All language subtitles for Metaverse Real Estate Boom： Why Investors Are Buying Virtual Land ｜ WSJ

The latest big real estate market isn't
on scenic coastlines or in major cities.

It's in the metaverse, where a growing
number of investment firms are spending

millions to acquire digital property.

Owning land now in the metaverse is a
little bit like buying land in New York

250 years ago.

Metaverse real estate isn't all that
different from property in the real

It just exists digitally in 3D cities
where users can simulate real -life

pursuits, like shopping, playing games,
or attending virtual concerts.

There are houses that you can walk into.
There are shops that you can go into

and buy things.

And this real estate in the metaverse is
increasingly for sale.

The idea behind investing in digital
land is that once you own it, you can

money by developing virtual property and
leasing it out.

We bought it because we want to do
something very big there. We want to do

something that's immersive and exciting.
And in order to do that, you have to

have lots and lots of space.

Of course.

digital real estate is still considered
a very risky investment.

So what exactly led to this virtual land
boom? And what factors make it so

valuable?

Right now, the metaverse is an evolving
space that comprises multiple digital

worlds where users can interact with
avatars. Many of these digital spaces

appear cartoon -like, while others feel
like virtual recreations of the real

world.

Andrew Kegel is the CEO and co -founder
of Tokens .com, an investment firm

specializing in cryptocurrency and
metaverse real estate acquisitions.

There are only a few

platforms where investors can buy and
sell real estate, each with their own

unique cryptocurrencies.

Each platform has a limited number of
parcels.

available for purchase, which is tracked
using blockchain technology.

In November, Republic Realm, a firm that
buys and develops real estate in the

metaverse, said it paid $4 .3 million
for land in the world of Sandbox, its

largest digital property sale publicized
to date.

The whole reason why it is a store of
value is because at the outset, each

metaverse platform declares.

exactly how many parcels there will be.

So they would be cannibalizing the value
of their own holdings if they continued

to mint more and more of it. So that
tenet of scarcity is what gives the

category value.

As in the physical world, location is a
major factor to consider when buying

digital land.

Areas that are busier or have more
visitor traffic, like the downtown

parcels of land that are for sale there
would be worth more than those that

might be in the suburbs.

Once you have this parcel of land, you
can use various programming tools to

create things like an amusement park, a
casino, a museum.

You can build whatever you want.

Investors are betting that individuals
and companies will spend money on

developments like homes and retail
space.

And as more people join these online
worlds, the properties will increase in

value. You know, if you build a mansion,
you might sell it to someone who's very

wealthy and wants to spend thousands of
dollars or hundreds of thousands of

dollars on a mansion in the metaverse.

Or if you build a mall or an office
tower, you're going to lease out the

to companies and you're going to collect
rents.

Tokens .com said it paid $2 .5 million
for Attractive Land in Decentraland's

fashion district.

Decentraland is a 3D decentralized
virtual world that was launched in 2017.

is that we want to turn that property
that we've purchased there into the

Drive or the Fifth Avenue of the
Metaverse.

Our goal is to be the dominant and
leading Metaverse landlord.

Companies pay an architect to design
virtual homes or malls and a game

to build them.

Zoning rules limit what and where a
company can build in the Metaverse. But

unlike the real world, Metaverse
buildings can defy the laws of physics.

So there's a point in the development
cycle where it looks nearly identical to

real -world real estate development. So
you hire an architect, you come up with

a mood board, you pull images of other
spaces and buildings and designs you

like, and you figure out what it is
you're going to build.

And then from that point forward, it
actually turns into video game

So then you hand it off to 3D renderers
and then to 3D developers who make it

interactive. Some of Republic Realm's
developments include a virtual mall.

which at least is to retailers selling
fashion for avatars, as well as a master

-planned community of around 100 villas
on private islands that it sold to

individuals. So in some ways, these
immersive e -commerce environments that

we're building are really 3D equivalents
of marketplaces like Amazon, like Etsy,

where multiple different sellers and
retail products or experiences can be in

one place but not have to build all the
tech themselves.

Advertising and brand partnerships are
another enticing aspect of metaverse

estate. Investors anticipate a future in
which digital property owners can work

with brands that want a presence in
these growing digital worlds.

This is not just an opportunity to
continue to build their brand, but it's

to introduce their brand to a whole new
demographic of people that are young

gamers into crypto and all these types
of things.

Of course, investing in digital
properties is still very risky and

speculative. Unlike in the real world,
the value of virtual properties could

plunge if the world they are in loses
popularity and people stop visiting it.

Prices can also be slammed by the
volatility of cryptocurrencies.

It's really a third derivative
investment of crypto, highly volatile,

speculative. But the reason people are
drawn to it is precisely for that

because there is the potential for
outsized returns and that volatility is

they came for.

In order to reduce that risk, investors
are buying land in a number of different

virtual worlds.

Republic Realm, for example, says it
owns more than 3 ,000 plots of digital

across 24 different worlds.

If you bought crypto five or ten years
ago, you're a very rich person now. And

people see that and they're looking for
other things like that to replicate that

growth. And so all these other
blockchain -based investments, including

metaverse real estate, are appealing to
people for that reason.

Interest in the metaverse and the
properties within it accelerated as

spent more time online during the
pandemic.

It got an even bigger boost after Mark
Zuckerberg announced Facebook's name

change to Meta Platforms Incorporated,
reflecting the company's focus on

creating online worlds in the metaverse.

I think the light bulb just went off in
a lot of people's minds and said, hey,

this is something that's going to
continue to appreciate and appreciate

if the trend of people congregating in
these environments continues to grow.

According to the digital currency
investor Grayscale, The global market

goods and services in the metaverse will
soon be worth $1 trillion.

For the next generation of tech users,
which is why Mark Zuckerberg anticipated

this and renamed his company, they're
going to require from technology an

experience of 3D and immersive, and they
are not going to be content with their

parents' social media or e -commerce.

which are 2D and about scrolling.
They're going to want to go meet their

in what we now call a metaverse where
they can interact in a way that feels

more human and much more normal.