By
Grace
May 19, 2022
4 Min Read
Real estate is one of the most important drivers in our real-world economy. The sector directly impacts consumer spending, prices of different goods and wealth distribution. Attempts to create a Metaverse virtual reality via the use of blockchain have enabled the creation of a replica of the physical real estate market in the form of virtual property. Although the concept of virtual land is still new and certainly not as developed as the real estate market as we know it, it is something that has the potential to grow and evolve with the development of an interconnected Metaverse. So let's find out what virtual property is and how to buy land in the Metaverse?
In a nutshell, virtual land is a blockchain-powered virtual asset in a Metaverse project that is represented by a non-fungible token (NFT). When we talk about NFT Metaverse land, we typically refer to plots of digital space that owners can use for different purposes like organizing virtual events, creating virtual properties, and even renting land out to other members of the Metaverse environment. Plots can be purchased using native tokens or other cryptocurrencies, while some projects also accept fiat payments.
Due to the fact that virtual lands are essentially NFTs, they’re authentic, unique and proving ownership over them is simple. Their reliance on blockchain technology also means that land is decentralized and there is no control from governments or single entities in terms of taxation, regulations, and maintenance.
But how do they fit into the Metaverse? Just as our physical world is divided into different territories and land segments that people hold possession over, the maps of 3D Metaverse worlds can be divided into smaller plots that can be sold separately or as multiple land offerings. Virtual property contributes to the creation of a complete virtual reality, where denizens can live, work, play, and socialize.
Although the concept of a full-blown Metaverse with interconnected virtual worlds is still far away, the ability to purchase virtual land on separate Metaverse-like platforms is a stepping stone to creating a full-fledged digital reality. There are a number of existing projects that are already experimenting with intangible properties as part of their digital worlds. Decentraland and The Sandbox are currently two of the leading Ethereum-powered virtual worlds, where buyers can purchase digital property directly in-game. Virtual land is also available for sale on secondary NFT exchanges like OpenSea.
If you have experience with purchasing NFTs, the process of buying virtual land will be familiar. You’ll need a digital wallet like MetaMask funded with the platform-native tokens. For example, if you’ve decided to buy virtual land in The Sandbox, you’ll need to fund your MetaMask wallet with SAND. On the other hand, if you want to become the owner of virtual property in Decentraland, you’ll need MANA. You can purchase the relevant cryptocurrency from Coinbase, Binance or other providers and transfer it to your digital wallet. Keep in mind that you’ll also need some ETH to cover gas fees on Ethereum.
Every platform will have a slightly different process for land purchases. The first step to buying land in the Metaverse is to choose a platform. Although Decentraland and The Sandbox are not the only two existing projects offering virtual property for sale, they’re two of the most popular ones.
Decentraland is the biggest virtual world in the NFT space and operates with its platforms-native tokens MANA and LAND. Virtual land on Decentraland is scarce, as there are only 90,601 plots created. Anyone can purchase, rent or sell virtual parcels or estates on the platform by using OpenSea or Decentraland’s Marketplace.
Decentraland’s Marketplace is the more popular option of the two as you can gain more insights into the location and its neighboring areas. To get started, create an account in Decentraland and sign in. Click on the Marketplace available in the top menu. You’ll see a section dedicated to Parcels and Estates, where you’ll find all available listings of virtual land for sale. Once you’ve chosen a plot of virtual LAND that you’d like to purchase, click on the ‘Buy’ button.
To complete your purchase, you’ll need to connect your digital wallet to your account and ensure it has enough MANA or ETH to make the transaction. Once purchased, your virtual land will be sent to your digital wallet in the form of an NFT.
Lastly, you’ll need to verify ownership over the virtual property by confirming your LAND on your wallet.
Similarly to Decentraland, virtual land can be bought in The Sandbox via LAND sales that take place on the Map of The Sandbox website or on third-party marketplaces like OpenSea or Rarible. Again, you will need to set up your digital wallet and buy enough cryptocurrency to complete your transaction.
The SAND tokens will need to be transferred to your account. This can be done by visiting the ‘Me’ section in the left panel once logged into your account. Visit ‘Your Wallet’ section to find your wallet address and use it to withdraw your funds from the exchange. At this stage, you are ready to find and purchase your virtual land in The Sandbox. Virtual sale dates are announced officially by The Sandbox in advance to allow buyers time to prepare. During LAND sales, visit The Sandbox map where available regular LAND will appear in grey color and premium LAND will appear in yellow.
You can use the Buy button on the right side of the screen to book the plot until you finalize the transaction. You will notice a pop up with your wallet and you’ll need to confirm the transaction. It may take some time until your transaction is processed, but once successful, the LAND will change to a red color, meaning that it is now under your ownership.
Similarly to physical property, virtual land can be used for a myriad of different purposes. As the Metaverse space continues evolving, it’s possible that we witness the creation of new types of activities and events that were once considered unrealistic. The existing use cases of NFT virtual property in the Metaverse are the following:
Virtual landowners can use their intangible land assets in the Metaverse to create exclusive events, business activities, parties, concerts and more. While some of these virtual activities may be free to access, others could require an entrance fee, creating income opportunities for owners. For example, Snoop Dogg organized an exclusive party in The Sandbox’s world and replicated his mansion from the real world. To enter, users were required to possess an NFT that provided access to the event.
Renting out virtual property is another opportunity in today’s Metaverse. For instance, a project incubated by LimeChain, EnterDao, created LandWorks - an Ethereum-based Metaverse land renting marketplace that allows period-based renting of virtual land in the metaverses. Projects like this enable virtual land renting and contribute to the expansion of more use cases of virtual property.
Possession over virtual land also enables owners to build and develop the property, increasing its value and contributing to a growing Metaverse. Buildings like virtual concert halls, museums, galleries, gaming spaces and others are just a few examples of how your virtual land can be put to use. Virtual properties can also be turned into a business by transforming them into casinos, restaurants or bars.
Virtual land opens up new opportunities for marketing companies and advertisers, as it can be used to host advertising events, organize advertising campaigns and promote brands.
Although the virtual space is not restrained by the physical availability of land, existing Metaverse projects like Decentraland and The Sandbox have limited pieces of virtual property available for sale. This makes digital land scarce and valuable as an investment.
Without a doubt, virtual land is a natural step in the process toward the creation of a unified and complete Metaverse. However, although the technology is constantly evolving, the existing virtual world is still at an early stage. Owning virtual land does enable a vast range of entertainment and money-making activities, but it also comes with a level of risk.
Predicting virtual property value in the future is a challenge, as no one can truly be certain as to how the Metaverse will evolve, what new projects will arise and how the virtual universe will be shaped. The virtual land market and other blockchain-powered endeavors are still considered deregulated, meaning that there is no guarantee against bad practices. There is also a financial barrier that should be noted.
Although virtual land is practically open to anyone, it does require an amount of digital currency to complete a purchase. Last but not least, buying virtual property may be a value-generating investment but at the end of the day, it’s money spent on an intangible piece of land that you can’t physically live on.
The ecosystem of virtual land is gaining significant traction among Metaverse enthusiasts, businesses, investors and gamers. With opportunities to customize land and create events and activities that are hard to imagine in the real world, it’s likely that we’ll be seeing more creative solutions being born in the virtual reality. As the Metaverse becomes more connected and united, it is likely that ownership of virtual property will offer more opportunities and incentives. However, for the potential of virtual land in the Metaverse to unfold completely, there are still regulatory and other questions that must be addressed.
