Real estate has always been a superior investment to gold, equities, mutual funds, bonds, and so on. Purchasing property or investing in real estate has become a dream for many as the population grows and inflation increases. But what if we told you that you may now own digital lands that, although not physical, are actually more lucrative than the present real estate business?
The metaverse, powered by bitcoin, is definitely the most appealing draw for real estate developers.
Before starting, let us have a little conversation about acquiring land in the metaverse. It is very important to understand what the metaverse actually is. Call it a world with no borders.
Consider an environment in which you can trade, purchase, and discover. You can possibly do everything you do in real life. It should be highlighted that it is not a substitute for reality. It rather improves how you perceive things in the digital world.
How do you define a virtual land?
Real estate has been a profitable business. The idea of investing it in the metaverse is something more than this. This is because the property you are buying does not exist physically.
However, a CNBC investigation indicated that virtual property values had increased by up to 500 percent after Facebook’s shift to its new avatar, Meta, demonstrating the social media giant’s genuine interest in the metaverse domain.
Virtual lands are plots of land that one can buy using cryptocurrencies (in the form of NFTs) on digital metaverse platforms. They are distinct and tradeable digital assets whose ownership is recorded on the blockchain. Owners may sell their land on the secondary market through a third-party exchange or the metaverse ecosystem.
Why Should You Buy Metaverse Real Estate?
Metaverse real estate allows consumers to interact with other people online. Individuals may play games and interact on their digital land. Creators may monetize their property’s content by charging for access or selling their NFTs. Brands may leverage their virtual assets to promote services, introduce virtual products, and deliver unique consumer experiences. These digital pieces of land provide a profitable possibility for real estate investors. Metaverse properties, like real-world assets, may be developed, flipped, or leased.
How does lending take place in the metaverse?
Land purchase in the metaverse is only workable with cryptocurrency. This is due to the high transaction costs associated with fiat currencies, while crypto assets may be exchanged internationally without the intervention of a third party or broker.
With the present worth of metaverse plots increasing—what should one do if they are unable to buy a pricey plot at the moment?
Imagine being able to acquire your dream piece of land via loans, which DeFi may make possible. DeFi, or Decentralized Finance, is basically an entity that may support bitcoin borrowing and lending against collateral. In the case of the metaverse, the collateral may be an NFT you purchased or your crypto assets. It would be incorrect to compare DeFi to banks. Unlike banks, anybody may borrow crypto assets without the need for KYC paperwork or a credit check. All transactions are automated with the use of smart contracts.
Notably, having a mortgage for $30,000 held up against an NFT owned by an individual investor is always simpler than putting down $30,000 USD on a piece of real land.
As previously said, DeFi is the sole entity that can support money lending, but it is not as simple as it seems. There are other elements at play. These include the simplicity with which loans are made and the safety of a multi-blockchain network, which allows for faster liquidity deployment while being cost-effective.
Corporations are capitalizing on the metaverse’s limitless possibilities, which might represent a trillion-dollar opportunity. It may seem that the prices for a lot of digital real estate are already exorbitant.
Remember, there are still plenty of plots available for purchase. Some are still under construction. Without a question, the potential of digital lands is unfathomable, but only if properly channeled.