The burgeoning digital real estate market is heating up.
A virtual “estate” in Decentraland, one of the two dominant metaverses, changed hands on Nov. 23 for a record sum — the equivalent of $2.4 million at the time.
Tokens.com Corp., via its subsidiary Metaverse Group, paid 618,000 MANA — the native Decentraland cryptocurrency — for 116 parcels comprising some 6,090 square feet in the virtual world.
The estate, in Decentraland’s Fashion District, is now worth much more, thanks to a 35% increase in the value of MANA overnight. Cryptocurrencies are notoriously volatile, but the market overall has trended up since the summer. MANA has increased in dollar value by more than 65 percent over the last week, and by more than 550 percent over the last month, according to crypto marketplace Coinbase.
Decentraland, like other metaverses, is still largely undeveloped. But investor interest in the metaverse has grown in recent months as retail, gaming and media companies like Facebook have staked claims in virtual worlds. As the number of participants has multiplied, value has coalesced around estates and other plots located near highly-trafficked public squares and emerging commercial enterprises like casinos.
Speculators say digital real estate can serve a variety of purposes, from retail showrooms, to event spaces and virtual offices.
Toronto-based Tokens.com, a publicly traded company that facilitates investment in digital assets, plans to develop the Decentraland estate for staging fashion shows with clothing brands, the company said in a release. Luxury brands such as Louis Vuitton, Gucci and Burberry have already entered the metaverse through designer NFTs — unique digital assets secured by blockchain technology.
In September, Tokens.com paid roughly $2 million for a 50% stake in a portfolio of digital real estate owned by Metaverse Group, with plans to spin it off as the world’s first metaverse REIT.
Tokens.com is led by co-founder and CEO Andrew Kiguel, a former real estate investment banker.
The Sandbox, another dominant metaverse oriented toward gaming, is set to launch Nov. 29 after four years in development. SAND, the native currency of the virtual world, is up more than 800% in the last month.