The metaverse is a hot topic these days. Whether it’s Mark Zuckerberg saying it’s the next step for social media or Microsoft wanting to build its own next-level version of the internet, the metaverse is bound to see growth in the years to come.
The origin of the metaverse goes back to science fiction books. The “metaverse” as we know it was first coined by sci-fi writer Neal Stephenson, in his 1992 novel, “Snow Crash.” The concept defined a place where people exist as digital versions of themselves, doing what they would do in real life, but in the “metaverse.” A film example is how it has been depicted in “The Matrix.”
Now, the metaverse is as real as ever. It’s a fully functioning world, with its own economy and real estate market where you can buy, sell and invest in properties, as you would in the real world.
Virtual real estate has seen a boom in the metaverse, along with the boom of NFTs (Non-Fungible Tokens). This digital ecosystem allows for future-proofed purchases of virtual plots of land, which are being turned into districts, streets and Times Square-like hubs where brands can buy plots and build virtual buildings to advertise their company’s logo and message 24-7. It’s more than just a replica of Second Life, however, as virtual real estate is booming in four metaverses: Decentraland, Cryptovoxels, Somnium Space and The Sandbox.
Some metaverse plots have sold for over $500,000 in blockchain-based online environments. In Decentraland, over $50 million has been made in sales, with one plot selling for $572,000 in April (in March 2021, there were 334 buyers, contributing to $4 million in sales, according to NonFungible.com).
On top of all this, buying virtual real estate might be one thing, but buying private islands in the middle of the metaverse is another level entirely. Now, with the help of Republic Realm, an investment firm working exclusively in the metaverse, a limited edition of 100 “Fantasy Island NFTs” are up for sale as part of “an exclusive community.”
Buying an island is not simple. A limited number of “Fantasy Island access keys” are being sold on Rarible, which allows the buyer to hold a unique 3D development (including the land) in The Sandbox. After the access key sale, Fantasy Islands will be minted. Each access key owner will be randomly assigned one of three island types, each with its own unique characteristics and scarcity. They’re calling it “the first of its kind.”
Each island has a “fully-furnished 3D interactive villa,” and only 100 of these Fantasy Islands will ever be sold, so owners (who are called the “FI100”) are part of an exclusive community.
Janine Yorio, the managing director of Republic Realm, an investment firm working exclusively in the metaverse, predicted the boom will likely continue.
“Even though it hasn’t been around for that long, digital real estate has risen in price considerably over the past year,” she said. “There are only 100 Fantasy Islands, so this is truly an NFT for the privileged buyer. It’s a unique way of participating in a new form of culture that is being built online in the metaverse.”
But private islands aren’t yet a sector in the metaverse. This is entirely new. Republic Realm is the only group so far who has made metaverse private islands. But what does one do with a virtual private island, anyway?
“As the owner of a private island, you can entertain your friends or just chill on your own, and when you want to mix with other island owners, you can head over to the members-only beach club to attend community events or host your own,” Yorio explained.
Island owners can also trade their villa NFTs in the marketplace, redecorate their villa, and create a gaming experience on their island.
“In the metaverse, the possibilities are limitless,” she said. “We’re not constrained by physics, and the most valuable resource is arguably your imagination.”
Along with this virtual luxury market, NFT boats and yachts are available next.
“If you have an island, you need a way to get to and from,” Yorio said. “These are accoutrements for a luxury lifestyle in the real world — something very aspirational. We are translating it to the metaverse.”
She sees the metaverse as an engine for virtual community-building. “We’re excited to see how communities start forming, making their own rules and governance, and planning community events. This is basically like the formation of ancient civilization but it’s happening over days not millennia.”
Adam Hollander, an investor and the General Partner at Aria Capital Management, has bought one of the islands with Republic Realm.
“I hold a strong belief that the metaverse is the future of how people will interact online,” Hollander said.
He compares this early stage of virtual property buying like when people were buying domain names in the early days of the internet. And Hollander is fully aware most people don’t really understand what the metaverse is, but that it will come in time.
“In a few years, people will meet, play, work and learn in a virtual environment,” he said. “As crazy as it might sound, I believe the foundations that are being laid today will evolve over time. Buying a unique plot of land from Republic Realm felt like a strong investment. Considering that one sold yesterday for five times what I paid for mine, I’m feeling confident in that decision.”
Much like art collecting, NFTs are what Hollander calls the future of the way people will collect things.
“People will start to care less about having a physical collectable and be more excited to have something they can show off virtually,” he posited. “In the future, it will be avatars in the metaverse, and buying virtual property is simply an extension of that belief and investment strategy. I plan on holding it for a long time as it continues to appreciate in value.”