In 1992, writer Neal Stephenson published his third novel, titled “Snow Crash”. In it, Stephenson’s characters interact in a fully digital environment where appearances can be changed on a whim, and digital real estate is just as valuable as their real-life counterpart. Stephenson called his digital environment “the Metaverse.”
Twenty-eight years later, public companies like Meta (formerly Facebook) and decentralized autonomous organizations (DAOs) like the Decentraland Foundation have been working to make the metaverse a profitable reality.
This has opened up entirely new income opportunities for retail investors, gamers, digital collectors and developers.
It is important to note, however, that the metaverse is still in its infancy and its value proposition has yet to be demonstrated. Any investment in the metaverse should be considered speculative and highly risky.
The least volatile option for retail investors looking to buy in the metaverse is to invest in publicly traded companies whose business models or profitability are tied to the metaverse. The list includes:
- Meta Platforms Inc (NASDAQ: FB) – In October, Mark Zuckerberg announced that the company formerly known as Facebook Inc. it would undergo a major rebranding and become Meta Platforms Inc. Since the announcement, Meta has released a virtual reality metaverse platform, Horizon Worlds. Meta’s Oculus Quest 2 VR headset was also one of the hottest gifts during the holidays. It remains to be seen, however, whether the increase in headphone sales will result in more horizon worlds users.
- Roblox (NYSE: RBLX) – Roblox is an online metaverse platform that allows players to create and share virtual worlds with other Roblox users. Roblox has grown rapidly since its inception in 2006, with 9.5 million independent developers, 24 million unique digital experiences, and 49.4 million daily active users, up 35% year-over-year. However, despite these numbers, the company has yet to make a profit.
- Boeing (NYSE: BA) – Boeing is using the metaverse to expand and improve production capabilities. In an interview with Reuters, Greg Hyslop, Boeing’s chief engineer, said the aircraft manufacturer is planning to create a proprietary digital environment where its human, computer and robot employees can communicate and collaborate seamlessly around the world.
- Microsoft (NASDAQ: MSFT) – Microsoft is trying to find its metaverse niche in the professional world. The company plans to release Mesh for Microsoft Teams in 2022. The add-on to the popular video conferencing platform will allow people to generate custom avatars and collaborate in a holographic 3D environment that transcends geographical boundaries. A key feature of Microsoft Mesh will be Holoportation, which is a tool that allows users to access the previously mentioned digital environment with a VR headset. The user appears as a realistic digital representation of himself with the ability to interact with team members as if they were in person. On February 2, 2022, Business Insider released a report stating that Microsoft has stopped working on a retail-focused augmented reality headset with metaverse capabilities due to the “lack of a unified strategy.” It remains to be seen how this development affects his metaverse efforts aimed at business.
What is metaverse earth?
Although the metaverse is still in its infancy, platforms like The Sandbox and Decentraland have already started selling digital real estate in the form of non-fungible tokens (NFTs), digital tokens on blockchain networks that can represent a wide range of unique items. When an individual buys a piece of metaversa land, the blockchain network that powers the metaverse platform verifies the sale and transfer of ownership.
Once the virtual property is purchased, the owner of the land metaverso NFT can rent, sell or build on his digital property. Japanese video game maker Atari recently purchased 20 plots of digital land in Decentraland and created its own crypto casino. Using their own native Atari token based on ERC20, gamblers can place bets and receive tax-free crypto winnings. Atari also announced plans to launch its own virtual hotel complex in 2022.
How to buy land in the metaverse and other digital objects
Several metaverse platforms have created marketplaces where users can buy and sell digital land and other collectibles in the form of NFT. Here’s how to do it.
- The user who wants to buy metaverse real estate must identify which platform he would like to buy digital land. Popular options are Decentraland and The Sandbox, although there are many more. Do your research before buying any land in the metaverse.
- The user must create a digital cryptocurrency wallet, a type of computer software that connects to a blockchain network and stores cryptocurrency and is compatible with the associated blockchain that powers the metaverse platform.
