By Ondřej Dobruský, CEO and co-founder of Victoria VR
Land has always been an intrinsic value for humanity, synonymous with prosperity and security. In addition to generating high returns from rents and leases, individuals rely heavily on land as a hedge against inflation. But real estate has its own disadvantages.
Real estate investing requires a significant amount of upfront capital, which ties up the money for long periods of time. Illiquidity aside, fractional ownership of real estate is still a distant dream in the industry. In addition, ownership and transfer of land deeds are fraught with bureaucracy, resulting in a significant loss of time and resources. However, NFTs and blockchain technology are remedying the shortcomings in the real estate sector.
Pushing phygitalization, NFTs are opening up new horizons in real estate transactions with technological innovations. People like Leslie Alessandra resort to NFTs speed, transparency and security They offer real estate deals. NFT-based technologies also make real estate sales easier by eliminating intermediaries and reducing reliance on complex paperwork.
Leslie sold her five bedroom home in Tampa, Florida for $650,000 with the winner receiving an NFT certificate and the physical home. TechCrunch founder Michael Arrington sold his apartment in Kyiv, Ukraine through NFT deed for $113,176. ONE Sotheby followed with the sale of the “MetaReal” mansion, offering the physical home in Miami and its digital token counterpart in The Sandbox.
NFTs also bring more liquidity to the real estate market by symbolizing home equity and fractional ownership. Homeowners can now interact directly with investors and access financing opportunities without suffering from complicated banking regulations. Industry veterans therefore use NFTs to improve products and services in the real estate sector. At the same time, consumers are adopting NFT-based virtual real estate as the next tier of real estate investing.
Transformation of real estate with Digital Lands
Virtual lands in the Metaverse are increasing, with digital land sales set to surpass $500 million in 2021. A Gartner report predicts that by 2026, nearly 25% of people will spend at least an hour a day in the Metaverse. Users therefore increasingly need their own digital home. Web3 allows users to purchase virtual lands in the metaverse and customize their immersive worlds from the ground up.
Grayscale expects the Metaverse to generate $1 trillion in annual sales, while Goldman Sachs and Morgan Stanley forecast an $8 trillion market. Metaverse real estate mimics real-world land scarcity and derives value from its proximity to upscale virtual locations.
Sleek digital spaces have better amenities and the presence of big brands and corporations. As a result, virtual properties sell for up to $2.4 million, with the most expensive property registering $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 property was sold for $450,000.
artists like Paris Hilton, Justin Bieber, Ariana Grande and DJ Marshmello have performed in virtual concert arenas. Mainstream companies such as JP Morgan Chase, HSBC Bank, PwC Hong Kong, Samsung and Adidas have also acquired digital assets in the Metaverse. And this eagerness to buy virtual lots is because NFT-based virtual lands are creating new revenue generation opportunities.
Development of new sources of income
Metaverse users can rent their virtual properties as digital office space for hosting online conferences and meetings. The possibilities are endless as 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. They can also develop and rent out concert and sports arenas, museums and galleries.
Digital spaces also provide opportunities for promoting products and services to expand a brand’s footprint in the metaverse. Landowners can set up billboards on their property and virtual conference rooms or arenas. Owners can set the time frame for the algorithm to automatically transfer the rent directly to their wallets without the interference of 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 areas and earn revenue from the games. On the other hand, property owners can pledge their virtual property to acquire loans in fiat or cryptocurrencies.
Victoria VR: Facilitating digital land adoption
So much for new opportunities and revenue streams. But easier access and lower barriers to entry are key to realizing the full potential of virtual land and real estate. Victoria VR is guided by this goal and develops various ways of acquiring virtual land. We’re also introducing new revenue streams through our Unreal Engine-powered, blockchain-based virtual reality platform.
Our metaverse includes 168,000 virtual lots, divided into nine types and six different levels, on which users can build utility buildings, showrooms and private buildings. We thus offer an ideal digital environment for real estate development and pave the way for a flourishing token economy.
Overall, NFT-based digital countries will usher in a new era in the real estate sector. With the NFT market set to surpass $40 billion in 2021, investors are optimistic about the growth of this space. The time has come for retail investors to buy digital property before skyrocketing prices make land inaccessible. Our mission is to make the adoption process seamless, which will ultimately lay the foundation for futuristic, metaverse-oriented digital (real estate) properties.
About the author:
Ondřej Dobruský is CEO and co-founder of Victoria VR, gaming and virtual reality enthusiast and developer since 2010 and game architect since 2018. Ondřej has over 16 years of experience in developing new technologies, solutions and applications. Victoria VR is the first blockchain-based virtual reality MMORPG with realistic graphics powered by the 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.