- Blockchain-based virtual real estate in the Metaverse has seen a solid surge in demand and prices growing by 879 percent in 30 months.
- The intersection of VR and NFT technologies with the Metaverse could unlock new immersive experiences for consumers.
While there’s been a major slowdown in the crypto space since the beginning of 2022, some factions of the Metaverse continue to boom. The latest report from Chainalysis shows that real estate and gaming continue to thrive in the Metaverse.
The blockchain analytics firm takes a larger time horizon to explain the growth comparisons. From September 2019 to March 2022, prices of blockchain-based virtual real estate shot up by 879 percent. On the other hand, the real estate price surged by 39 percent.
Of course, the virtual real estate industry is no match to the real estate industry in absolute size. Chainalysis adds: “it’s nonetheless surprising that the growth of virtual real estate prices has outpaced that of physical real estate by 532%”.
Related: The Metaverse could be valued at $5 trillion by 2030: Report
But what’s driving this craze behind the Metaverse properties? Chainlaysis explains some of the present-day utilities and prospective benefits of owning virtual real estate.
The present-day utilities could include embedded videos, images, NFTs, and interactive objects. It can also include Play-and-earn integrations. However, one of the major differentiating factors is access to private events and NFT-gated communities. This feature in particular has provided a major boost to NFT demand, thus translating into sales of virtual real estate.
Chainlysis explains that the popular BAYC project bundles its NFTs with the entertainment and digital community. They have successfully translated that into a metaverse land sale worth $310 million.
Some of the prospective utilities are renting and leasing, free airdrops of future VRE NFTs, as well as future AR/VR integrations and functionalities
Affordability of metaverse projects
As per Chainalysis, the biggest differentiating factor for the Metaverse land pricing is the blockchain hosting virtual real estate. For e.g. metaverse lands built on Solana have much lower entry-level pricing in comparison to Metaverse lands on Ethereum.
The simple reason is that Solana’s average gas fee of $0.00025 is a very small fraction of Ethereum’s average gas fee of $5 to $50. Thus, metaverse-land holders and developers might see better and more affordable deals on Solana.
However, Ethereum-based Metaverse projects are also integrating with its Layer-2 scalability platform Polygon. This Ethereum sidechain delivers competitive pricing and speed performance to Solana.
Another interesting observation is the users’ land holdings time. Chainlaysis fetched the data about holdings across the 11 Ethereum-based metaverses. What they found was that there was a very high speculative activity with the intention of flipping. The report adds:
In 10 out of 11 of the projects we study, users have held their VRE NFTs for less than 25% of the time the NFT collection has been live. In 6 out of 11, they’ve held it for less than 15%. In other words, VRE purchases in most of the above projects would be best characterized as “flipping.”
Chainalysis also found that OVR Lands had holders with the longest waiting periods. This was because of the availability of cheap and abundant land which takes time for building.
Chainalysis further explained that the long-term value of the virtual real estate on the Metaverse will depend on a number of factors. It will all depend on whether the AR/VR systems are more interoperable or proprietary.
Facebook-parent Meta has envisioned the Metaverse as an “interconnected system that transcends national borders” just like the internet. Last month, Big Tech companies like Meta, Microsoft, and Epic Games also formed the Metaverse Standards Forum (MSF). This group intends to create open forums for new technologies like AR, VR, Web 3, and the Metaverse.
Hopefully, these companies will build the Metaverse in a way that is compatible with existing metaverse projects and blockchain technology.
Benefitting from the adoption of VR technologies and blockchain gaming
In the report, Chanalysis mentions that in addition to the interoperability aspect, blockchain-based Metaverse projects tend to benefit more from VR adoption. Immersive virtual experiences will allow users to experience the tangibility of NFT-based ownerships of the metaverse lands.
This drives us to the VR-based gaming industry which has grown at a compounded annual growth rate of 28.5 percent over the last four years. Blockchain-based games have been often linked to metaverse projects these days.
Blockchain-based gaming projects and the metaverse share some common goals like building more open-ended economies, connecting individuals and communities, pushing boundaries of digital ownership, and making the virtual world as immersive as possible.
Also, blockchain-based aging projects have seen a major boost recently. For the last quarter, blockchain-based gaming firms raised a staggering $2.5 billion up 150 percent from the previous quarter.
Chainalysis further goes on to explain the entire case study for EA sports and how they can unlock new revenue streams by blending the blockchain-based gaming industry into the metaverse. It further goes on to explain how EA sports can leverage the power of NFT to unlock more economic opportunities. The report notes:
NFTs could generate significant additional revenue for EA Sports. Under our lowest resale volume model (100%), in which players spend $65 on NFTs and engage in $65 worth of secondary market activity.
All in all, the technological shifts taking place are very fast. However, with the intersection of technologies like metaverse, VR, gaming, etc. we can unlock new customer experiences.
This news is republished from another source. You can check the original article here