My secret recipe for investing in the best Metaverse worlds
- Despite the current hibernation in most investment markets, Metaverse still offers a long-term potential for investors willing to take a chance.
- But not every virtual world is created equal – some are awful for virtual real estate investors.
- Here are some of the elements I am looking for in a good Metaverse platform that will bring endurance to the virtual real estate market.
If you have ever thought about buying real estate in Metaverset, there is no better time than now. With both the stock and crypto markets declining, the acquisition price is the lowest it has been in several months. In addition, there are even more stocks to choose from and opportunities for long-term gains.
Even if the markets were not plummeting, I would still give you the same advice when it comes to Metaverse real estate: Buy with a plan in mind and a long-term holding strategy. And as things are now, you also get a slightly cheaper price (who doesn’t love to trade at a discount?).
So what am I looking for in the best investments in the Metaverse world? I want to tell you a little about my secret recipe.
1. A Metaverse property should be secured by an NFT Many digital platforms allow you to purchase virtual objects, but in most cases you do not actually own these objects. Platform owners can set the rules (check your end user license agreement), e.g. B. whether you have permission to resell these items and they can determine how the item can change as the platform evolves.
When it comes to virtual real estate, this is an even bigger problem than a virtual tiara for your avatar. If the platform owners can dictate what you can and cannot do with your virtual property, does it belong to you at all?
Keep an eye out for platforms that sell digital items supported by NFTs, including and especially real estate. These NFTs serve as proof of ownership and the rights associated with them are set out in the NFTs’ licenses. So they do not cater to the whims of platform owners. After all, you want to be able to resell, rent or build your virtual land the way you want, right?
If your platform offers lots through a third-party marketplace that sells NFTs, such as OpenSea or NonFungible.com, or you need to store your purchase on a crypto wallet, you have found virtual lots secured by an NFT. If you can only buy on the platform and the information about your purchase is only stored in your account on that server, you have not done so.
2. Only act in worlds where you have influence. When buying a virtual land, you have a few options. You can choose a world where the company that built the world is also responsible for the rules and regulations, or you can choose a world with a decentralized autonomous organization (DAO). Metaverse platforms with DAOs like, The Sandbox and Otherside, owned by the Bored Ape Yacht Club, give you as the owner or crypto holder voting rights and therefore an influence on how your world works.
For example, if there is a particularly offensive username, you can vote to ban it and even create a rule to prevent it in the future. You want to change something in the world, e.g. B. that users can rent their land within the platform without having to sign a contract? You can propose a change to the platform, and the community will then vote on it.
But not all DAOs are the same. So before you commit, you should be aware of what you can do with your voting rights and how much control you actually have as a resident on a given platform. Some people may not want to interfere in the policy of the platform, but it is important that you have the opportunity if a problem arises that you need to address.
Beware of worlds with too many – or too few – slots Although there are no final dates on this yet, you should consider the law of supply and demand. If you are buying a virtual lot on a platform that has only 100,000 lots and that platform is popular with both users and investors, these lots should be worth more over time. You can check the world documentation or the basic description to see how many countries are already affected.
We can look at Superworld, which has 64 billion seats on offer. For the three-month period ending May 9, 2022, the highest average daily selling price was $ 382.32 on April 3rd. The lowest average selling price in Decentraland, which has 90,601 in total, was $ 1,697.29 in the same period on April 20, a low-volume sales day where someone got a good deal.
One can also say that one has to be careful with a platform for too few reasons. I generally trust worlds from 75,000 to 200,000 because they are most likely to increase in value, hold on to that value, and provide plenty of reasons to keep coming back.
Community is what drives value in Metaverse When it comes to investing in Metaverse, it is important to understand what really creates value there: Community. People can spend their time online in many ways, so they must want to choose your Metaverse platform – and they must have a compelling reason to stay there.
Even if you are not interested in running your own Metaverse business or creating an experience, you can find great renters who would like to do these things but who are not yet ready to invest in their own land. In this way, you not only earn passive rental income, but also help to strengthen the sense of community in a growing world.
This context is what makes a platform hold. Just look at what Second Life achieved in a world before Metaverse was a serious concept at all: Linden Labs, Second Life’s parent company, reported a $ 500 million GDP by the end of 2021. This world is much smaller than modern Metaverse platforms, has no blockchain technology (ie no NFTs) and has been around since 2003, so it is technologically disadvantaged in many ways. Still, Second Life is the best model we have for seeing what a Metaverse platform might look like in two decades, and it shows us what to look for when making long-term investment decisions.
Citi estimates that the total addressable market for the modern Metaverse will be between $ 8 trillion and $ 13 trillion by 2030. But if your world does not retain its users, as Second Life does, you may miss this opportunity.
My secret recipe for investing in the best metaverse world article first appeared on The Motley Fool Germany.
Citigroup (NYSE 🙂 is an advertising partner for The Ascent, a Motley Fool company. This article was written by Kristi Waterworth and was published on Fool.com on 14/5/2022. It has been translated so that our German readers can participate in the discussion.
The Motley Fool does not own any of these shares.
Broget Fool Germany 2022
This article first appeared on The Motley Fool