At the beginning of the week, we asked you something – would you buy land in the metaverse? Here are the results:
So, 50% of you would definitely invest in virtual real estate, and only 12.5% would definitely not. The results provoked us to delve deeper into this novel digital market and its future potential.
According to data from MetaMetric Solutions, real estate sales on the four major metaverse platforms (The Sandbox, Decentraland, CryptoVoxels and Somnium Space) exceeded USD 500 million in 2021. This number is expected to reach a billion by the end of 2022, with sales of more than USD 85 million only in the first month of the year. Are you sure you still don’t want to enter the market?
Ok, no rush. Let’s first see what drove the market in the past twelve months.
In the first ten months of 2021, nothing so special happened on the metaverse land market, with daily sales rarely exceeding USD 1 million. Actually, the highest sales volume during this period was on April 14 – close to USD 3.6 million, up from USD USD 521,344 the previous day. The increase was driven mainly by sales on The Sandbox, which announced a 24-hour auction of 19 estates on the platform.
The metaverse real estate market witnessed a significant surge in November, driven by Facebook’s announcement that the company was rebranding and changing its name to Meta. MetaMetric reported that in November virtual real estate sales reached USD 133 million, up nine times.
Metaverse sales went up from USD 1.17 million on Oct. 28, 2021 to USD 18.8 million on Nov. 24, 2021, according to data from Nonfungible.
However, in terms of the actual number of sales, 2020 was a better year compared to 2021. For example, according to data from Nonfungible, metaverse sales in 2021 were 131,711, down from 134,542 in 2020. On the other hand, the number of unique metaverse users more than doubled in 2021, from 15,151 for 2020 to 35,906 for 2021.
Major Market Players
These four companies are the leading players in the field:
The Sandbox, the largest real estate metaverse platform, consists of 100 NFT private islands, called Fantasy Islands that also include land, villas, and extras like boats and jet skis that users can purchase. The project was built on the Ethereum blockchain and as of February 3, 2022 generated sales of more than USD 397 million in total. Sales for 2021 were close to USD 318 million, up from USD 4.4 million in 2020. In January 2022 alone sales on The Sandbox reached USD 72 million – nearly 23% of the annual sales for 2021.
Republic Realm, an NFT investment platform, bought land on The Sandbox metaverse for a record USD 4.3 million in November 2021. Additionally, The Sandbox partnered with Snoop Dogg. The singer owns his own virtual land on the platform where he set up his virtual mansion. In December 2021, an unknown user paid USD 450,000 for a land next to Snoop Dogg’s house on The Sandbox.
Here is a snapshot of the Top 5 largest sales on The Sandbox ever made:
Decentraland is the second largest virtual real estate space with a total volume of USD 179.7 million of which USD 110.8 million made in 2021. Sales for January 2022 reached USD 27.8 million, up from USD 1.2 million for the same period in 2021.
February 3, 2022 generated sales of more than USD 914 million. Sales for 2021 exceeded USD 630 million, up from USD 16 million in 2020. In January 2022 alone, sales on Sandbox reached USD 143 million – nearly 23% of the annual sales for 2021.
In November 2021, Tokens.com paid USD 2.4 million for 116 parcels comprising some 6,090 square feet on Decentraland. Two months earlier Tokens.com paid close to USD 2 million for a 50% stake in a portfolio of digital real estate owned by Metaverse Group, with plans to turn it into the world’s first metaverse REIT.
Here is a snapshot of the Top 5 largest sales on Decentraland ever made:
CryptoVoxels and Somnium Space are the other two dominant metaverses with all-time sales of USD 35 million and USD 21 million, respectively.
Market Saturation
The four major virtual real estate players offer a total of 268,645 parcels (just for comparison, there are 18,945,250 bitcoins in circulation), with The Sandox having 166,464 LANDs of different size or nearly 62% of the market in terms of land plots. Decentraland has 90,600 parcels or close to 34% of all lands.
The Future
If we have to draw parallels between the cryptocurrency market and the metaverse market, we could say that the top two virtual reality platforms, The Sandbox and Decentraland, can easily be compared to the top two cryptocurrencies – Bitcoin and Ethereum. New tokens are coming out all the time, trying to replicate and even replace BTC and ETH but the truth is that there is still no such digital currency that has achieved that. Similarly, The Sandbox and Decentraland would most probably remain market leaders even when the market saturates with more and more projects aiming to sell you virtual homes, offices, and experiences. After all, MetaMetric Solutions projects that the sales on the major metaverse platforms will reach a billion by the end of 2022.
So, let’s ask you again: Would you buy land in the metaverse?
