MISE & Agrave; DAY
Spending millions on virtual land might sound silly, but the enthusiasm for parallel universes is driving investors to bet big on digital real estate.
This week, New York-based Republic Realm announced that it had spent a record $ 4.3 million to purchase land on The Sandbox, a platform providing access to a virtual world where participants can chat, play and even participate in concerts.
On competing site Decentraland, the Canadian company Tokens.com , specializing in cryptocurrencies, had spent $ 2.4 million in November for a real estate purchase.
A few days earlier , Barbados, a small Caribbean country, had said it wanted to establish an embassy in the metaverse, this network of interconnected virtual spaces, sometimes described as the future of the internet.
Interest in the metaverse (contraction of meta and universe) has skyrocketed since October after Facebook’s decision to make this idea its new business venture, with the group going so far as to rename its parent company “Meta”.
This strategic turning point has “introduced the term to millions of people much faster than I could have imagined,” recognizes Cathy Hackl, a tech consultant for companies wishing to enter the metaverse.
According to the cryptocurrency database Dapp, more than $ 100 million has been spent in the past week on real estate purchases on the four main metaverse sites of The Sandbox, Decentraland, CryptoVoxels and Somnium Space.
For Ms. Hackl, the explosion of the market, which brings together owners, tenants and land developers, is not a surprise.
“We are trying to translate into the virtual world what we know how to do with physical goods, “she told AFP.
” 5 e Avenue “of the metaverse
While it will be some time before these sites become true metavers, allowing users to explore parallel worlds through virtual reality headsets, digital terrains already function as financial assets, much like real estate, Hackl explains.
“You can build on them, rent them or sell them,” she says.
Tokens.com has acquired a prime plot on Decentraland in the Fashion Street district that the platform wants to turn into a destination for luxury groups’ virtual stores.
“If I hadn’t done the research and understood that these are high-value properties, that would sound completely crazy, ”admits Tokens.com boss Andrew Kiguel.
Mr. Kiguel worked for 20 years as an investment banker in the real estate industry. According to him, virtual lands represent an opportunity similar to real-world goods: they are located in a trendy and busy neighborhood.
& nbsp; “They are places for advertising and events where people are going to come together, ”he explains, mentioning a recent music festival that drew 50,000 visitors to Decentraland.
Luxury brands are already venturing into the metaverse: a Gucci handbag ‘is sold on the Roblox platform more expensive than its physical version. Mr. Kiguel hopes that Fashion Street will become the equivalent of 5th Avenue in New York City.
As for knowing how to generate income, “it can be as simple as owning a billboard or as complex as having a store with a real employee,” he explains.
“We could go home with their avatar, look at 3D models of a shoe that could be held in their hands, and ask questions. “
Second Life 2.0
As early as 2006, a real estate promoter had been talked about after having sold land for $ 1 million in the virtual world of Second Life, a precursor to the metaverse site.
Second Life is still active, but supporters of its more recent rivals point out a major difference.
On Decentraland, all purchases, whether real estate or virtual works of art, are made via non-tokens. fungible (NFT).
Some internet users have spent tens of thousands of dollars on these digital objects, with the concept generating excitement and skepticism.
Mr. Kiguel believes that digital ownership will become mainstream in the coming years thanks to blockchain technology, which guarantees the security and transparency of transactions.
“I can see the history of the owners, what it cost and how it passed from one person to another, ”he explains.
However, investing involves risks, to begin with by the volatility of the cryptocurrencies used to buy NFTs.
In addition, if the virtual concerts on Roblox or Fortnite have attracted tens of millions of curious people, the scarcity of data on the metaverse suggests that the attendance of Sites like Decentraland lag far behind established social networks like Facebook or Instagram.
The value of real estate investments in the Metaverse will depend on the number of people visiting these platforms.
” I know that sounds a bit absurd, ”acknowledges Mr. Kiguel. “But there is a vision behind it all.