This article has been reviewed by Sumeet Sinha, MBA (Emory University Goizueta Business School). Should you have any inquiries, please do not hesitate to contact at sumeet@finlightened.com.
In this article, we will discuss how to invest in the metaverse, more specifically ‘How To Buy Land In The METAVERSE’. Metaverse is gaining popularity amongst technology enthusiasts and non-tech people alike. While there is an option for stock market investors to invest in the metaverse by buying shares of some publically listed metaverse companies’ stocks, some investors prefer to invest more directly by buying virtual assets.
Much like real-world real estate, there is virtual ‘real’ estate available in the metaverse – yes, pieces of land in the virtual 3D world that you can own. The ownership of such virtual land in the metaverse is established by an NFT (non-fungible token).
Page Contents
- What is Metaverse?
- How To Invest In The Metaverse?
- Who is Buying Land in the Metaverse?
- How Much Does Land in the Metaverse Cost?
- How To Buy Land in the Metaverse?
- FAQ on Land in Metaverse
What is Metaverse?
As we have discussed here:
Metaverse is a network of virtual worlds. It is a virtual three-dimensional world where people can get together and socialize and do things, even if the people live miles away from each other in the physical real world.
When the virtual worlds start becoming popular in games, workplaces, sports, concerts, and other forms of entertainment, the demand for specific locations in those virtual worlds might start going up. Think of an advertisement display on Times Square, New York – it’s in high demand because a lot of people are present there and see it. Similarly, in the virtual world, if a lot of people get together at a particular location, virtual real estate in that area will be in high demand.
With Covid pushing more and more workplaces to go digital, and Facebook renaming itself to Meta, it seems the concept of the virtual world is starting to enter the mainstream now. Earlier, virtual worlds were just a talk amongst the gamers, primarily.
How To Invest In The Metaverse?
There are many ways to invest in the metaverse – invest in metaverse stocks, metaverse ETFs, metaverse land, and other metaverse virtual assets. In this article, our focus is on investing in Metaverse land.
Invest In Metaverse Stocks
The first and probably the easiest way to invest in the metaverse is by buying stocks of companies that are either building the metaverse, building products & services for the metaverse, or somehow supporting the entire infrastructure that will help run the metaverse. We identified 18 good metaverse stocks to buy in a previous post. So, that would be a good starting point for stock market investors.
- MSFT – Microsoft
- FB – Facebook or Meta (the Ultimate Metaverse Stock?)
- AAPL – Apple
- AMZN – Amazon
- NFLX – Netflix
- GOOG – Google or Alphabet
- Metaverse Stock: Cloudflare (NET)
- Metaverse Stock: Fastly (FSLY)
- Metaverse Stock: Roblox (RBLX)
- Metaverse Stock: Take-Two Interactive (TTWO)
- Metaverse Stock: NVIDIA (NVDA)
- Metaverse Stock: Unity Software (U)
- Metaverse Stock: Digital Realty Trust (DLR)
- Metaverse Stock: Matterport (MTTR)
- Metaverse Stock: Qualcomm Incorporated (QCOM)
- Metaverse Stock: Autodesk, Inc. (ADSK)
- Metaverse Stock: Tencent Holdings Limited (TCEHY)
- Metaverse Stock: Adobe (ADBE)
Do your due diligence and see which of these stocks make sense to you and suit your investment style.
Invest in Metaverse ETF
If you are more of an ETF person and don’t want to research individual stocks, you may consider the Metaverse ETF. Just pay a small fund management fee, and let the fund manager take care of which metaverse stocks to invest in, and you just invest in the ETF itself.
One popular Metaverse ETF is the Roundhill Ball Metaverse ETF (META). The expense ratio (annual fund management fee) of this ETF is 0.75%.
Invest in Metaverse Real Estate
If the stock market is not your thing, and you want to be a direct investor in the metaverse, you can consider buying some digital assets in the metaverse. A popular investment is buying land in the metaverse. The process of buying land in the metaverse is not as easy as buying stocks or ETFs, but it is not that difficult either. We will go through the entire process step-by-step.
Who is Buying Land in the Metaverse?
According to a poll on Blind, which is a trusted community of verified professionals (mostly in the technology field), about 13.1% of the respondents said they are buying land in the metaverse. It’s not an overwhelming number, even amongst the tech enthusiasts, but not small enough to ignore. With the recent rise in the hype around NFTs (non-fungible tokens), more and more people are curious about owning digital properties such as images, gifs, and virtual real estate in the metaverse.
How Much Does Land in the Metaverse Cost?
Buying land in the metaverse can come with a hefty price tag. Since most of the metaverse gaming platforms are built on the Ethereum blockchain, you’d require some cryptocurrency to pay for virtual real estate. And the ‘registration’ or proof of the ownership of such land is in the form of NFTs.
While the transactions occur in cryptocurrencies, to put things into perspective, in US Dollar terms, the starting price of the smallest pieces of land in the metaverse was $13,000 according to a previous Fortune report. However, prices fluctuate all the time and can go higher or lower without any prior notice.
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How To Buy Land in the Metaverse?
Here are the 5 simple steps to buy land in the metaverse.
