Aug 30 2022
7 Barriers to Metaverse Real Estate + How to Overcome Them
The following content is a collaboration between VerseProp and
Crossmint, the easiest way to buy NFTs.
When any new technology begins to bubble up, everyone from the skeptics to the scaremongers has negative words to say. People used to think Korean cars were rubbish and
microwaves give you cancer. Some people still do. So we’re writing this blog to ensure that a similar level of misunderstanding doesn’t sully the
metaverse real estateindustry. In the next few paragraphs, we’ll address the perceived barriers and issues that unjustifiably deter people from metaverse real estate, accompanied by a sound solution to said difficulties.
#1 it’s not “real” real estate
Is real estate "real" if your physical body can’t live in it or interact with it? Could calling it real estate mislead people about its value? The image of the safe investment that surrounds traditional real estate in no way applies to metaverse real estate.
Edward Castronova, a media professor at Indiana University, the “current metaverse real estate boom is a speculation market,” with very little content or real value within these metaverse real estate environments. However, many disagree…
Correct, it’s not real estate… But that doesn’t matter
We’ll put our hands up and admit that the term “real estate” is slightly misleading when applied to the Metaverse. Yes, like its real world sibling it’s a segment of “land” that the owner can use as they please. But functionally and in terms of value, metaverse real estate has more in common with a media space.
Much of it may not have any “content” just yet, but that’s the point. It’s a blank slate. It’s not land or digital physical property. It’s a highly versatile, programmable media space. One where anything from advertising, to games, to
concertscan be created. And in many cases already has been.
Metaverse real estate is a media space that - if you’ve done your homework - will attract serious traffic on account of its location. It’s a bit like buying a section of somebody’s social media feed but with the 3D interactivity element thrown in.
#2 it’s brand new and few know much about it
As a general rule, it’s unwise to invest in what you don’t understand. Metaverse real estate is very much in its infancy and miles from being an easily understood asset class like regular real estate or other traditional investment routes like commodities or stocks.
The market is maturing and quality education exists
Most of us are still finding our feet in this industry. But there’s a laundry list of reputable, established names, all betting on the success of the Metaverse. Big consumer brands like
Amazon, and Walmartare all making serious moves; showing every indication that the Metaverse won’t just be a fad and won’t be new and strange for long. On the education and guidance front, VerseProp is here to be the resource for guiding you through this new territory. And when
our marketplace advisory service launchesyou’ll have a roster of metaverse real estate experts at your fingertips to help you answer any queries you might have.
#3 it’s volatile and risky
Nearly all the major metaverses are decentralized and tied to crypto assets and their value has
fluctuated wildly. Following on from the previous point, there’s no escaping the fact that crypto, NFTs, and metaverse real estate are all new, wild, thinly understood assets with little to no regulation - unlike more traditional financial products. There’s little in the way of a guarantee that your metaverse real estate will appreciate in ten years, let alone be worth a similar amount month to month.
The novelty of most metaverse businesses also means your investment could disappear rapidly should the metaverse platform in question go under; they’re all very much in the start-up phase so this isn’t unlikely.
It’s volatile for now… But that’s part of the fun
Like the internet in the early 90s, the Metaverse is young and naive. All the businesses are finding their feet. Valuations are - quite understandably - all over the place and whilst that can be stressful it can also be very lucrative for the investor willing to do their research and take a bit of a risk. The nascent market and the current crypto winter mean there are low barriers to entry and with average parcel sizes around the $5,000 mark, people can
buy the dipand start playing a game that’s much easier to get into than traditional real estate.
There are definitely bubbles forming. But the bubbles and the volatility will subside long-term once regulations come in and market participation evolves. Plus, in the short to medium term, a platform like VerseProp can give you the best information out there and help you manage your portfolio - and your risk - as professionally as possible.
#4 it’s a small market
What kind of opportunities are there when only around 25,000 individuals own metaverse real estate? How much liquidity is available? How much of that 25,000 is actually being traded and profited from? It seems like only big institutions and whale investors with money to burn are bothering.
The market may be small but the right platform can maximize opportunity
Until now buying metaverse real estate has been rather disjointed and fragmented. You can only buy it directly from metaverses or from platforms that sell other NFTs like OpenSea. This means the perceived diversity of land options and ease of purchase is squashed.
As of December 2022, VerseProp will be a supermarket for metaverse real estate. A platform that aggregates all the opportunities you’d normally have to hunt down individually. As mentioned, VerseProp will also offer expert guidance on metaverse real estate purchases, helping people make decisions more easily. This removes previous sources of friction around buying, selling, and renting: this will increase liquidity and make the market more attractive to newcomers. Add to this VerseProp’s onboarding of reputable institutions (watch this space for more info), and we should see an influx of new metaverse real estate investors.
It should also be noted that regardless of VerseProp’s input, the aforementioned big names are the starting point for market expansion. Once the mainstream experiences the Metaverse’s potential - both for businesses and consumers - there’s little chance of the market remaining limited to the size it currently is.
#5 an interest in crypto is key
Aside from a few metaverse platforms like Fortnite, these
online worldsare decentralized and therefore have their economies powered by crypto. This means users will need a crypto wallet to participate. But crypto isn’t for everyone though. Some people are scared by it. And some people are so confused by it that they barely have the energy to hate it.
You don’t need to touch crypto if you don’t want to
With Crossmint you can purchase any NFT and any piece of metaverse real estate you choose without the need for a crypto wallet. All you need is a credit card and an email. If you so desire, crypto can remain 100% divorced from your consciousness. By removing the barrier of buying crypto, using exchanges, and setting up Web3 wallets, new users can move right into their home in the metaverse without any hassle.
#6 Seeing a return on your investment can feel too far removed
As mentioned, this isn’t a traditional investment like stocks and shares and it’s certainly not traditional real estate; both assets that can offer returns in the short to medium term. With such high levels of volatility and our current crypto winter, it can feel like you’re throwing money into an abyss. Thankfully VerseProp has a workaround.
VerseProp can help you rent out your land to a qualified network
In VerseProp’s bid to professionalize the industry, we’ll be offering a metaverse real estate rental service to a cohort of quality, preselected tenants. This means you can start seeing a return on your metaverse real estate ASAP.
#7 it’s expensive
You may have heard the
news. Metaverse real estate has been fetching some high prices. And although those prices have cooled in recent months, plenty of people will be priced out of this game.
There are still some great deals going and VerseProp will be the first place you can hear about them
As mentioned earlier, the average parcel size is around $5,000. And when our marketplace platform launches in Q4, the most affordable deals can be directed straight to your inbox. You can view benchmarks and set value parameters to make the most informed decision possible and ensure you avoid overpaying.
As you can see, many of the issues and barriers around metaverse real estate and NFT purchases are myths and misconceptions that VerseProp can help neutralize. In other instances, these barriers will dissolve naturally as the market matures and regulators make it mainstream-friendly.
If you’re ready to embrace the world of NFTs and metaverse real estate but you’re not quite ready to go full crypto, click
hereto familiarize yourself with Crossmint’s service. And if you would like to learn more about metaverse real estate click below to sign up to VerseProp’s mailing list.
When you sign up you’ll be first in line to receive VerseProp’s content, educating on all areas within the metaverse real estate world. Click below to sign up and get front row seats to the metaverse real estate show.