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Curious about why anyone would buy real estate in a 3D world
and how they can make money from it? Here are your answers, filtered through
the example of one leading virtual world: Decentraland, which is a good proxy
for other metaverse economies.
article here
Decentraland was created by Argentinians Ari Meilich and
Esteban Ordano and has been in development since 2015 and is run as a
non-profit by the Decentraland Foundation. It launched in 2017 but took off in
2020 when the metaverse craze began.
Decentraland is powered by the Ethereum blockchain. Users
can create, experiment, and monetize content and applications.
Brands including Samsung, Atari, Miller Lite and PwC have
bought digital properties on the site. In March of this year, Decentraland
hosted Metaverse Fashion Week in which major fashion brands appeared, including
Dolce & Gabbana, Tommy Hilfiger, and Estée Lauder. Musicians Deadmau5 and
Grimes have held concerts on the platform.
“One of the coolest things about Decentraland is that it’s
not just a virtual world, but a virtual economy as well,” says Nico Nobili,
CEO of Sybershel, who acts as our guide. “In addition to buying and selling
land, users can also buy and sell goods and services within Decentraland.”
So what are the earning opportunities?
Own Some Pixel Real-Estate
The most obvious income opportunity for landowners is to buy
and then sell their land in a property speculation akin to the real world.
Each 10m x 10m square plot of LAND in Decentraland is an
indivisible and permanent asset stored in a smart contract.
That means that every piece of land purchased is permanent
and can’t be altered. The value of each LAND is determined by market demand.
LAND is actually a non-fungible token ERC-721 minted on the
Ethereum blockchain. Non-fungible means that it is not replicable and it is
unique.
In April 2021, during a surge in popularity for NFTs plots
parcels sold for between $6,000 and $100,000.
“Decentraland is still in its infancy, so land and property
prices are relatively low,” Nobili says. “But as the platform grows, prices are
expected to rise.”
Sell Services on Your Property
In addition to buying and holding LAND, users can also
develop their own applications and experiences (known as “dapps”) on their
lots.
“A bit like a physical store,” says Nobili, “but in these
dapps you have an experience as if you were entering a museum or a playground.”
He reports that Decentraland plans to launch a marketplace
where users can buy and sell goods and services. The market will be powered by
the same smart contracts that power the property system.
Speculate with Native Currency
Another way to generate income in Decentraland is to simply
hold the platform’s native currency, MANA.
MANA is an ERC-20 token, which means it can be bought and
sold on cryptocurrency exchanges.
Dapps on Decentraland can only by visited by other users who
own MANA.
The price of MANA is expected to rise as the platform grows
and as more people use it.
Soon it may be possible for users to convert conventional
dollars and sterling into MANA, a move that is thought necessary to populate
Decentraland and create more demand.
Mint and Sell Tokens
Another possibility is to create a market for non-fungible
tokens (NFTs) such as digital art, collectibles, and game items.
According to Nobili, Decentraland is working on a way to
allow users to create their own NFT markets.
“You will then be able to sell the products you created on
the Decentraland Metaverse to other avatar users who frequent this world.”
Speaking of avatars, you can also create and sell virtual
clothing and other avatar accessories and earn income that way.
Once again the Decentraland team is working on a way to
allow users to also create and sell their own avatar clothing.
This is all a very rosy picture of the metaverse and how
everyone can be involved and make money from participation, but it strikes me
that it’s also not telling the full story. It would seem that most of the
money-making schemes here are like the stock market — where you buy low, bet
that demand will rise and cash out on a profit. The stock market IRL is
dominated by venture capital — i.e., those with existing capital can absorb the
risk.
Like many metaverse idealists, Nobili doesn’t point out that
the site is dominated by brands — that is, advertisers hoping to extend their
marketing into the 3D internet. To my mind, that’s just old capitalism and it’s
not creator led.
More significantly, metaverse visionaries make much of the
idea that avatars and currency or assets can be exported seamlessly between
multiple virtual worlds that make up the metaverse. While Decentraland is
making moves to be transparent (ie enabling MANA to be traded as standard
cryptocurrency), it’s not clear if NFTs minted in other worlds are able to be
traded on its site.
As Nobili says, this is a work in progress: much like the
metaverse.
Sybershel,
by the way, is attempting to combine technology and artificial intelligence
with human beings. “Creating technological products that adapt, blend, and
merge with man,” Nobili states. “Making him more bionic.”
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