Metaverse in Real Estate: What Does the Future Look Like?

What is Metaverse?

Metaverse (“meta- beyond; verse- universe”) is a digital ecosystem that provides access to the virtual world. A metaverse is any 3D virtual environment that supports interactivity between and is backed by technologies such as 

• Augmented reality (AR), 
• Artificial intelligence (AI), 
• Virtual reality (VR), 
• Internet of Things (IoT), and 
• Blockchain.

Although, it may seem a new concept, however, it is not. The author of the Sci-fi novel Snow Crash, Neal Stephenson, coined the term Metaverse in 1992. He spent decades working on the technology that supports a virtual reality-based internet.

Learn in Detail: What is the Metaverse?

What is Metaverse Real Estate?

Real estate in the metaverse refers to buildings or land parcels. It serves as an environment for users to interact virtually with others to socialize or play games. Creators can profit from their content by charging for access or selling their Non-Fungible Tokens (NFTs).

Businesses promote their products, organize their launch, and provide a distinctive user experience by utilizing virtual assets. These digitally represented land parcels offer a lucrative prospect for real estate investors. Metaverse properties are similar to real-world properties in that they can be built, sold, or leased. In actuality, there are a myriad of possible uses for metaverse real estate app development. Moreover, metaverse land parcels are expanding at faster rate in the coming years.

Investors can purchase land plots from multiple metaverse platforms offering a unique virtual landscape and environment. Some of the popular metaverse platforms for real estate developers to invest in include Decentraland, Sandbox, Horizon Worlds, Metahero, and more. 

What is the Cost of Metaverse Real Estate?

Metaverse real estate has its share of ups and downs, however, mostly they’ve soared high so far. Two primary factors that determine the cost of metaverse real estate include – Market and Demand. Secondary factors include location, proximity to popular areas, and the amount of virtual content generated in that area. 

Decentraland, one of the “Big Four” owners of metaverse real estate, held an auction in 2017 where the land only cost $20. In 2021, they were selling it for $6,000 on the market. The costs considerably increased to $15,000 later in 2022. 

Businesses have been significantly investing in virtual land holdings due to the upbeat outlook for metaverse growth. For $1.7 million in October 2021, the blockchain technology firm Tokens.com purchased 50% of the virtual estate firm Metaverse Group. The Republic Realm set records in November when it paid a record-breaking $4.3 million for a home in The Sandbox.

The growing demand for metaverse assets has caused metaverse real estate prices to soar even more. The digital estate can be purchased for between $6,000 and $100,000, although some deals are apparently going for much more. 

One of the most costly sales in recent memory involved a property next to Snoop Dogg’s in The Sandbox. An anonymous buyer allegedly paid $450,000 for it.

How to Buy a Metaverse Property?

Buying a metaverse property works the same way as purchasing an NFT. Your ownership deed is a unique piece of blockchain code. This code attests to your possession of or legal entitlement to that digital parcel.

You’ll need to have your digital cryptocurrency wallet in order to begin. Before registering for a wallet, make sure to check platforms. This is so because some sites only allow transactions using certain cryptocurrencies. 

For the next step, you need to register for a profile on the virtual metaverse platform. You must connect your digital wallet to the site in order to purchase parcels of land and other assets. Once you’ve made up your mind and decided the property that you like, you can simply purchase the land.  

Additionally, you can buy land via metaverse real estate brokers or property managers. Metaverse agents or brokers, unlike real estate agents, are not subject to any licensing requirements or laws. As a result, it’s crucial to deal with a trustworthy party. 

Where to Buy Metaverse Real Estate?

The Big Four owns the majority of Metaverse real estate and these 4’s are:

• Sandbox
• Decentraland
• Somnium Space
• Cryptovoxels 

These platforms collectively possess 268,645 plots, many of which are among the most expensive on the market. Let’s discuss these Big Fours in detail where you can purchase metaverse real estate. 

1. Sandbox

Sandbox now holds the majority of the metaverse’s real estate with about 62% of the market. It has a total of 166,464 lands. Further, land currently goes for an average price of $11,000, with premium lots costing between $20,000 and $30,000. 

The forecasted revenue for 2028 is $828.95 billion.

Lands in Sandbox are typically available in sizes that include small, medium, large, and extra-large. You can buy or rent virtual rooms for a range of purposes. There are a variety of sized family homes, establishments, galleries, and hangout spots.