Step 1. Set Up Your Digital Crypto Wallet
Step 2. Select Your Metaverse or Virtual Real Estate Platform
Step 3. Connect Your Digital Crypto Wallet To Sandbox (or The Metaverse You Choose)
Step 4. Select The Piece of Land in Metaverse That You Like
Step 5. Doublecheck Details and Confirm Your Purchase
Step 1. Set Up Your Digital Crypto Wallet
For making a purchase of land in the metaverse, you will need cryptocurrency in a digital crypto wallet. Metamask is a popular cryptocurrency wallet you can consider. There are other wallets as well, and depending on the Metaverse platform you choose, there may be other compatible wallet options. Metamask works with Sandbox and Decentraland, the two most popular ones.
Step 1a. Go to the Metamask website. Click on ‘Download’ to get started with the setup.
Step 1b. You will see three options – for Chrome browser as a Chrome extension, iOS app, and Android app. For this demo, we are choosing to install the Chrome extension.
Step 1c. When prompted, click on ‘Add to Chrome’ to install the extension. For this to work, make sure you are using Google Chrome browser on your desktop or laptop.
Step 1d. If you are new to MetaMask, you can create a new wallet and a ‘Recovery Phrase’.
If you already have a MetaMask account, you can import your wallet here.
Step 1e. Understand what pieces of information MetaMask stores, and how it uses them.
Step 1f. Create a secure password and complete the account creation.
Step 1g. Make sure you understand the importance of proper security of the Secret Recovery Phrase. Reveal your recovery phrase, store it in a very secure place, and do not share it with anyone.
Step 2. Select Your Metaverse or Virtual Real Estate Platform
As the Metaverse continues to evolve, there might be more and more virtual worlds coming up. As of today, there are four popular virtual worlds where you can buy land – The Sandbox, Decentraland, Somnium Space, Cryptovoxels, and Worldwide Webb.
The Sandbox
Sandbox is a platform for digital creators to buy and sell digital ‘voxel’ assets. A ‘voxel’ is a combination of words “pixel” + “volume”, essentially referring to a 3-dimensional pixel (or a pixel with some volume). Sandbox has its own cryptocurrency as well, called $SAND. You can purchase land on the Sandbox marketplace using ETH and some other assets using the $SAND token as well.
Decentraland
Decentraland is another popular metaverse where you can buy virtual land. The cryptocurrency that you can use on Decentraland to buy virtual real estate is $MANA (Decentraland’s cryptocurrency). Before using the Decentraland marketplace, make sure you connect your digital wallet. Decentraland supports connection with MetaMask as well as Ledger hardware wallets.
Somnium Space
Somnium Space is a virtual reality world developed on the Ethereum blockchain. You can even take a virtual 3-D walking tour of some properties as a guest using the Somnium Space Web application. It has a marketplace (powered by OpenSea) where you can buy land in the metaverse using ETH tokens. There is also an option on Somnium Space to buy virtual land directly using a credit card.
Cryptovoxels
Cryptovoxels is a virtual world built on the Ethereum blockchain. There are cities, streets, art galleries, malls, etc in this city. You can ‘teleport’ to a location in this metaverse and walk around. You can buy land in this metaverse using ETH tokens.
Worldwide Webb (yes, it has 2 B’s)
You can also buy land in the metaverse game ‘Worldwide Webb’ using ETH tokens. The ‘buy land’ button will take you to OpenSea where you can make the purchase.
Step 3. Connect Your Digital Crypto Wallet To Sandbox (or The Metaverse You Choose)
MetaMask is a popular one, but there are multiple other choices of wallets that can be connected to the Sandbox – such as Coinbase wallet, Walletconnect, Bitski, etc.
Buy and/or transfer some ETH to this wallet to make a purchase.
Step 4. Select The Piece of Land in Metaverse That You Like
For example, let’s take a look at this piece of land which is on the cheaper side, costing just 2.635 ETH (or US $7,786).
Step 5. Doublecheck Details and Confirm Your Purchase
Before finalizing the purchase of the land in the metaverse of your choice, make sure everything seems alright, and proceed with the transaction.
FAQ on Land in Metaverse
Are There Any Metaverse Real Estate Brokers?
Yes, there is a Metaverse Real Estate Broker service, if you are interested.
Are There Any Mortgages Available For Metaverse Land?
Yes, since the price of virtual real estate can be hefty, there is a mortgage service also available to buy land in the metaverse. TerraZero is one such Metaverse mortgages provider for virtual real estate.
What Are The Risks of Buying Land in the Metaverse?
Buying land in the metaverse is an investment. As with any other investment, this also carries certain risks. The first, and most obvious, risk is that all of this is virtual and there is no ‘utility’ of the virtual real estate in the real world, so a lot of people may not see any tangible value in your metaverse land.
The second risk is of lack of quantity constraints. For example, you buy a super expensive piece of land in Decentraland, and 5 years from now, someone else builds another ecosystem and sells more and more land and buildings in that virtual world. The risk is that the value of the virtual assets can erode quickly if more and more developers start creating an infinite virtual real estate.
Can I rent Out My Land in The Metaverse?
Yes, Sandbox allows owners of the virtual land parcels to rent them out as well. So, create a private contract, and rent out your virtual real estate!
For Informational Purpose Only. This Is Not Investment Advice.
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