In 2021, the first digital home i.e. Mars House sold for more than $500,000 USD in an online auction. That was the first NFT digital house to be sold and was a historial moment for not only NFT technology, but also the real estate industry. This marked the beginning of the buzz around virtual real estate NFTs.
Since then, there has been significant progress in the market with platforms such as Decentraland and The Sandbox selling the smallest chunks of land for 3.7 and 3.46 eth, respectively. It is said that The Sanbox is the largest virtual world in terms of transaction volumes, with over 65,000 transactions in virtual land, summing up about $350 million alone in 2021.
Figure 2: Daily Average Prices on the Sandbox in 2021
In the metaverse, platforms such as Realm.art allow users to partake in the same activities they would in real life. Users are able to design their avatars to represent themselves in the metaverse and they can also decorate their homes as well as meet new friends and attend events in the metaverse.
Virtual real estate works quite similarly to the real world. When a metaverse has significant traction and activity, its worth increases as well. Virtual developers and investors alike pay attention to areas that grab more attention and activity, densifying the real estate pool, creating demand, causing properties in the metaverse to fluctuate in value based on the activities of users.
Like the real world, the metaverse experiences scarcity as well. There is a limited amount of digital land plots that are built and sold in the NFT marketplace, hence creating scarcity, allowing sellers to hike up prices for highly valued properties and land in the metaverse. Buyers can expect to pay hefty prices in the emerging virtual land market.
Metaverse meets Real World
With the rise of this ownership economy, partnerships between real estate platforms and metaverse companies, users will not only be able to build their assets, they will also be able to have a stake in the real and virtual world. For example, through the partnership between Bricktrade and Realm, the community will be exposed to unprecedented access to investment opportunities both tangibly in the real world, as well as virtually in the metaverse.
As a mobile first metaverse using AR technology and integrated chat systems, the Realm metaverse business model is aimed at creating a better world by leveraging engagement in the digital economy to drive real world projects that directly benefit humanity and the planet.
Similarly, Bricktrade is on a mission to not only be the one-stop solution to purchasing real estate but it is also looking to be a place for anyone to come to to experience and scale in Realm’s metaverse.
With this brilliant opportunity for property investors to own digital twins of their purchased real-world assets in the metaverse, both Bricktrade and Realm.art are at the forefront of the property market revolution.
That’s right, decentralised mortgages are catching up and are becoming quite popular. Bacon Protocol, a decentralised mortgage lender minted its first seven mortgages as NFTS, offering investors and borrowers the chance to access the residential mortgage markets.
Typically, an NFT mortgage allows homeowners to trade a lien (rights) to their property for an NFT that will signify a portion of the house value which will then be used as collateral throughout the DeFi space or the lender’s platform.
Due to the use of blockchain technology that provides transactional certainty, NFT mortgages are generally more secure. Deals can also be completed much quicker and smoother with this automated approach and convenience.
NFT mortgages are still in their infancy, but they are likely to become significant in the near future.
With the rapid adoption of Web3, the use of fractional ownership and the metaverse are guaranteed to skyrocket in the coming years.
For more information on the real restate market and how you can be more involved in the metaverse through real-world assets, please visit the Bricktrade website to find out more: https://bricktrade.co.uk/
Bricktrade is the UK’s first property investment platform that is set to revolutionise and reinvent the purchase of real-world assets. Bricktrade will facilitate the tokenisation of real estate assets, opening them up to the possibility of investment from crypto market participants whilst simultaneously providing real asset-backed investments, as well as allowing property purchases entirely funded by cryptocurrencies.