The community creates everything on the UGC-voxel platform, for the community. Sandbox creators and gamers buy, sell, and trade voxel works. They buy land and create experiences on it. Using NFTs and SAND, Sandbox’s utility token, they can also profit financially from these experiences. 

Over the past few years, the Sandbox has formed strategic partnerships with game creators like Atari, financial backers like Square Enix, brands like Shaun the Sheep, and well-known figures like Snoop Dogg. Its appeal as a platform for investments and creative space has grown as a result of these collaborations.

2. Decentraland

An Ethereum (ETH) based metaverse platform called Decentraland encourages users to use communal virtual space for business operations. Users of Decentraland can purchase and trade virtual goods while exploring, interacting with, and playing games in this virtual environment. Also, users can now use interactive apps, in-world transactions, and peer-to-peer communication due to the platform’s evolution. 

Land NFTs with specific grid coordinates and a link to the parcel’s details serve as ownership indicators for land parcels. Note that users can purchase Land using MANA tokens, which can also be used to pay for in-world goods and services.

3. Somnium Space

Somnium Space is a blockchain virtual reality metaverse and its economy is based on CUBEs (an ERC-20 token that functions as the native utility token for the Somnium Space platform). 

It offers functionality where users can purchase land parcels, socialize, host events, play games, create avatars, and earn money. This 3D virtual world offers users an immersive VR experience on desktops and mobile gadgets. 

In addition, this virtual space is categorized into 3 different sizes – small, medium, and extra-large. You’ll get the option to choose your properties from the roadside estates to the seaside. In-game assets and land parcels are tokenized in Somnium Space. True ownership of in-game assets on Ethereum and Solana Blockchain.

A parcel in Somnium Space typically costs $11,500. The most expensive property sold for $43,100 in February 2022. You can still purchase a smaller parcel for $2,000 to $4,000 if you wish to purchase a parcel with limited funds.

In addition to the Big Four, there are currently more than a dozen other websites that offer metaverse territories for sale. Additional choices are Bit Country, Star Atlas, Aavegotchi, and Axie Infinity.

4. Cryptovoxels

If you love Minecraft, you’ll love Cryptovoxels too. Based on the Ethereum blockchain, Cryptovoxels is an NFT-based Metaverse. There were 3,026 various-sized and shaped land parcels in this metaverse’s initial layout. 

Here, new islands and land parcels are frequently added to the map. Here, you’ll buy land and purchase it using monochrome blocks. In addition, you customize designs by adding elements or colors purchased with native $COLR tokens. 

Creators and businesses can purchase digitally represented land on which to build galleries and stores showing their carefully curated goods. You can also built-in tools for creating avatars, editing, and chatting.

At Cryptovoxels, a lot now costs $5,000 on average, but expenses can go up to over $10,000 depending on the size and location of the property. Similar to other virtual worlds, land ownership is permanently recorded on the Ethereum blockchain. 

Steps to Build a Real Estate in Metaverse

Step 1: Choose a Platform

To build property in the metaverse, you’ll require a huge set of skills. Before selecting the platform that you want to use for creating real estate metaverse, make sure you consider all the options. Consider the following points:

• Blockchain System: A decentralized and interactive virtual environment can be created using any of the major blockchain technologies, including Algorand, Solana, Polygon, and Ethereum.
• Smart Contract: The underpinning for a blockchain-based metaverse is the ability of a smart contract, which specifies specific actions to be executed in reaction to certain circumstances. 
• Having Cryptocurrency, Decentralized Money, & NFTs: Decentralized currencies, cryptocurrencies, and NFTs must be usable for best performance. Using platforms like Decentraland, Sandbox, Crypto Voxels, etc., you may establish real estate properties within already-existing blockchain metaverse platforms.

Existing metaverse platforms are still being developed. In order to create metaverse real estate effectively, it is best to start from scratch. It is the best technique because you can include the attributes and abilities you desire. This allows you to build a larger, more specialized platform. You may also keep tabs on how the metaverse ecosystem is developing while concurrently adding additional real estate.

Step 2: Develop Metaverse Smart Contract

Development of blockchain-based smart contracts is quite essential. These are the set of rules that come into play when some particular conditions are met. When both the parties that include buyer and seller clicks on “Agree” then it initiates the transaction among them. 

Step 3: IPFS Installation

The next step is to install decentralized IPFS storage systems, which depends on the operating system. IPFS stores & shares a large amount of data that has been cryptographically hashed.

