Hundreds of millions of euros are spent on virtual land. In digital environments, people are speculating in soil, but they are also working on real estate projects. How does it really happen?
A few weeks ago, the American Yuga Labs sold virtual land for 320 million euros. Yuga Labs is known for Bored Ape Yacht Club (BAYC) crypto tokens and is valued at $ 4 billion. Now the company is working on a metaverse, a set of interconnected digital environments. There, users can play and build games, attend music performances or simply have a retreat for their social contacts. Yuga Labs is just one of the many parties involved in virtual land and digital worlds.
- Hundreds of millions are involved in the world of virtual real estate.
- This property makes full use of blockchain technology, including NFTs.
- Big brands are establishing themselves in blockchain worlds, such as The Sandbox and Decentraland.
- Buyers face many choices: which world, which district, how to secure, how to build?
- Certain worlds can also rent or hire an event agency.
With the advent of non-fungible tokens (NFTs, digital property ownership), ‘virtual land’ is taking on a new dimension. With these NFTs, a piece of virtual land is uniquely recorded on a blockchain, where this data is inevitably stored on a worldwide network of computers. These NFTs can be traded on specialized marketplaces.
What exactly is the metaverse? How will it change our lives and work? In addition to participating in exclusive parties, can you also invest, build and invest there? Who sets the rules in this new virtual world? Which Belgian companies have already discovered the possibilities in the meta-verse? De Tijd guides you through the meta verse with articles and podcasts. Follow everything in our ‘Start to metaverse’ file.
We looked at developers building virtual real estate projects and asked them where and how they build.
Select a plot
In the co-creation hub Hangar K in Kortrijk, Stefan Colins looks at a lattice map. The small grids are packed with large colorful blocks with brand names like Atari, Adidas Originals and Ubisoft. “The grids are plots of land,” Colins says. The map is from The Sandbox, a virtual world owned by Animoca Brands from Hong Kong. Colins works for the Flemish blockchain technology company Venly, where he is responsible for partnerships and community building. Venly ensures that gaming companies and e-commerce platforms can integrate blockchain applications. At the same time, the applications must be as user-friendly as possible. The Sandbox is one of their customers.
The sandbox has already convinced many big brands to buy land. Including the Belgian comic book success De Smurfen. Is land still affordable for ordinary individuals? After a bit of searching, Colins finds a plot for 1.6 ether, the cryptocurrency in blockchain Ethereum. At the time of the conversation, the exchange rate for an ether is 2,900 euros. That is about 4,640 euros for a plot of 96 times 96 meters. ‘It’s still possible,’ says Colins, though it must be said that the transaction costs, the ‘gas fee’, on Ethereum can be very high. In Yuga Labs’ property sales, the transaction costs were the same as the price of the land itself.
Colins reviews the land deals on the large NFT marketplace OpenSea. To get there, he clicked on an OpenSea link on The Sandbox’s website. “It is not recommended to do a random search for ‘The Sandbox’ on OpenSea because you could be cheated with a fake offer,” warns Colins.
If you are organizing events or other experiences with tickets, it is important to attract passers-by.
There is already a whole range of blockchain worlds. Decentraland already existed before The Sandbox. You can also call Vegas City, a project that rents out land and organizes events at the request of businesses.
What a neighborhood
Suppose we choose The Sandbox. Where exactly on the map do we buy our land? The price depends on the neighborhood. A plot next to rapper Snoop Dogg’s project costs 250 ethers, a few weeks ago well worth 725,000 euros. “It’s already a solid lump,” Colins says dryly. When you buy it, it will go into your crypto wallet. “At The Sandbox, 75 percent of users use a Venly purse where they can fall back on our help desk,” says Colins. Others prefer to hold everything in their own hands and use the MetaMask wallet. Large cryptocurrencies are often placed in separate hardware to give hackers no chance.
But why is the place so important in a purely digital environment? ‘If you are arranging events or other experiences with tickets, it is important to attract passers-by,’ explains Colins. And it’s like in the physical world: If you choose a prestigious shopping street where the best fashion stores want to be present, then there is a huge price tag.
The sandbox provides a kind of digital Lego box with windows, doors and animations. Programming is not required.
How to build
But how do you build something in Sandkassen? Like Decentraland, The Sandbox has its own software to build. “I think it’s very user-friendly,” says Jorden Van Valckenborgh of Digital Arts and Entertainment (DAE) at Howest. He is an intern at Venly. The sandbox provides a kind of digital Lego box with windows, doors and animations. Programming is not necessary. ‘ He clicks and pulls on his screen. Templates take you by the hand and teach you about specific components such as text and role-play dialogues. Creators on Roblox or Minecraft, the two main Sandbox games, may have a little trouble with that.
For TCG World, another NFT world, Venly made a 256 by 256 meter clubhouse. Separate software was chosen to create virtual environments, Blender. On-site installation involves some additional complications, but nothing that Van Valckenborgh cannot solve. There is an entrance hall, staircase and more than enough space to arrange events.
MetaRing owners gain access to special zones with DJs, where exclusive launches, ‘drops’ in the jargon, from NFTs take place. MetaRingen is an NFT that acts as a kind of passport and provides access to exclusive events. It can be used in about 15 digital environments. Venly is building a clubhouse for the owners of a MetaRing in various metavers. The clubhouse can also be used by brands. “That way, they can test the environment without immediately spending 100,000 or 200,000 euros,” says Colins.
At Snoop Dogg’s property in The Sandbox, you can see a similar model in action with a pass with early access worth $ 1,300. You then get access to NFT drops, eg from a virtual bulletproof vest.
Metaverse and blockchain
In The Sandbox, the avatars’ grounds, buildings and possessions are NFTs. But what if the world itself disappears? Then you still have the NFTs in your wallet, but you can not get the digital gadgets to work in another virtual world yet.
‘The community is big’, Colins reassures us. There are big parties that could simply take over The Sandbox. At Decentraland, it is DAO, a decentralized independent organization, that oversees the governance of the world. Sandboxen now has a community of builders and investors. That world is still in an alpha phase, the public only gets access for short test periods.
Still, it’s still a mystery why brands pay big bucks for a world like The Sandbox, which has not opened yet. Or to Decentraland, where few people walk around during the day. Events such as Fashion Week or the Australian Open Tennis High Fair are crowded in certain neighborhoods.
‘Brands will not miss the young generation. If the metavers of the future have to do with blockchain and NFT, then they already want to be there now, “Colins said.