Unlocking the potential of the metaverse as a real estate investment

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In 2021 and early 2022, there was a lot of buzz surrounding virtual “real estate”. Investing in the metaverse was meant to be the "next big thing". Early speculators invested hundreds of millions, if not billions, of crypto dollars in the first virtual “gold rush”. Then, in the third quarter of 2022, amid the widespread decline in NFT and crypto markets and the global economic downturn, the sales volume and average prices of virtual land on major metaverse platforms plummeted. /p>

This volatility was perhaps to be expected, as nascent as the Metaverse is and as embryonic as first-gen technology still seems to be on most platforms. However, as metaverse technology optimizes over the next two years, many expect another gold rush. Countless metaverse real estate investment companies are undoubtedly betting on it.

Speculators in this early gold rush were mostly crypto and fintech investors rather than traditional real estate investors. The latter have largely watched from behind the scenes as the virtual land market explodes and then collapses. Yet despite recent headwinds, many of the savviest business minds remain optimistic about the potential of virtual real estate. They believe it can fundamentally transform how, when and where we meet and do business in the future.

To realize this potential, developers of metaverse platforms would do well to take note of at least some of the fundamentals that have attracted traditional "real world" real estate investors and make some changes as they go along. and as they develop version 2.0 of the metaverse.

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In this article, we identify a few areas metaverse web designers should focus on to help them tap into the billions of dollars that traditional real estate investors invest in real estate each year. Getting the traditional real estate investment community to step off the sidelines and embrace virtual land as a viable real estate asset class may ultimately prove to be the driving force that helps the metaverse realize its full potential.

In the real world, location relative to landmarks or other desirable properties is what primarily determines land value. The fascination with proximity to Snoop Dogg's compound in The Sandbox has shown that the value of virtual lands in the metaverse will also be determined by location. Metaverse developers therefore need to place more emphasis on location on their platforms, including things like wayfinding and navigation, as well as landmarks like plazas and neighborhood plazas. /p>

Decentraland allows users to "teleport" to other properties using its chat feature. The Sandbox allows users to teleport from one location to another via the main platform map. While a convenient feature for users, teleporting ignores the importance of location and proximity in creating and enhancing value. At the same time, it relegates certain properties to the virtual desert. Additionally, the scarcity of landmarks on some platforms makes it difficult to distinguish between neighborhoods.

To help create virtual communities that also improve land values, platforms should instead adopt navigation methods that highlight the interconnectedness of properties. For example, install...