Step 4: Setup of Database

In this step, developers set up the database to store all the important and confidential data of the virtual world. This information includes transaction records, end-user records, and other information through safety and security.

Step 5: Incorporating AR/VR Functionalities

This step holds a major value in the development process. The majority of the work involved in creating a virtual real estate marketplace is put into this. 

By fusing AR/VR capabilities, the metaverse platform may produce virtual reality settings, digital avatars, and other things. User interaction with the system is facilitated by it. These characteristics will enable the creation of a digital representation of a physical process.

Step 6: Designing Metaspace

Metaspace could be anything such as a virtual meeting room, virtual concert, virtual home theater and so on. This virtual setting can be accessed by someone wearing a virtual reality headset. 

Once the platform is complete, conceptualization of the virtual real estate property can begin. Designing a metaspace requires planning the overall structure’s arrangement.

A metaspace can be as big as a whole city or as little as a single room, depending on its size. You may easily create VR applications and 3D designs about the objectives of a blockchain-enabled platform with the help of a VR App Development Company. 

Step 7: Metaverse Interoperability

Interoperability refers to the connection of the virtual world, applications, and platforms. It helps to expand the horizon of the metaverse and connect more people to it. 

To build a virtual world that is completely functional, it is essential to facilitate cross-environment transactions. As a result, pick a blockchain that enables speedy and safe payment processing through a gateway.

How to Choose Which Parcels of Land to Buy on the Metaverse?

What’s an important factor to consider when we look for real estate properties? – Location, isn’t it? The same goes for virtual land in Metaverse.  Even major corporations made investments in these virtual lands, increasing the value of individual land plots. Many early buyers of nearby or neighboring lots have made significant returns on their investments. 

If you want to make investments in metaverse real estate market, look for areas with room for expansion. Locations close to potential meeting places will be more valuable than those in nondescript areas. Consider vacant lots that are outside of developed regions but close to them. These properties are available for considerably less money, and you may develop them and watch as their value rises.

Investing in the Metaverse: Risks and Challenges

Investments risks are associated in both physical real estate and Metaverse real estate. Let’s discuss some potential risks and challenges associated with investing in metaverse real estate.

• Platform Operators Control Virtual Property Rights

Certainly, there are major differences between physical properties and virtual properties. The former can be controlled and perceived in real life. However, this is not the case with metaverse real estate business. 

Metaverse real estate properties exist only on the platform. It means that the developer has full control over the system and can restrict your access to the platform. Also, they can entirely delete the platform leaving owners with no rights or control. The platform operator drafts out terms and conditions as they see fit and owners have to accept it with little to no control. 

Additionally, virtual real estate owners are not afforded the same constitutional protections as traditional real estate owners. On the other hand, owner-friendly stipulations in the market terms of use may help owners reduce risk. 

• Real Estate will Disappear if the Metaverse Platform Fails

Investing in anything comes with opportunities as well as risks. You’ll have to consider this even in metaverse real estate investment. If the metaverse fails someday, then all your real estate investments will disappear from the system. 

A metaverse property could completely disappear if the platform runs into financial trouble, unlike real estate where you can always count on the fact that you still have this tangible asset. The individual paying the bills can simply shut down the platform if there isn’t enough money to keep it running. Members may vote when closure is a possibility. 

However, keep in mind that Second Life, one of the original metaverse platforms, has been operational since 2003, so there’s nothing much to be worried about.

• Big Risks with Potentially Big Rewards

In a virtual world, there’s always a risk of losing all your investments in the blink of an eye. Although there may be uncertainty, there may also be tremendous possibilities. Industries that engage in metaverse real estate management could benefit greatly from the rapid transition in digitalization. 

Before making any financial decisions, get as much information on the metaverse as you can. Consider all the risks and challenges while weighing them against the potential benefits. Only after thoroughly weighing all the benefits and drawbacks you should make a decision.

Wrapping Up

The metaverse is just getting started. Even though this new world’s infrastructure is still being developed, certain companies and brands are seizing the opportunity to participate in it. It is also a definite way to get involved in a progressive enthusiasm that will alter the direction of human history. However, investors should exercise caution to thoroughly comprehend conditions and steer clear of scams due to the immutability of cryptocurrency and smart contracts. 

Get the best Augmented Reality App Development Services to create your metaverse real estate according to your preferences and requirements. The metaverse real estate app development will provide you with specialized solutions that can help you generate profits and guaranteed success.