Metaverse Real Estate Industry: New World, New Rules.
July 12, 2022
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Metaverse platforms are evolving exponentially, and with them, digital real estate applications and transactions. For many, the metaverse economy is a highly speculative and unfamiliar new territory, but the metaverse is too big to ignore. Consequently, it is important to gain orientation, establish a foundation for decision-making, and continuously evolve. For The Sandbox the metaverse platform with the fastest growing digital real estate market, «Wüest Meta» provides an overview of the Sandbox LAND composition, its development and valuation.
Some see it as a vision of the future, others consider the metaverse to be speculation for the time being. Perhaps it is comparable to the emergence of the Web2: The start-ups of that time are the tech corporations of today, and they are investing heavily in the metaverse platforms of the Web3.
Exponential growth and potential
Citi Group and Goldman Sachs estimate the potential of the entire metaverse in 2030 between $8 trillion and $13 trillion. Exponential growth is driving investor interest and innovation to further unlock the potential of metaverse applications. Similar to the real world, the value of virtual real estate, and therefore the value of LAND is determined by supply and demand. And the number of plots are equally limited.
Real estate sales on the largest four metaverse platforms reached more than $500 million in 2021, and analysts predict they could reach nearly $1 billion in 2022. Real estate developers and large international companies are investing millions in The Sandbox and Decentral to access new business opportunities.
One of the largest investors, Republic Realm paid a record $4.3 million for land in The Sandbox. The company is developing 100 NFT (Non-Fungible Token) islands, called Fantasy Islands, with their own villas and an associated NFT market for boats and jet skis. Ninety of the islands were sold on the first day for $15,000 each, and some were offered for resale for more than $100,000. The May June 2022 crypto crash is having a major impact on prices. A recent chart from Messari.
The Sandbox
The Sandbox is an Ethereum based decentralized NFT gaming metaverse that allows non-technical users to create, sell, use, and monetize their own virtual reality NFTs. The crypto-metaverse uses its native token SAND to support the overall game economy.
The Sandbox LAND is one of the most popular virtual properties on the market, with a market capitalization of $1.41 billion at the time of writing. The Sandbox consists of 166,464 ERC-721 Token representing digital real estate «LAND».
For the validation of LAND in The Sandbox, it is important to understand the terms.
- Within The Sandbox, there will be a maximum of 166,464 lands, each delineated on a 408×408 map that defines the metaverse of The Sandbox.
- SIZE: In the metaverse of The Sandbox, 1 meter corresponds to 32x32x32 voxels.
- LAND: The basic The Sandbox unit of the map. A 1×1 plot of LAND is 96 meters wide and 96 meters long, making it a perfect square. They are also 128 meters high.
- ESTATE: A combination of several LANDS.
- DISTRICT: A type of ESTATE held jointly by two or more people.
- SAND: The native cryptocurrency of The Sandbox. It is an ERC-20 utility token based on the Ethereum blockchain. The supply is limited to 3,000,000,000 SAND. SAND Price Index: https://www.coindesk.com/price/the-sandbox/
New world, new rules
The logics of the actual real estate industry only partially apply in The Sandbox Land is created digitally and is not measured in square meters, but in its own measurement unit. Location plays an important role in the value of a property, but not a central one, as distances become insignificant to overcome with a click. The available supply is equally ephemeral. It can change and evolve constantly. More important are factors such as the traffic and user flows generated by popular brands, celebrities or game-activities. Anything can happen on any plot – there are no usage zones and basically no limits to imagination.
Macro location decisions are taken far more quickly in the metaverse than in the real world. In the metaverse, one only has the choice of platforms. Of the countless metaverse projects, only a few have gained popularity. Among them, The Sandbox is one of the largest and most promising. However, the number of open virtual worlds offering free metaverse properties may increase in the future to rival land ownership in limited paid universes.
Price valuation is still at an early stage
These and many other factors ultimately play a role in the pricing and value stability of LAND. However, it is not yet viable to make a sound valuation of virtual real estate and thus of LAND. The development of prices cannot be reliably predicted at this early stage. As the game matures, other aspects such as the specific utility of LANDs, the designs incorporated or the nature of the experience will undoubtedly become more important. The ultimate factors will become apparent in the near future.
Wüest Meta
Wüest Meta is to become a dynamic analysis platform for the new digital worlds in the metaverse. In a first step, all LAND plots transactions are visualized dynamically and transparently on the blockchain of The Sandbox. The interactive map provides a view of potentials and the value distribution. In real time, the effective transactions are being processed. To enable the link to the analog world, the crypto currencies are converted and displayed in Fiat currency and the blocks (voxels) in m2.
Based on this, the decisive factors can be derived, which form the basis for the location rating. The research map provides new perspectives on the validation of virtual land as well as an up-to-date view of the value distribution in The Sandbox.