Metaverse real estate and stocks are just some of the ways future tech enthusiasts are investing in the next digital frontier. In 1992, writer Neal Stephenson published his third novel, “Snow Crash.” In it, Stephenson’s characters interact in an all-digital environment where appearances can be changed on a whim and digital real estate is just as valuable as its real-life counterpart. Stephenson named his digital medium Metaverse.
Twenty-eight years later, public companies like Meta (formerly Facebook) and decentralized autonomous organizations (DAOs) like the Decentraland Foundation are working to make the metaverse a profitable reality. This has created entirely new revenue opportunities for individual investors, gamers, digital collectors and developers.
However, it is important to note that the metaverse is still in its infancy and its value proposition has yet to be proven. Any investment in the Metaverse should be considered speculative and highly risky.
Investing in Metaverse
The least volatile option for individual investors to invest in the metaverse is to invest in publicly traded companies whose business models or profitability depend on the metaverse.
Meta Platforms Inc (NASDAQ: FB)
In October, Mark Zuckerberg, formerly Facebook Inc. announced that the company known as Meta Platforms Inc will undergo a major rebrand and become Meta Platforms Inc. Since the announcement, Meta has launched Horizon Worlds, a virtual reality metaverse platform. Meta’s Oculus Quest 2 VR headset has also been one of the popular giveaways. However, we’ll see if the increased headphone sales result in more Horizon Worlds users.
Roblox (NYSE: RBLX)
Roblox is an online metaverse platform that allows players to create virtual worlds and share them with other Roblox users. Since its inception in 2006, Roblox has grown rapidly, with 9.5 million indie developers, 24 million unique digital experiences, and 49.4 million daily active users, up 35% year over year. Yet despite these numbers, the company has yet to make a profit.
Boeing (NYSE: BA)
Boeing uses the metaverse to expand and improve its manufacturing capabilities. Greg Hyslop, Boeing’s chief engineer, said in an interview with Reuters that the aircraft manufacturer plans to create a proprietary digital environment where human, computer and robot workers can communicate and collaborate seamlessly around the world.
Microsoft (NASDAQ: MSFT)
Microsoft wants to dominate the metaverse space in the professional world. The company plans to release Mesh for Microsoft Teams in 2022. The add-on to the popular video conferencing platform will allow individuals to create personalized avatars and collaborate in a holographic 3D environment that transcends geographic boundaries. A key feature of Microsoft Mesh will be Holoportation, a tool that allows users to access the aforementioned digital media with a VR headset. The user appears as a digitally realistic representation of himself, with the ability to interact with team members as if they were face-to-face.
Metaverse Real Estate
Although Metaverse is still in its infancy, platforms like Sandbox and Decentraland have already started selling digital real estate in the form of digital tokens (NFTs) on blockchain networks that can represent a wide variety of unique items. When someone purchases a piece of metaverse real estate, the blockchain network powering the metaverse platform validates the sale and transfer of ownership.
When virtual real estate is purchased, the owner of the metaverse real estate NFT can rent, sell or build their digital property. Japanese video game maker Atari recently purchased 20 parcels of digital land in Decentraland and created its own crypto casino.
How to Buy Metaverse Real Estate?
The user who wants to buy metaverse real estate needs to determine on which platform they want to buy digital real estate. Popular options are Decentraland and The Sandbox, although there are a few more. Do your own research before purchasing any land in the Metaverse. The user needs to create a digital cryptocurrency wallet, a type of computer software that connects to a blockchain network and is compatible with the associated blockchain that stores the cryptocurrency and powers the metaverse platform. From there, the buyer needs to access the marketplace of their chosen metaverse platform and connect their digital wallet to it.
Buying digital real estate at this stage is very similar to buying real estate in the physical world. A buyer should consider the price, location and future value of the digital land they are considering purchasing.
Once the buyer identifies a piece of land, he must receive the tokens or coins and store them in his digital wallet in order to purchase it. The type of token or tokens that will be needed to perform the transaction will vary by metaverse platform. For example, to purchase digital land in Decentraland, the user must purchase MANA tokens. If he wanted to buy land in The Sandbox, he would have to acquire SAND tokens. If the buyer has connected and financed his digital wallet to the metaverse market, all he has to do is bid on the land or buy the land outright. The cost of the land will be removed from the digital wallet and the NFT representing the land will be transferred to the user’s wallet. The same goes for purchasing other metaverse NFT items, such as clothing and accessories for avatars.
We’re starting to see it these days. Lands purchased over Metaverse are now put up for sale on websites such as the owner. It’s a very popular platform from its owner, and if it can transform itself, it could be a good metaverse marketplace.
However, there is an important point that investors should pay attention to, metaverse land, objects, etc. cannot be purchased directly from the owner. People who open these ads may also be the target of defrauding people who do not have enough knowledge about the subject. After all, someone who is trying to buy a metaverse plot from its owner probably has a lack of knowledge at this point and can be easily fooled. In order not to be deceived, you should buy directly from the projects’ own marketplaces.
Metaverse projects on blockchain networks are powered by exchangeable tokens, which are divisible and mutually exchangeable tokens. These tokens are used to purchase digital assets such as virtual land or clothing for avatars. They can also be traded for other crypto or fiat currencies. Some metaverse cryptocurrencies also allow holders to vote on decisions on a metaverse platform, such as where the money should be invested or which new features will be released first.
Theoretically, as the value of digital assets increases, so will the value of their associated tokens. Also, some metaverse platforms, such as Decentraland, burn all MANA tokens used to purchase digital assets, permanently removing them from circulation and increasing the value of the remaining tokens.
Below are the metaverse tokens listed in descending order by size of market capitalization (market cap). These options are inherently risky and should be considered a speculative investment. As a general rule, it is recommended not to invest more than you are prepared to lose.
Decentraland (MANA): With a market capitalization of approximately $6 billion, Decentraland’s MANA token powers the Decentraland metaverse world and is used as a medium of exchange in the platform’s marketplace.
Axie Infinity (AXS): Unlike Decentraland’s MANA, which is used to purchase digital goods and services, Axie Infinity’s AXS token is a management token. Owners of AXS will be able to vote on proposed decisions that will affect the Axie Infinity ecosystem, including how funds in the community treasury are spent.
Sandbox (SAND): Much like Roblox, Sandbox focuses on a metaverse of user-generated content. The SAND token is awarded to individuals who participate in The Sandbox’s alpha user test. SAND tokens can also be purchased on digital exchanges. SAND is a utility, governance and staking token. SAND holders can use it to purchase digital goods and services, vote on suggested initiatives within The Sandbox, and earn more rewards.
Enjin Coin (ENJ): Enjin is a blockchain gaming company. Unlike The Sandbox or Axie Infinity, which only offer a single metaverse product, Enjin offers its users a series of interconnected play-to-win gaming experiences.
Does Metaverse Have a Future?
Companies that invest heavily in Metaverse spend millions of dollars convincing consumers that the future is in this space. But will it usher in an era of mass adoption and unhindered digital engagement, or will it become a niche product for gamers and future tech geeks?
For now, investors should explore these platforms and consider the future value of the metaverse for themselves if it is an individual interested in the metaverse.