ITEM: The metaverse is experiencing a virtual real-estate boom that’s a lot like real life: it’s so expensive that most people can’t afford it. DAOs promise to make metaverse real estate ownership more accessible, but it’s too early to know if this will actually work.
Late last year, a metaverse platform called Decentraland sold a prime plot of virtual property for the equivalent of $2.4 million dollars. Other parcels of digital land sell for at least six figures. In December, JPMorgan (which also has a plot in Decentraland) noted that the average price of a parcel of virtual land in metaverse platforms such as Decentraland, The Sandbox, Somnium Space and Cryptovoxels doubled in the second half of 2021 from $6,000 to $12,000. Earlier this month, HSBC bought a plot in The Sandbox for an undisclosed sum that is believed to be on the pricey side.
Meanwhile, Hong Kong property tycoons and brokers are also snapping up virtual real estate (which is never a good sign for those of us who aren’t property barons) largely so they can cash in on the high valuation growth.
You get the idea.
What does that mean for the 99% of us that don’t have that kind of money to throw around? According to this article from IEEE Spectrum, the answer may lie in metaverse DAOs (decentralized autonomous organizations), which purchase, sell, and hold blockchain assets (such as virtual land).
For example, MetaOasis – a DAO project that focuses on metaverse real estate investment and development – offers tokens to people who want to invest in digital property. From the press release (via Cointelegraph):
The DAO tokens enable the holder exposure to land ownership of the DAO and to share the profits of the project in the future. Secondly, MetaOasis DAO offers a lower entry barrier option. Instead of purchasing land directly, which often requires substantial capital, anyone can obtain exposure to metaverse land investment and development by holding MetaOasis tokens which can be bought or earned by contribution.
The trick is that because it’s early days for the metaverse, it’s unclear how this will work in practice. A number of DAOs have been set up for metaverse real estate access – apart from MetaOasis DAO, there’s also PangeaDAO and EnterDAO – but while they’ve acquired quite a bit of metaverse real estate, they haven’t yet done much with it.
An obvious problem is that no one’s really sure just what they would need a metaverse plot for in the first place – apart from the speculators who want to profit from it, and major corporations who want to boost their brand in the metaverse.
But then, we remember the companies who set up storefronts in Second Life for the same reason, which turned out to be a classic Field of Dreams scenario, only few actually showed up. We’re assured the metaverse won’t be like that. Which is nice.
But for now, metaverse real estate looks likely to be a game for people with deep pockets, while all the talk about DAOs may turn out to be another example of how decentralized platforms often turn out to be more centralized than they look.
Read more at IEEE Spectrum.