There’s a Real Estate and property boom happening in the Metaverse
Newsletter #2 - December 13th, 2021
Thank you for coming to and for reading this Newsletter. We are just getting started and still shaping the format, but if you find the content interesting or valuable, please do comment, share or subscribe. You’ll get a weekly update on what’s happening along with a different thought piece every week.
Now onto the content.
In many parts of the world 2021 has been an incredible year for real estate. In the US for example prices increased by approximately 19.9% between August of 2020 and August 2021. But this pales in comparison to the price of real estate in the Metaverse.
In my last newsletter I mentioned a record setting Decentraland transaction where 116 parcels of land had sold for $2.4 million dollars. For context the largest land purchase in Decentraland prior to that was $900,000 for 259 parcels of land – this represents a per parcel price increase of nearly 500% ($3,474 per parcel to $20,689 per parcel). A price increase that has dramatically outperformed any real-world real estate investments.
Just like the real world, real estate prices in the Metaverse are driven by location, location, location, and this $2.4 million transaction was for land in the “Fashion Street” area where the buyers will be building environments to host virtual fashion shows and where they will sell virtual clothing for your Avatars. And with everyone from Gucci to Nike to Ralph Lauren is selling virtual clothing these days, there is a lot of potential for profit.
One example of a successful Metaverse merchandiser is RTFKT (pronounced Artifact) who originally launched Virtual trainers and are now launching an ambitious and beautiful NFT Avatar project called CloneX. As I write this, the Avatars have yet to be revealed but are trading on Opensea with a floor of 4.1ETH.
As Metaverse avatars and identity evolve, the question is what will you do when you’re there?
Will you want to go to a yacht party? If so, maybe you can get an invite aboard the Metaflower Super Mega Yacht, which just sold for 149 ETH (approximately $650,000 USD) making it the most expensive NFT in The Sandbox.
Or maybe you want to party with Snoop Dogg? He invited fans to visit his mansion in The Sandbox a few months ago. But clearly that wasn’t enough for one fan who just paid 71,000 SAND (approximately $450,000 USD) for a plot of land in the Snoopverse.
Whatever you think, property prices in the Metaverse are booming. And with the potential to attract and engage with audiences who are not restricted by geography, travel, or even the laws of physics, the value potential and pricing models for Metaverse property will differ significantly from the real world. But one thing is clear, the early settlers see a lot of value and they are staking their claim.
What is real in The Matrix
The Matrix was one of the first movies to theorise about the Metaverse. Its dystopian vision of a world in which humans all live their lives within the machine in order to power the machine painted a bleak and yet still very relevant picture.
Today, as the fourth film in the series is about to be released, the Metaverse stretches beyond the confines of cinema, and so the film is stretching its marketing efforts into the Metaverse. Partnering with Nifty’s, they launched and sold a series of 100,000 NFT Avatars for $50 a piece. If you missed out, they are now available for purchase on the secondary market here.
But even more impressive is a video that was released by the gaming company UNREAL to promote their new Matrix Game. It’s a bit long, but the graphics are truly amazing. Can you tell who is real and who is an Avatar?
Other news from the week that you might find interesting:
Let’s start with NFTs:
CryptoPunk #4156 sold for 2,500 ETH (about $10.2 million USD) (Story here)
Not quite the highest price ever paid for a CryptoPunk, but close. There is actually a lot more to this story and its relationship to the evolving world of copyright and usage rights in the NFT world, but I will save that for a longer write-up in the future.
Adidas Partners with Bored Ape Yacht Club (Story Here)
Interestingly, this will also feature in the same write up about usage rights for NFTs that I mentioned above. The is because Bored Ape Yacht Club is taking a very different approach to branding and usage rights. Anyways more on that later.
Tyler Hobbs, the artist behind the NFT Fidenza collection, launched his follow-up collection “Incomplete Control”. The Dutch auction sale of 50 un-minted and unseen NFT art pieces fetched prices for between 30 and 80 ETH each for a total of 1800 ETH (over $7m USD). The NFT minting happened at a Gallery in New York, where one at a time buyers were brought to a special location in the gallery to mint their NFT and see what they bought for the first time. Interestingly, it was also the first time the artist would see the piece.
Here is a link to Tyler Hobbs website which include some test outputs of the algorithm that produced the art.
Here is a link to a great article with more about this. Sorry it’s behind a paywall.
Budweiser and Pepsi both dropped NFTs recently. This marks two more major brands moving into the space as they look for new ways to connect with consumers and collectors.
Budweiser launched a collection of 1,936 NFTs all of which sold out in an hour. Budweiser also bought the ENS domain beer.eth.
Pepsi took a different approach by making their collection of 1,893 NFTs free (other than the GAS fees which would need to be paid). The Pepsi collection features generative art themed around 10 microphones.
PAK displaced Jeff Koons as having sold the most valuable art piece of any living artist after successfully partnering with Nifty Gateway to sell 266,445 units of art as NFTs. The units can be combined to create a single piece. The total value of the sale was $91.8m USD. (Story here)
In those parts of the Metaverse beyond NFTs there has also been a lot going on recently
Meta (formerly known as Facebook) launched the Novi wallet App a couple weeks ago, and this week added WhatsApp integration as they bid for a larger space in the Crypto space. (Story here)
An older story, but a good one. Viva Vita uses VR with to help senior citizen connect with the world without the need to travel and to help them fight isolation and depression. (Story here)
Bill Gates predicts that most office meetings will happen in the Metaverse within 2 to 3 years and that people will interact in virtual spaces as avatars. (Story here)
Synthesia released a Deep Fake Santa for Parents. Just type up what you want Santa to say to your kids, and they will send you a Deep Fake of Santa speaking directly to them. (Make your video here)
Crypto Exchange Gemini raises $400 million to build their Metaverse (Story here)
The CEO of 6 Crypto Exchanges come to Washington to talk about regulation (Story here)
As a final point, I just want to say that I am still trying to learn and perfect the right format for this newsletter. Any feedback or commentary that you might have would be greatly appreciated. And please, if you find it interesting or useful, do share it.
Thank you and hope to see you again next week.