By Ondřej Dobruský, CEO and co-founder of Victoria VR
Land has forever been intrinsically valuable to humanity, synonymous with prosperity and security. Besides generating high returns from rents and leases, individuals rely heavily upon land as an inflationary hedge. But real estate has its own set of disadvantages.
Property investments require a significant amount of upfront capital, locking the money for long durations. Apart from illiquidity, fractional real estate ownership is still a distant dream in the industry. Moreover, ownership and transfer of land deeds are mired in bureaucratic red tape, causing a significant loss of time and resources. However, NFTs and blockchain technology are addressing the flaws in the real estate sector.
NFTs are pushing for phygitalization, thus opening up a new horizon in property transactions using technological innovations. People like Leslie Alessandra are resorting to NFTs for the speed, transparency and security they provide to real estate deals. NFT-based technologies also ease property sales by eliminating intermediaries and reducing dependence on complex paperwork.
Leslie sold her five-bedroom home in Tampa, Florida, for $650,000, with the winning bidder receiving an NFT deed and the physical house. TechCrunch Founder Michael Arrington, sold his apartment in Kyiv, Ukraine, through an NFT deed for $113,176. ONE Sotheby followed suit with the sale of the ‘MetaReal’ mansion, offering the physical home in Miami and its digital tokenized counterpart in The Sandbox.
NFTs are also introducing more liquidity into the real estate market by tokenizing home equities and fractional ownership. Homeowners can now interact directly with investors and access financing opportunities without suffering complicated banking regulations. Industry veterans are thus leveraging NFTs to improve products and services in the real estate sector. Simultaneously, consumers are adopting NFT-based virtual properties as the next stage of real estate investments.
Transforming Real Estate With Digital Lands
Virtual lands in the metaverse are increasing, with digital land sales surpassing $500 million in 2021. A Gartner report has predicted that, by 2026, nearly 25% of people will spend at least an hour in the metaverse daily. Thus, users will increasingly need their own digital homes. Web3 enables users to purchase virtual land in the metaverse and customize their immersive worlds from scratch.
Grayscale expects the metaverse to generate $1 trillion in annual revenue, while Goldman Sachs and Morgan Stanley predict an $8 trillion market. Mimicking real-world land scarcity, metaverse properties derive their value from proximity to upscale virtual locations.
Posh digital spaces have better amenities and the presence of major brands and companies. Consequently, virtual plots sell for as much as $2.4 million, with the most expensive property recording $4.3 million.
Snoop Dogg bought a digital land for virtual concerts, online events and parties; it’s called Snoopverse. The virtual location is so valuable that a neighboring plot sold for $450,000.
Artists like Paris Hilton, Justin Bieber, Ariana Grande and DJ Marshmello have already performed in virtual concert arenas. Mainstream companies like JP Morgan Chase, HSBC Bank, PwC Hong Kong, Samsung and Adidas have also purchased digital properties in the metaverse. And this eagerness to buy virtual properties is because NFT-based virtual lands create novel ways of revenue generation.
Unlocking New Revenue Streams
Metaverse users can rent their virtual property as digital office space for hosting online conferences and meetings. The possibilities are endless since property owners can design games for conference attendees to play and earn during breaks. Owners can also build digital storefronts and shopping spaces for virtual retailers. Similarly, they can develop and rent out concert and sports arenas, museums, and galleries.
Digital spaces also provide opportunities for advertising products and services to extend a brand’s footprint in the metaverse. Landowners can set up billboards on their property and virtual conference rooms or arenas. Owners can fix the time frame when the algorithm automatically transfers the rent to their wallets directly, without interference from intermediaries.
Users can design Play-to-Earn (P2E) games on their properties using in-platform developer tools and innovative SDKs. Game owners can then invite players to these spaces, earning revenue from the games. On the other hand, property owners can mortgage their virtual property to acquire loans in fiat or cryptocurrencies.
Victoria VR: Easing Digital Land Adoption
So much for new opportunities and revenue streams. But easier access and lower entry barriers are key to realizing the full potential of virtual lands and real estate. Victoria VR is oriented towards this goal, innovating diverse ways of purchasing virtual land. We also introduce novel revenue streams through our Unreal Engine-powered, blockchain-based virtual reality platform.
Our metaverse comprises 168,000 virtual land plots, spread across nine types and six different tiers where users can build utility buildings, presentation spaces and private buildings. We thus provide an ideal digital environment for real estate development and pave the way for a thriving token economy.
Overall, NFT-based digital lands will inaugurate a new era in the real estate sector. With the NFT market surpassing $40 billion in 2021, investors are bullish about this domain’s growth. The time is ripe for retail investors to buy digital property before skyrocketing prices make lands inaccessible. Our mission is to make the adoption process seamless, which will ultimately lay the foundation for futuristic, metaverse-oriented, digital (real) estate.
About the author:
Ondřej Dobruský is the CEO & Co-founder of Victoria VR, a gaming and Virtual Reality enthusiast and developer since 2010 and a Game Architect since 2018. Ondřej has over 16 years of experience inventing new technologies, solutions and applications. Victoria VR is the first Blockchain-based MMORPG in Virtual Reality with Realistic Graphics built on Unreal Engine, created and owned by its users.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.