Get Ready For A Big Metaverse Real Estate Boom In 2022!

metaverse real estate

Most of us would have advised them to kick the sand if someone had offered us a metaverse real estate and stated, “I’ll sell you a plot of virtual land for 1 ETH” this time last year. After a year, most of us are discovering that we are the ones kicking real sand in the Sandbox, not virtual sand.

Everyone in the blockchain industry wants to be first, to be ahead of the game. Think again if you think you missed out on the latest blockchain gold rush, virtual land. As we speak, a more efficient and scalable future for the convergence of blockchain and real estate is being constructed — and it isn’t limited to the Ethereum blockchain.

Multi-chain, a more diverse pathway that solves the limitations of the Ethereum blockchain and enhances its usage to present previously unimaginable opportunities that touch multiple corners of culture and commerce, is the future of NFTs (the technological standard for unique digital assets, such as artwork or virtual homes).

Alternative chains such as Solana, Tezos, Polkadot, Kusama, Cardano, and others will enable massive opportunities and numerous use cases in this multi-chain future. These chains address issues such as scalability, network congestion, and the ability to properly fractionalize ownership, allowing non-fungible tokens (NFTs) to become useable and transferable in the metaverse, perhaps breaking free from the limits of traditional digital collectibles.

While you may not immediately equate an age-old business like real estate with contemporary technology advancements like blockchain, the potential for this industry to be modernized and made more efficient is powerful – even inevitable.

Anyone who has either purchased or rented a home knows how inconvenient, time-consuming, and costly the process can be. Contracts must be signed, payments must be paid between the landlord and the renters, real estate agents must be hired, and mediation lawyers are frequently used. These arrangements necessitate several transactions, as well as time and money.

We can implement peer-to-peer transactions and use smart contracts to automate and accelerate these legal processes with virtual real estate in open metaverses. Smart contracts can be created to execute orders and trigger actions in real time. As a result, property assets such as buildings, shares or funds, debt or equity, and debt or equity can be automated in innovative ways and implemented in minutes rather than weeks or months.

Decentralized global marketplaces that enable tradable assets and allow metaverse assets to be utilized as extractable collateral to drive new lending methods in decentralized finance can release liquidity through virtual real estate (DeFi).

Users will be able to move digital assets and NFTs in and out of virtual environments in the future, thanks to what we hope will be a more open metaverse. Their digital dwellings might possibly be used as collateral for loans. Imagine being able to borrow money to buy physical land by using a valued piece of virtual land as collateral.

This universe, which is still being settled, will almost probably require more than Ethereum, the most popular smart contract network.

Ethereum’s Drawbacks And The Metaverse

Smart contracts have gained traction in terms of functionality and creativity since Ethereum’s introduction in 2015. ERC-20 tokens are the most widely used tokenization standard. These tokens are used to encode ownership rights in code. The technical specifications for NFTs, the ERC-721 and the more complex ERC-1155, establish digital scarcity. On Ethereum, a wide range of protocols and tokens exist, laying the groundwork for an open metaverse.

However, the sector is fast growing, and Ethereum’s developments are replicated across other blockchain networks. Although layer 2 solutions for Ethereum (add-ons that enable the network execute more transactions) perform effectively, new blockchains have experienced exponential growth and promise fruitful new territory. A large number of innovative builders are exploring for alternatives to Ethereum and its expensive fees.

As a result, the industry’s current problem is to develop interoperability between multiple blockchains. We might finally reach “mass acceptance” in the blockchain business if the “silo effect” is eliminated.

Polkadot, a blockchain in which I have a financial stake, is an example of an alternate chain for this type of interoperability. It can transfer property ownership directly to other addresses, grant or ban third party rights to use a property for exhibition reasons, and expedite the exchange of a deed or trust due to its sophisticated ownership structure.

The Metaverse Real Estate Big Boom

In the metaverse today, there is a veritable gold rush, with young people and celebrities such as Snoop Dogg pouring millions of dollars into virtual real estate. It’s been dubbed a “multi-trillion-dollar opportunity” by Fortune magazine. It’s possible that a new generation will own their first property in the metaverse (or a unique share of one).

There is obviously much work to be done in this area in order to realize this vision. Critics argue that today’s eye-popping virtual real estate sales are more of a novelty fueled by hype and speculation than something that actually symbolizes unique ownership. Others say that real estate, whether virtual or physical, necessitates a level of legal due diligence to assure buyer and seller security and confidence.

There may also be trepidation and criticism from the traditional real estate business, which may not see the value in uprooting their old, if profitable, paradigm.

Nonetheless, real estate NFTs have the promise of democratizing property ownership, a field that has historically been closed to the bulk of the world’s population. According to GoBankingRates, a research analyst at Grayscale Investments stated that real-estate value has historically been determined by proximity to businesses, services, and appealing communities. It’s unclear whether this will be the case in the metaverse, where players can “teleport around the world, making travel fast and unrelated to valuation.” Grayscale is a subsidiary of CoinDesk’s parent business, Digital Currency Group.

Will profiteering contaminate virtual land development as time goes on? Will the value of pricey plots in the Sandbox or Decentraland hold up? Even if you can’t sleep inside a computer, would people outside of crypto perceive NFTs as a powerful new instrument for ownership?

NFT infrastructure is still restricted at this time. True unique tokenization of properties is still not attainable with present technology (particularly on Ethereum, where it is nearly impossible). To move this industry ahead, a new paradigm will need to be devised.

See also: A Step By Step Guide On Buying Real Estate In The Metaverse

In the coming year, billions of dollars will be invested in NFT infrastructure to support different use cases and enable a visible ledger that can be divided and enlarged, allowing for a unique representation of individual assets similar to art and collectibles.

To improve speed, usefulness, and scalability, smart contracts will need to be upgraded. Some industries are doing fantastic work, such as “Nested NFT Palettes,” which enables for intricate ownership connections amongst fractionalized property holders.

Regulations are also being discussed. As are the concerns of the traditional real estate business, which might be seriously impacted by free-moving assets that aren’t tied to a particular blockchain and can be used in both the real and virtual worlds.

Getting people to appreciate digital property has social implications. It’s already taking place. However, the transition to a new tokenized world — a multi-chain future – will take time. It’s similar like constructing a home.

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