DappRadar recently reported that Virtual land has become a booming business, selling for hundreds of thousands to even millions of dollars. The price of virtual land is driven by the popularity of the platform and scarcity of assets available.

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What is virtual land and where does it exist?

Akin to real estate (physical land on Earth,) thanks to Metaverse, there now exists virtual land in a virtual space. This virtual piece of land, referred to as a parcel, can be bought through a virtual land provider and then converted into anything - ranging from empty block to a 5 star hotel.

Decentraland, a provider of virtual land for example has 90,000 parcels of land, each roughly 50x50 feet. Investors in Metaverse believe there’s gold in those pixelated hills.

As reported by The New York Times (NYT), In October 2021, a blockchain technology company, Tokens.com acquired 50% of Metaverse Group - one of the world’s first virtual real estate companies, for about $1.7 million. Then a month later, it closed an even larger land deal in Decentraland’s fashion district for roughly $2.5 million. The company, plans to develop the area into a virtual commerce hub for luxury fashion brands, à la Rodeo Drive or Fifth Avenue.

Which Platforms offer virtual land?

The boom of virtual land and Metaverse, coupled with lure of high return potentials, has attracted many entrepreneurs and developers to build platforms supporting these trends. Two of better known providers in this industry are:

Decentraland: One of the more mature Metaverse platforms, running on Ethereum, it allows users to buy, virtual land, NFTs, trade in their native crypto MANA. In Decentraland, three aspects influence the value of land: Size, Proximity to hot spots, and if it’s next to a road. The biggest sales have been for estates, which are basically a bunch of land parcels bundled together.

Sandbox: Sand also uses Ethereum and offers more user freedom to create amazing creations in their virtual space. Virtual land evaluation is based on size of the estate and the proximity to brands or communities. It's also Snoop Dogg’s platform of choice, where he has recreated his villa, displays his $17M NFT collection, sells his own Snoop Dogg NFT collection, and hosts private parties and performances. Janine Yorio’s virtual real estate development company, Republic Realm, spent a record $4.3 million on a parcel of virtual land on the same platform. 

Should I give into this and start buying virtual land?

Yorio, in a CNBC interview shared that her company sold 100 virtual private islands last year for $15,000 each. “Today, they’re selling for about $300,000 each, which is coincidentally the same as the average home price in America,” she said.

Buying virtual land is quite simple; either directly from the platform or through a developer. Once purchased, users can build on their land and make it interactive. “You can decorate it, you can change it, you can renovate,” Yorio says. “It’s code.”

If you'd like to enter the world of virtual real-estate, do your research, as both the market and technology are still maturing. Every platform provider will have their nuanced approach, and buyers investing in the Metaverse will have their own motives. 

Mark Stapp, professor at Arizona State University, commented that. “I would not put money into this that I didn’t care about losing. I certainly wouldn’t,” Stapp says. “If it continues the way it’s going, it is most likely going to be a bubble. You’re buying something that isn’t tied to reality.”

What is clear is that, no matter where you look, location (just like the real world) will be the driving factor when buying a plot of land, influenced by factors like virtual foot traffic and aesthetics.

“The metaverse is the next iteration of social media,” said Andrew Kiguel, CEO of Toronto-based Tokens.com. Just like property in the real world, Kiguel says the metaverse is about three things: location, location, location.