Michael Gord, co-founder of the Metaverse Group
Of course the Pandemic also plays a big factor also in the metaverse boom as people are advised to stay at home and socializing becomes a lot more challenging. With the recent upheaval of virtual events, there simply is no limit whatsoever which we can do in the Metaverse while still adhering to the health protocols of the world. Due to this, Virtual Land will continue to be a sought after investment as the users and adoption ramps up. But with the recent hype and speculative nature of this virtual land, is it just another bubble waiting to burst?
Is it a bubble?
The question whether this Virtual Land is a bubble or not will lie in the expectation of the investors who are committed to it because a lot of major surge or hype happens after the Facebook announcement. This means that the surge in activity hinges on the expectation that the Facebook or Microsoft project will be successful but what if it doesn’t? Apparently the announcement has drawn a lot of criticism from people due to privacy issues when using facebook and its platform.
What if it does work? What if Facebook and Microsoft managed to pull off the interest of people to the Metaverse? These tech giants will likely use the technology of Decentraland and Sandbox and build their own platform where they have their own creative control, then what will happen to your million- dollar land? It would be worth nothing unless Decentraland managed to connect their Metaverse to the Metaverse of these tech giants. In addition to that there are many different private institutions that are coming up with their Metaverse platforms selling the same land so even though you managed to connect all of these metaverses together, your land that was once finite doesn’t seem like a rare item anymore.
Obviously this Virtual Land is a brilliant invention that has a lot of real life applications to it. For example, you can rent it out to event managers to host their events on your land and honestly it came at the perfect time with the lockdowns depriving people to socialize but the lockdowns won’t stay forever.
The Metaverse will be a place where people hangout and socialize if it does take off but it will not be the place where people stay because you don’t expect people to wear VR headsets 24/7. In the end, even if there is Metaverse or not, people will still go back to the real world because that is where their job is and certainly there is no replacement to a human social touch.
It is still too early to say whether Virtual Land is a bubble or not but it is true that the current market is dominated purely by speculative behaviour and greater fool theory. Same goes as the NFT space, although the technology behind the invention is applicable, the current application is not so useful and could be just a bubble waiting to burst. There is no certainty that your million dollar virtual land or platform will be used by the tech giants but if you purchased real land with that money, you can be rest assured that neither you nor the Earth is going anywhere so it will always be applicable and valuable.
We in Nagaya Technologies Pte Ltd surely are excited to hear about the development of the Metaverse and its applications which is why we continuously look to integrate the world’s first hybrid crypto asset to the latest advancement in the crypto and blockchain space.For more information regarding the latest updates on Nagaya and our whitepaper, you can visit us at nagaya.io or join our Official telegram channel at t.me/nagayaofficial
and you can also talk to us at https://t.me/Nagayacommunity
