Understanding The Value Of Metaverse Land

Blockchain technology is at the forefront of promoting various projects with its functionalities. This masterpiece technology has recorded considerable successes in multiple industries like Finance, Logistics, Arts, Entertainment, Sport, Gaming, and much more. In the financial realm, it started with fueling numerous cryptocurrencies, promoting DeFi protocols, and facilitating the advent of NFTs before crossing over to Metaverse and Web 3.

What is Metaverse?

Metaverse translates into virtual verse, i.e., a virtual world or environment where humans can explore the virtual world, experience their fantasies, and more, irrespective of their geographic location. Not only that, Metaverse has been an excellent tool for corporate organizations to conduct their various seminars, conferences, symposia, and lots more. Like many other blockchain projects, Metaverse fills a void in users' needs and strengthens other blockchain-based projects' functionalities.

Among all blockchain-based projects, Metaverse seems exclusive due to its interconnections with other previous projects. On Metaverse, avatars used as human persona is an NFT (tokenized digital arts or objects) purchased or exchanged with cryptocurrencies. The use cases of Metaverse seem endless as more functionality is being discovered. One of the most valuable aspects of Metaverse is its virtual real estate, where virtual lands are sold to investors.

In real-world real estate, landed property is a significant asset edging the industry towards a vast fortune. Like in the real world, land has been a profitable asset worthy of investing in in the Metaverse due to its potential use cases. These parcels of land can earn their investors sizeable ROI because they can be purchased as NFTs; while also claiming royalty on secondary sales of these lands. They can also earn investors passive income through rental and other economic use cases yet to be discovered.

Do you also wonder where these virtual lands are getting their value?

Well, I have an answer to your doubt which will alleviate your fear and curiosity about Metaverse lands.

How Lands are Valued on Metaverse

In our natural world, lands are valued based on their sizes, locations, and other economic factors, like their use cases. Like in the real world, the same factors responsible for attracting value to lands and real estate, in general, are also applicable to lands in the virtual space. Virtual lands are valued based on their respective locations, sizes, and utility. Below are how these factors determine the value of lands on Metaverse.

1. Land Size and Dimension Metaverse land size and dimension reflect land's length and breadth, which is directly connected to the aggregate value of such land. You'll also agree that a 16m x 16m virtual land will not have the same value as 12m x 12m, with other factors being equal. So the land size commensurates its value in the Metaverse; the larger the magnitude, the higher the price.

   
   

2. Location of the Land Similar to conventional real estate, the location of land in the Metaverse is also vital. Like lands are more valuable in highbrow cities than other lesser regions, lands strategically situated close to major hubs or big brands are usually worth more than others far away or isolated from them. For example, lands closer to The Sandbox Map or Genesis Plaza in Decentraland are worth more than others afar from them because these two are active locations in the Metaverse. Furthermore, lands closer to notable brands on Metaverse like Adidas, Nike, Gucci, Coca-Cola, Walmart, Samsung, Hyundai, Louis Vuitton, etc., are valuable and worth more than those afar. This is because these notable brands are in commercial hotspots where their stores are situated; the closer a parcel of land is to them, the higher its value.

Depending on the choice, proximity to in-demand natural landscapes like beaches could also attract value to lands within such landscape perimeter.

3.      Land Utility

The land utility is another factor that attributes value to parcels of land in the Metaverse; it is a function of what can be developed on such lands for appreciable ROI. Generally, utility is the main factor driving value to Metaverse (lands and other Metaverse objects). It concerns the economic architecture of landowners/investors regarding their lands. As an investor, you can develop real estate as an arena for public events, retail outlets for virtual stores, etc., and rent them out to users.

There are various use cases of virtual land, which also determines how those lands are valued regarding their locations. The following are virtual land use cases.

i.                    Virtual Game

Play-2-Earn (P2E) games thrive on the Metaverse; they are the frontrunner that promotes the Metaverse to further utilities. Lands on Metaverse can be developed as a gaming environment where users can play and earn. Atari, a gaming platform, took this initiative when it purchased land in The Sandbox. On September 26, 2022, retail giant Walmart announced its debut into Metaverse with "Walmart Land" and "Walmart's Universe of Play" on Roblox (another Metaverse gaming platform).

ii.                 Virtual Stores

Virtual stores are similar to physical stores where commodities can be purchased, but only virtual products and merchandise are sold in virtual stores. These merchandises exist as NFTs, which include fashion accessories like footwear, headwear, glasses, clothing, etc. Brands like Samsung, Nike, Adidas, Gucci, DKNY, and many other brands already have their stores on various metaverse platforms.

iii.               Entertainment

Metaverse as a virtual world was not shut out of entertainment due to its euphoria and relaxation. Entertainment is also booming in the Metaverse, especially the music industry; artists like Travis Scott, Ariana Grande, and Marshmello have separately performed on Fortnite, a metaverse platform. On Roblox (another metaverse platform), Soccer Mommy and David Guetta have separately performed, Post Malone performed on Horizon World and Daler Mehndi on Somnium Space.

Conclusion

Virtual lands drive their value mainly from their utilities alongside other factors like location and size. This doesn't mean there can't be other factors responsible for adding value to virtual lands in the nearest future; the Metaverse is a digital world susceptible to dynamic trends.