news devices NFT: The metaverse is going through a real estate crisis
In 2008, the world witnessed a high-risk housing crisis. In 2022, the recession is happening this time in the virtual world, more commonly known as the metaverse.
Since 2021, the metaverse has become a real concept that sometimes transcends the reality of our current digital practices. This interest in the virtual world of tomorrow has been largely highlighted by Meta, formerly Facebook, and its social metaverse project.
The popular 3D environment called the metaverse aims to replicate reality as faithfully as possible. As a result, the concept of ownership has been applied to the metaverse. In fact, to take advantage of its habitat in the digital world, many metaverses are the subject of sale A digital plot of land in the form of NFT. These tokens can usually be obtained for cryptocurrencies.
In the logic of anticipation and profitability, many investors did not want to miss the opportunity. Thus, some set their pawns long before possible mass adoption by purchasing land or real estate in different more or less known areas. These investors bought these lands in the hope of making a profit when the time came.
This has represented excitement about NFTs and the metaverse $500 million sales in 2021. Only, after this metaverse real estate boom, these real estate in the form of non-fungible tokens suffered a huge loss in value since the beginning of the “crypto winter.”
As Bitcoin, which is tied to traditional stock indices, continued to decline throughout 2022, it was time for an appraisal. The queen of cryptocurrency has taken the entire economy around web 3 in its downfall. Consequently, altcoins, NFTs, and even the metaverse have suffered an overall decline in value.
According to WeMeta, a platform dedicated to selling virtual lands on various metaverses, Decentraland and The Sandbox real estate transactions down 97% Since November 2021. From 16,000 sales per day to just 2,000 in 8 months, the sector has also seen a drastic split of commodity prices to adjust to demand. Consequently, many digital asset owners find themselves in a bind.
As an example, for the most popular metaverse named Decentraland, then That the plot (land) costs approximately 17,000 euros In July 2020, two years later It is trading around 1.85 or ETH or 3000 euros.
This virtual 3D space that is supposed to represent the Internet of tomorrow is still in the development stage. Therefore, it is important for companies to lay a sound foundation when the subject is not the scene of a speculative bubble. Moreover, this decrease in enthusiasm about the metaverse could also have the opposite effect, i.e. slowing, or even stopping, the investment and development of projects related to tomorrow’s virtual world. This is the option Tinder made for its Tinderverse.
It is important to specify that the metaverse economy is not an isolated case, emerging markets are the subject of excessive enthusiasm and therefore extreme volatility. In this context, the sector should be given several more years so that it can develop in accordance with the expectations of users.