Take a stroll around any neighborhood and one of the first things you notice is the number of real estate signs. No matter how good looking the properties and their gardens are, you can guarantee that real estate signage is the bane of many streets. And with so many property agents vying for commissions in the real world, then it’s probably only a matter of time before the first agency is set up for buyers to navigate digital real estate on new metaverses.
So we present to you the very first ever digital virtual real estate agency which is called Republic Realm. It’s a private investment platform that exclusively invests in property that’s located in the virtual world. And just in case you think this idea is totally bananas, we should like to point out that the affiliate, OpenDeal Inc, just received a cash injection of a whopping $36 million from Galaxy Digital. This is part of a major crypto investment which is helping to propel the whole digital real estate marketplace upwards and outwards further into the public eye.
Over the last few months there has been an increased interest in all aspects of virtual real estate. Republic Realm put this down to a number of factors that have simultaneously collided. These include the increasing acceptance of emerging technologies such as virtual reality, along with changes within blockchain technology, such as the allowing of smart contracts and minting of NFTs. And finally, we should mention the fact that the pandemic has led to many people having much more time to spend online.
“A lot of these trends are converging now and COVID-19 has really accelerated their growth,” TJ Kawamura, who’s the head of product for Republic’s real estate arm. “I think people are trying to find new ways to engage and create community. It’s not just for the nerds anymore,” he joked.
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The last 3-years Kawamura has been keeping an eye on all virtual metaverses that have been springing up right, left and centre. In launching the fund, he decided to focus on the management and development of virtual lands, as well as their acquisition on such metaverse platforms as Sandbox, Axie Infinity and Decentraland. Investments are converted into NFTs or Non Fungible Tokens. Potentially these are blockchain assets that can be used to prove both ownership and scarcity of a digital asset. Unless you’ve been living under a rock, you’ll be fully aware that NFTs have been embraced by art, music, fashion and gaming communities.The land parcels that Republic Realm buys on these virtual worlds are valued according to their location, size and previous sales price.
“This whole craze with NFTs has really pushed it to the next level,” he said. Kawamura suggests a direct correlation between the growing awareness and popularity of blockchain, especially the ethereum blockchain that has led to a boom in both NFTs and now virtual real estate. As he points out, “Decentraland is one of the biggest worlds. About three years ago you could buy a parcel for $550 USD. Now, it’s trading at about $8,000 USD.”
He also points to a metaverse called The Sandbox and says there has been a similar trend there. “A parcel was trading for $30 USD four months ago and now it’s trading at $880 USD,” he said. “So the space is really blowing up.”
Of course, the question on many people’s lips is what can you do with this virtual that and what is driving its increasing price? Republic Realm and its investors see a huge potential for profits. Once land is purchased, then it can be used for any number of purposes including storefronts for selling merchandise, advertising space, virtual art galleries and more. Right now there are even virtual casinos situated on metaverses that pay real people to staff their games. Sotheby’s has opened a virtual art gallery. As Kawamura says, “There’s a lot of opportunities for brands to come in and access these new spaces in new and creative ways,”
With traditional real estate being so costly and also requiring long-term upkeep, it makes sense for new investors to buy digital real estate. Not only is this more affordable, but it’s more sustainable and allows the owner of virtual land an accessible entry point into the whole metaverse. “It’s much more difficult if you want to build the house of your dreams in the real world,” Kawamura said. “You can get onto this in a matter of minutes and it doesn’t require you to be a graphic designer.”
To give you an idea as to how the digital real estate market is really taking off, just a few months ago the contemporary artist Krista Kim, who describes himself as a “Techism artist,” designed a digital home which was called Mars House. It was put up for sale on the virtual trading platform SuperRare as an NFT, and within hours sold for 288 Ether, which is $514,557.79. So what did the buyer get for that money? A set of 3D digital plans so they can upload their own metaverse house. The sale also comes with an exclusive soundtrack from Jeff Schroeder of The Smashing Pumpkins.
Right now you can find real estate brokers such as Shane Dulgeroff, who’s selling physical properties with an NFT attached to Open Sea. Separately, just last month a plot in Paris sold for over $3,500 having been purchased for less than $100 on the new metaverse platform, Next Earth.
“You now have people from the traditional real estate market coming in and saying ‘how can I take what I know from the real world into the virtual world?,’” Kawamura said. The Republic Realm is presently only open to accredited investors. Kawamura believes the virtual real estate industry is rapidly heading towards a new peak. As he says, “It’s the beginning of the virtual Renaissance.”
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