Even though Facebook has gone all in on Meta, most of us aren’t exactly living in the metaverse quite yet (unless you count Zoom meetings). But at least one segment of our future digital universe is attracting some pretty tangible valuations — this past week saw record-breaking NFT real estate sales in virtual worlds like Decentraland and crypto games like Axie Infinity. So why are people shelling out for digital properties? And what exactly is the metaverse? Let’s dig in.
A plot of virtual real estate in the 3D world Decentraland just sold for $2.43 million, more than doubling the previous record from June. The buyer, Decrypt reports, was an “NFT-based virtual real estate company” called Metaverse Group, which intends to use the property to “facilitate fashion shows and commerce within the exploding digital fashion industry.”
The NFT game Axie Infinity also set a new record, after “extremely rare” in-game land sold for $2.48 million. The virtual “Genesis” property is highly desirable for its central location on the game’s map and its scarcity — there are only 220 Genesis plots within the game’s 90,601 plots. The trailblazing play-to-earn game, which involves raising and battling Pokémon-like creatures called Axies and earning crypto rewards, was the best-selling NFT collection in the third quarter of 2021, with trade volumes topping $2.5 billion.
But what is the metaverse, exactly? Depends on who you ask. The word “metaverse” comes from sci-fi pioneer Neal Stephenson’s 1992 cyberpunk novel Snow Crash, and most people seem to agree that the metaverse will one day evolve into an all-encompassing, persistent virtual world like the one that Ready Player One imagines. For now, it’s a catchall term for technologies that point in that direction, including everything from people in Venezuela making a living playing Axie Infinity, to virtual fashion shows in Decentraland, to legacy brands like Nike pursuing virtual goods.
Why it matters… The metaverse is already seriously valuable territory — a recent report from crypto-fund giant Grayscale pegged the total market value somewhere north of $1 trillion. And with many of the world’s biggest companies making serious metaverse plays, that number seems likely to grow. It’s also worth noting that — despite the recent buzz — immersive digital universes have existed before. As The Wall Street Journal notes: “Some of what’s been said about the metaverse in the past year could be ripped straight from the late 2000s, when proto-metaverse Second Life enabled, for millions of users, much of what is currently claimed as new.”