What is the value of virtual land?

4 Min Read

Due to its scarcity, land tends to rise in value in the actual world This is also true in the metaverse. According to Metaverse Group, there are only 166,464 plots of land available in The Sandbox. 96 × 96 meters are the basic dimensions of each basic unit. Only 44,000 of the 90,601 plots in Decentraland, which is controlled by a decentralized autonomous organization, are designated for individual purchases and sales.

If additional land were to be released by Decentraland as a decentralized autonomous organization (DAO), all currency holders as well as all landholders would have to vote in favor of it, Sugarman explained. “I don’t think it’s possible for us to destroy the value of our property and money since the community doesn’t want us to. There must be some compelling justification for such an action.”

Each Decentraland parcel is 16 × 16 meters in size and is an NFT. MANA, the platform’s native token, is used to determine the price of the land. Over the course of the year, the price of MANA has risen by more than 4,300% and was last trading at $3.41 on Friday. After a 14,000% surge in 2021, the Sandbox’s SAND token is now trading at $5.05. Metaverse coins, like other cryptocurrencies, are susceptible to huge price fluctuations.

“Comps,” or comparables, are used by the corporation in determining virtual-land valuation, according to former investment banker Sugarman.

“OpenSea and other marketplaces are used for pricing comparisons. This is where we begin. We consider the potential for foot traffic and the yield that may be obtained “Then, he said. All customary parameters from the actual world are taken into consideration in order to arrive at an appropriate pricing.

Some real-world criteria, like as foot traffic, aren’t quite applicable in the metaverse, according to the Republic Realm team’s assessment approach.

Her response: “You could want to have a look at monthly active users, although presently there aren’t too many,” she replied. Yorio remarked that venture capitalists’ valuation methods are useful because most metaverse platforms haven’t debuted yet.

“You learn about the founders’ backgrounds through interviewing them. As long as they’ve released a popular video game in the past, that’s a good indicator “she said. “Game designers are highly skilled software engineers, but they also need to be adept at marketing their creations successfully. Even if they create the finest game in the world, it will be a failure if no one knows about it.”

Fantasy Island, a luxury property development in The Sandbox, is one of Republic Realm’s initiatives. As part of its multi-billion dollar acquisition with Atari, it intends to collaborate on game creation. Yorio says tracking early talk about metaverse initiatives on social media is another way to estimate the value of digital land.

“I want to acquire some land so that I can start building. You can only enjoy your time in the metaverse if you have a variety of activities, sights, and people to see “she stated.

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Posted by Alex Vartmann
Web3 guru, and enjoys sugary liquorice.