Hundreds of millions of euros are spent on virtual land. In digital environments, people speculate on land, but they also work on real estate projects. How does that really happen?
A few weeks ago, the American Yuga Labs sold virtual land for 320 million euros. Yuga Labs is known for the Bored Ape Yacht Club (BAYC) crypto tokens and is valued at $4 billion. Now the company is working on a metaverse, a set of interconnected digital environments. There, users can play and create games, attend musical performances or simply have a retreat for their social contacts. Yuga Labs is just one of many parties involved in the virtual earth and digital worlds.
- Hundreds of millions are involved in the world of virtual real estate.
- That real estate makes full use of blockchain technology, including NFTs.
- Major brands are establishing themselves in the worlds of blockchain, such as The Sandbox and Decentraland.
- Buyers are faced with many choices: which world, which district, how to insure, how to build?
- Certain worlds may also hire or hire an event agency.
With the advent of non-fungible tokens (NFTs, property rights over digital objects), the “virtual earth” takes on a new dimension. With these NFTs, a virtual parcel of land is uniquely recorded on a blockchain, where that data is invariably stored on a global network of computers. Those NFTs can be traded on specialized markets.
start the metaverse
What exactly is the metaverse? How will it change our lives and our work? In addition to attending exclusive parties, can you also invest, build and invest there? Who sets the rules in this new virtual world? Which Belgian companies have already discovered the opportunities of the metaverse? De Tijd guides you through the metaverse with articles and podcasts. Follow all in our ‘Home to metaverse’ archive.
We look at developers building virtual real estate projects and ask them where and how they build.
Choose a plot
At the Hangar K co-creation center in Kortrijk, Stefan Colins looks at a grid map. Small grids are interspersed with large blocks of color featuring brands like Atari, Adidas Originals and Ubisoft. “Grids are parcels of land,” says Colins. The map is from The Sandbox, a virtual world owned by Hong Kong’s Animoca Brands. Colins works for the Flemish blockchain technology company Venly, where he is responsible for partnerships and community building. Venly ensures that gaming companies and e-commerce platforms can integrate blockchain applications. At the same time, apps need to be as user-friendly as possible. The Sandbox is one of his clients.
Sandbox has already convinced many big brands to buy land. Including the success of the Belgian comic De Smurfen. Is there still affordable land for ordinary people? After some searching, Colins finds a chart for 1.6 ether, the cryptocurrency on the Ethereum blockchain. At the time of the conversation, the exchange rate for an ether is 2,900 euros. So about 4,640 euros for a plot of 96 by 96 meters. “That’s still possible,” Colins believes, though it has to be said that the transaction costs, the “gas fee,” on Ethereum can be very high. In the sale of real estate by Yuga Labs, the transaction costs were the same as the price of the land itself.
Colins reviews land offers on the large NFT OpenSea market. To get there, he clicked on an OpenSea link on The Sandbox’s site. “Doing a random search for ‘The Sandbox’ on OpenSea is not recommended, because you may be scammed with a bogus offer,” warns Colins.
If you’re hosting events or other ticketed experiences, it’s important to attract passers-by.
There is already a whole selection of blockchain worlds. Decentraland already existed before The Sandbox. You can also turn to Vegas City, a project that rents land and organizes events at the request of companies.
Suppose we choose The Sandbox. Where exactly on the map do we buy our plot? The price depends on the neighborhood. A plot next to rapper Snoop Dogg’s project costs 250 ether, a few weeks ago it was good for 725,000 euros. “That’s already a solid lump,” Colins says dryly. When he buys it, he will go to his crypto wallet. “On The Sandbox, 75 percent of users use a Venly wallet, where they can turn to our help desk,” says Colins. Others prefer to take everything into their own hands and use the MetaMask wallet. Large crypto assets are often housed on separate hardware so hackers don’t stand a chance.
But why is place so important in a purely digital environment? “If you’re hosting events or other ticketed experiences, it’s important to attract passers-by,” explains Colins. And it’s like in the physical world: if you choose a prestigious shopping street where the best fashion stores want to be present, then the price is high.
Sandbox provides a kind of digital Lego box with windows, doors and animations. Programming is not necessary.
how to build
But how do you build something in The Sandbox? Like Decentraland, The Sandbox has its own software to build on. “I find it very easy to use,” says Jorden Van Valckenborgh of Digital Arts and Entertainment (DAE) at Howest. She is an intern at Venly. ‘The Sandbox offers a kind of digital Lego box with windows, doors and animations. Programming is not necessary.’ You click and drag on your screen. The templates take you by the hand and teach you about certain components, such as text and dialogue for role-play. The creators of Roblox or Minecraft, the two biggest Sandbox games, may have little trouble with that.
For TCG World, another NFT world, Venly made a 256 by 256 meter clubhouse. A separate software was chosen to create virtual environments, Blender. On-site installation involves a few additional complications, but nothing that Van Valckenborgh can’t solve. There is an entrance hall, a staircase and more than enough space to organize events.
MetaRing owners gain access to special DJ zones, where exclusive releases, ‘drops’ in NFT parlance, occur. The MetaRing is an NFT that acts as a kind of passport and gives access to exclusive events. It can be used in about 15 digital environments. Venly builds a clubhouse for owners of a MetaRing in various metaverses. That clubhouse can also be used by brands. “That way they can test the environment without immediately spending €100,000 or €200,000,” Colins says.
At Snoop Dogg’s estate in The Sandbox, you can see a similar model in action with an early access passport valued at $1,300. You then gain access to NFT drops, for example, from a virtual bulletproof vest.
Metaverse and blockchain
In The Sandbox, the land, buildings, and belongings of the avatars are NFT. But what if the world itself disappears? So you still have the NFTs in your wallet, but you still can’t make the digital devices work in another virtual world.
‘The community is big,’ Colins assures us. There are big parties that just might take over The Sandbox. In Decentraland it is the DAO, a decentralized autonomous organization, that watches over the governance of the world. Sandbox now has a community of builders and investors. That world is still in an alpha phase, only accessible to the public for short trial periods.
Still, it remains a mystery why brands pay huge sums of money for a world like The Sandbox that hasn’t been opened yet. Or to Decentraland, where few people walk during the day. Events like fashion week or the Australian Open tennis grand mass are crowded in certain neighborhoods.
‘Brands don’t want to miss out on the young generation. If the metaverse of the future is all about blockchain and NFTs, then they already want to be there now,” Colins said.