TL;DR

Virtual land is an NFT that represents an area of ​​digital property on a metaverse platform. Some popular NFT land projects are Decentraland, The Sandbox, and Axie Infinity. NFTs are well suited to representing land ownership as each is unique and easily proves digital ownership. You can use NFT land for advertising, socializing, gaming, work, among other use cases.

The owner typically uses their land to host online experiences, display content, or gain benefits in a game. Big brands and celebrities, including Adidas and Snoop Dogg, are also investing in and using NFT land.

The value of land varies depending on its use, design and market speculation. You can buy NFT land from a project, in a land sale, or on the secondary market through an NFT exchange, such as Binance NFT Marketplace or OpenSea. Before purchasing, make sure you understand the risks and use cases of the virtual land and its respective project. In some cases, renting NFT land may be more advantageous than purchasing it.

Introduction

The development of the metaverse has generated interesting new use cases for blockchain technology. The year 2020 was very important for the metaverse and for non-fungible tokens (NFTs). So it's no wonder that virtual properties have also become a hot trend.

Some NFT land sales have fetched prices higher than many properties in the physical world, making the concept difficult to understand for some. In fact, there are many similarities between NFT land and traditional real estate. However, being a digital asset on the blockchain, NFT land has some unique features.

What is metaverse?

The metaverse is an online virtual world that will combine various aspects of our digital and real lives, including work, socializing and leisure. In 2021 technology giants such as Meta (formerly Facebook), Microsoft and Epic Games began to develop and explore the concept of metaverse. Blockchain technology plays a key role in the development of the metaverse, as aspects of digital property, identity and economies are crucial. For a more detailed explanation, read our metaverse introduction article.

What is an NFT virtual land?

As mentioned, metaverse projects are digital worlds that users can often explore with their 3D avatars. SecondLive, for example, offers venues for concerts, conferences and exhibitions. While projects like SecondLive don't allow users to purchase a permanent virtual reality space, other metaverse worlds do. Developers create large maps of land divided into small plots intended for market sales.

To represent exclusive ownership of the area, users purchase NFTs tied to a specific plot of land. It is possible to acquire these lands directly from the project, through land sales or on the secondary market. What you can do with NFT land depends on each project.

What are the use cases for metaverse lands?

In addition to speculation, landowners can use their virtual space in several use cases:

1. Advertising - If your land is in a popular area or district and attracts a lot of visitors, you can make money by offering advertising space.

2. Socialization - You can host events on your digital land, including concerts, conferences and community gatherings.

3. Games - Your NFT land can be useful in an NFT game. For example, Axie Infinity's terrain provides extra resources, tokens, and crafting ingredients.

4. Work - Land that can be explored with a 3D avatar can be used as virtual office space or to provide digital services. PwC Hong Kong will use The Sandbox land for its Web 3.0 consultancy services.

Do global companies buy metaverse land?

Big brands and celebrities have already started buying land in the metaverse. Snoop Dogg, for example, is creating his own metaverse experience platform, Snoop Dogg Metaverse Experience, on The Sandbox. Adidas also purchased land on the platform for its metaverse project, AdiVerse. In addition to participating in the metaverse and NFTs hype, brands and companies will offer users the chance to interact with this new world, accessing metaverse services, games and products.

The trend has not stopped at the retail investor level. NFT land has already aroused the interest of many institutional investors. For example, The Metaverse Group made headlines by purchasing large amounts of digital real estate, which we'll talk about shortly. The group is virtually headquartered in Decentraland's Crypto Valley. In December 2021, PwC also purchased land in Decentraland, to offer Web 3.0 consulting services.

What affects NFT virtual land prices?

Pricing virtual land is similar to other non-fungible tokens or cryptocurrencies. There are three main factors to evaluate:

1. Utility – Virtual land differs from other NFTs in that it generally has a variety of use cases. Each unit will be different depending on the platform. For example, digital worlds like Decentraland allow users to customize and create different content on their virtual properties.

If your land is in a popular area or gets a lot of visitors, you can make money through advertising. Your land can also offer benefits for a particular blockchain game. Including increasing the staking bonus or having exclusive in-game experiences, like Axie Infinity.

2. The platform – NFT lands from popular platforms like Decentraland, The Sandbox or My Neighbor Alice tend to be more expensive. This is due to market supply and demand. The user base and interest level of these platforms are much larger when compared to smaller projects.

3. Speculation - Large sales of NFT land have caused a significant increase in the level of speculation. For example, NFT real estate company Metaverse Group spent around $2.43 million in November 2021, purchasing a plot of 116 plots of land in Decentraland. Each lot is 16 square meters, totaling 1,856 square meters of virtual land in the Fashion Street neighborhood.

Where to buy land in the metaverse

There are two main methods for purchasing NFT land in the metaverse. You can buy directly from the project's land sale or buy from other users through a marketplace.

An NFT land sale is a good option to buy your land at a lower price than on the secondary market. Most major metaverse projects with NFT land have seen a price increase. In other words, buying land at a sale tends to be the best choice. Some projects sell all of their lots at once, while others sell them in rounds.

The safest and most reliable way to buy land on the secondary market is through an NFT broker. This way, both the buyer and the seller have the security of a smart contract, which ensures that negotiations go smoothly for both parties. Binance NFT Marketplace and OpeaSea are two of the most popular options. Binance NFT Marketplace supports Ethereum and Binance Smart Chain. OpeanSea is compatible with Ethereum, Polygon and Klaytn.

Tips before buying your first land in the metaverse

Purchasing NFT land in the metaverse should be treated like any other type of investment or financial transaction. Be sure to do your own research and consider the points below:

1. Buy your NFT land from a trusted source. If you purchase the land through a project sale, make sure you have the correct official link. If you are buying land from someone else, never make a direct transfer to a wallet. The sale must always be made through a reliable marketplace or cryptocurrency broker. As mentioned previously, Binance NFT Marketplace and OpenSea are two excellent options.

2. Reflect on the decision to buy or rent NFT land. Depending on your needs, you may not need to purchase land. For example, you might want to organize a single event in a popular district. If the platform you're using supports rentals, the price will depend on traffic, proximity to other important land, and lot size.

3. Evaluate the NFT land project carefully. The design you choose will determine the usefulness and, to some extent, the cost of the NFT. If you intend to speculate and resell your land, evaluate the project's fundamentals, such as popularity, number of users and staff. If you're going to sell ad space or participate in another use case, research which metaverse platforms best suit your needs. Not all NFT projects will be successful, so be sure to consider the financial risks before purchasing NFT land. If you buy land that has no use or demand, you could end up keeping it forever.

Final considerations

For many, the idea of ​​selling virtual land may seem absurd. However, one need only look at the NFTs and digital collectibles sectors and the evolution of the metaverse concept to understand how NFT lands gained notoriety.

The idea is not so different from owning a website or any other virtual space. For example, some popular domain names have sold for hundreds of thousands of dollars. The main difference, however, is the way NFT land secures ownership. The technology world is preparing for the metaverse of the future. Therefore, the expectation is that the sale and demand for NFT virtual land will increase further.