The scramble for virtual land is on
You read that right – virtual land in the metaverse, not real land in Zurich or Hong Kong. Metaverse platforms like Axie Infinity, Decentraland and the Sandbox have seen exorbitant prices being paid for virtual plots and items.
In February, in the first sale of its kind 8 plots of land in the Axie Infinity world were sold for 888 ETH the equivalent of $1.5 million at the time. More recently, another plot in Axie sold for 550 ETH which was worth $2.3 million at the time, shattering the previous record.
Not to be outdone, in a competing platform, Decentraland, a piece of land sold for $2.43 million. The land was purchased by a business though, meaning institutional money is moving into digital land further pushing up prices. This is not unlike in the real world where private equity firms are buying up residential real estate and becoming landlords like Blackstone (NYSE: BX) in Spain.
Adidas (BATS EU: ADS) called the metaverse exciting and then teased at acquiring land on yet another platform, Sandbox, and tweeted about it, as well as their new partnership with Coinbase (NASDAQ: COIN). They are competing with rival Nike (NYSE: NKE), who created a virtual world in Roblox (NYSE: RBLX) called NIKELAND, becoming one of the earliest major non-tech companies to get involved in a major way in the metaverse space.
What this means for the long-term value of digital land in the metaverse is anyone’s guess. But if you want my two cents, I think paying massive sums for invented space on platforms that may or may not succeed in the long term, and paying using cryptocurrencies that these platforms are built upon (assets which themselves are volatile and speculative) – that to me is the definition of a bubble waiting to pop.
On the other hand, perhaps two of the biggest shoe companies in the world investing large sums of money into virtual land to promote the brand and sell their wares is providing a boost of confidence to other big consumer goods firms with eyeballs to attract and products to sell.
Whatever you believe, Adidas is right about one thing, the metaverse is exciting and virtual land could be a digital asset that you may want to keep your eye on.