Factors affecting land prices in Metaverse

In this report, we examine the opinions of Joel John, the investor of the LedgerPrime venture fund, about the factors influencing the pricing of lands in Metaverse. John mentions 5 important factors in determining the price of Metaversi lands.

According to Cryptonews, the price of real estate in Metaverse is determined based on the number of requests for it. In the following report, an investment fund manager explains how metaverse land can be turned into an income generating machine for its owners.

Also read: Development of metaverse strategy; Recommendations of JP Morgan experts for businesses in this field

According to John, the problem is:

What does it mean to be a neighbor in Metaverse? Why does it matter at all? What would happen if Snoop Dogg had multiple Earths in the Metaverse? Will the price of the neighbors of all those lands go up? To be honest, no one knows the answers to these questions.

John goes on to explain that, unlike tokens, Metaverse plots cannot usually be broken down into smaller plots based on client capital, and buying these plots often requires significant capital. For example, the average price of a piece of land in Sandbox is about $10,399 and in Decentraland is about $11,954.

To understand the concept of these prices, we must first understand what the meaning of earth is in Metaverse. According to John, the concept of Earth is nothing but a space where you can digitally express whatever you want.

According to John, the 5 main factors that can affect the value of a Metaverse plot of land are:

• Number of people entering (Overall Footfall)
• Memetic proximity
• Geospatial context
• Financialization
• Art

The number of people entering is the first factor that refers to the number of people who will encounter that piece of digital land. The same concept exists in the physical world. For example, non-digital commercial real estate will be more expensive in high-traffic areas.

We have named the second factor influencing the price of Metaversi lands as memetic proximity. This concept can be equated with the ability to get close to a person or thing in the metaverse that attracts a lot of attention.

The geographical context refers to the fact that people can gain fame and their land becomes more valuable due to the similarity of their property with the property of a well-known person or by owning a piece of digital land next to the digital land of a famous person or company.

Due to the mutual and increasing relationship between finance and Metaverse, financialization will also be the third factor affecting land prices in Metaverse. Many projects related to the financial world take advantage of Metaverse’s digital lands in their investment strategies. As a result, the lands that are included in the strategy of these companies, for example, have the ability to be divided or can be rented, will have more value.

Finally, land value in the metaverse is always influenced by the game design in which the lands exist. If a game’s interior art and graphics are stunning, it’s likely that the game developers will auction off the lands, and then the land owners can charge other users for using or traversing their land.

Some opponents of lands being valuable in the metaverse believe that given that lands can be created indefinitely in the metaverse, their value will not increase much. John considers these people’s arguments to be illogical.

This logic is like saying that websites can’t get too valuable; Because there is no limit to creating countless websites.

John writes about it:

Metaverse lands have high barriers to entry and even when a group of people owns them, they prefer to develop them rather than think of selling them immediately and exchanging them for cash.

In John’s opinion, currently, metaverses governed by the model of Decentralized Autonomous Organizations (DAOs) are the epitome of a decentralized Internet, with true user ownership and a dash of madness.

Also read: Kocoin Report: DeFi Apps Move to Use DAOs to Cope with Regulation

John says about this:

In my opinion, the future ahead of us is a kind of redesign of the past.