- From there, the buyer must access the market of his chosen metaverse platform and connect his digital wallet to it. Marketplaces can typically be found on metaverse platform websites.
- At this stage, the purchase of digital land closely resembles the purchase of land in the physical world. A buyer must consider the price, location, and future value of the digital earth they are considering buying.
- Once the buyer has identified a piece of land, he must acquire the tokens or coins with which to buy it and store them on his digital wallet. The type of token or coin that will be needed to execute the transaction varies depending on the metaverse platform. For example, to purchase digital land in Decentraland, the user would have to purchase MANA tokens. If he wanted to buy land in The Sandbox, he would have to acquire SAND tokens.
- If the buyer has already linked his digital wallet to the metaverse market and financed it, all he has to do is make an offer on the land or buy the land outright. The cost of the land will be removed from the digital wallet and the NFT representing the land will be transferred to the user’s wallet.
- The same process applies to the purchase of other metaverse NFT items such as avatar clothing and accessories.
Metaverse projects on blockchain networks are powered by fungible tokens, tokens that are divisible and can be exchanged with each other. These tokens are used to purchase digital assets such as virtual land or avatar outfits. They can also be exchanged for other crypto or fiat currencies. Some metaverse cryptocurrencies also allow their owners to vote on decisions within a metaverse platform, such as where to invest money or what new features to release first.
Theoretically, as the value of digital assets increases, so will the value of the associated tokens. In addition, some metaverse platforms such as Decentraland burn all the MANA tokens used to purchase digital assets, permanently removing them from circulation and increasing the value of the remaining tokens.
Below are the metaverse tokens listed in descending order by market capitalization size (market capitalization). These options are inherently risky and should be considered a speculative investment. As a general rule, it is advisable to never invest more than you are willing to lose.
- Decentraland (MANA) – With a market cap of around $6 billion at the time of writing, Decentraland’s MANA token powers the Decentraland metaverse and is used as a medium of exchange on the platform’s marketplace.
- The Sandbox (SAND) – The Sandbox is focused on a metaverse of user-generated content, just like Roblox. The SAND token is assigned to people participating in The Sandbox alpha user test. SAND tokens can also be purchased on digital exchanges. SAND is a token of utility, governance and staking. SAND owners can use it to purchase digital goods and services, vote on proposed initiatives within The Sandbox, and stake their SAND to earn additional rewards.
- Axie Infinity (AXS) – Unlike Decentraland’s MANA, which is used to purchase digital goods and services, Axie Infinity’s AXS token is a governance token. Those who own AXS will be able to vote on proposed decisions that will affect the Axie Infinity ecosystem, including how funds are spent in the community treasury. There are future plans to modify the AXS token so that it can be used to purchase digital goods and services on Axie Infinity.
- Enjin Coin (ENJ) – Enjin is a blockchain gaming company. Unlike The Sandbox or Axie Infinity, which only offer a single metaverse product, Enjin offers its users a number of interconnected gaming experiences to make money. Enjin is unique in that its native token, ENJ, is “infused” into every NFT minted within its ecosystem, likely providing real value for digital assets.
The future of the metaverse?
Companies that have invested heavily in the metaverse are spending millions of dollars to convince consumers that the dawn of the metaverse is upon us. But will it usher in an era of mass adoption and barrier-free digital interaction, or will it be a niche product, reserved for gamers and future tech enthusiasts? Only time will tell. For now, retail investors interested in the metaverse should explore these platforms and consider the future value of the metaverse for themselves.
Further reading on the metaverse
Virtual beers and digital orgasms: welcome to the era of metaverse trade
Executives from Adidas, Budweiser, Clinique, NARS Cosmetics and other major consumer brands explain why the metaverse is “seismic” for their businesses.
Web3 and the Metaverse are not the same thing
Web3 ideas like NFTs are just one part of building the next generation of the Internet, says podcast host “Hello Metaverse.”
Ethereum in 2022: what is money in the Metaverse?
DeFi, NFT, stablecoins: most started on Ethereum. And next year? This post is part of CoinDesk’s Future of Money Week.