What do you do with a $ 69 million work that doesn’t physically exist?
This is the question facing the Singapore investor named Metakovan, who made headlines last month when he bought the digital artwork “Everydays: The First 5000 Days” by American artist Beeple from Christie’s. Read more
The paper is a non-fungible token (NFT) – a new type of virtual asset that has the property status and authenticity verified by the blockchain. NFTs exploded in popularity in 2021, with prices rising. Read more
Metakovan, real name Vignesh Sundaresan, intends to exhibit works of art in four environments in the virtual world. He works with architects to design gallery complexes that the public can enter through web browsers or virtual reality technology.
But art is just one part of a new blockchain-based virtual world economy where land, buildings, avatars, and even names can be bought and sold as NFTs, often bringing in hundreds of thousands of dollars. In these environments, called metavers, people can walk with friends, visit virtual buildings and participate in virtual events.
Metakovan’s plans are an ambitious one, but he says he is the largest NFT investor in the world. Its collection of NFTs and other cryptographic assets, the Metapurse fund, is valued at $ 189 million, according to NonFungible.com, a site that aggregates data on sales history in NFT markets.
“The current bill of exchange NFTs you see is just buying – people want to buy NFTs, swallow as many of them as they can,” said Anand Venkateswaran, aka Twobadour, who runs the Metapurse fund with Metakovan.
“But it’s just the tip of the iceberg. The real explosion will happen when they can … experience these NFTs as intended. If it’s a virtual terrain, you should move into it, have a captivating experience in the. “
In what will be one of the biggest names to join the party, video game maker Atari (ATAR.PA) told Reuters that it intends to launch its own blockchain-based virtual world and will announce details soon.
Online media will be “very, very large,” regardless of bitcoin price fluctuations, said Frederic Chesnais, head of Atari’s blockchain division and former CEO of the company. NFT real estate could one day bring in millions of dollars, he added.
Investors warn, however, that while big money is flowing into NFTs, the market could be a price bubble, with the risk of major losses if the hype goes down. There could also be primary opportunities for fraudsters in a market where many participants operate under pseudonyms.
A PLOT OF VIRTUAL LAND: over 500,000 USD
The NFT frenzy has increased interest in blockchain-based online environments. The best known are Decentraland, Cryptovoxels, Somnium Space and The Sandbox, where the prices of virtual real estate reach new highs.
Decentraland recorded over $ 50 million in total sales, including land, avatars, usernames and wearables, as well as virtual outfits. A 41,216-square-foot virtual plot of land sold for $ 572,000 on April 11, which the platform said was a record.
Another Decentraland plot sold for $ 283,567 on March 21, according to NonFungible.com, while Somnium Space said a property on its platform brought in over $ 500,000 on March 16.
Metaverse enthusiasts compare the rush to buy virtual land with the fight for domain names in the early days of the internet. Currently, there are several thousand unique landowners on each of the major blockchain-based platforms.
Their theory is that as more people gather in these environments, land in central locations will be in high demand due to visitor traffic.
“All virtual land and these virtual spaces are virtually real estate that experiences will begin to focus on, that attention will begin to focus on,” Twobadour said.
“All the attention is here and it can be monetized in a million different ways.”
To date, there is a relatively small number of people raising land prices in these worlds.
In Decentraland, there were 334 buyers in March, sending monthly land sales volumes of more than $ 4 million, from $ 767,400 in February with 184 buyers and $ 246,134 in January with 111 buyers, according to NonFungible.com.
An NFT investor named Whale Shark, whose collection was valued at more than $ 20 million by NonFungible.com in February, said he spent 200 of the cryptocurrency Ether on land in Cryptovoxels and another 200 in The Sandbox in 2018 and 2019. .
These estates cost about $ 60,000 each at the time, but are now worth more than $ 400,000 a piece, he added, speaking on condition of anonymity.
Some virtual worlds have their own cryptocurrencies: Decentraland’s MANA has grown by more than 3,500% in the last year, according to Coinbase.
VIRTUAL FESTIVAL, SOMEONE?
Some early virtual land investors who bought early are now selling to companies, said Samuel Hamilton, community and events at the Decentraland Foundation.
Atari, ahead of its plans to open its own blockchain-based world, has licensed a retro arcade within Decentraland and is set to open a casino, while an area called “Crypto Valley” hosts various crypto companies.
Decentraland hosted a virtual fashion show in collaboration with Adidas, where the designs were auctioned off as NFTs. It also attracts the interest of musicians who can perform in space, selling tickets and goods in the form of NFTs.
“We will have several well-known festivals around the world that do all the stages, and when we get there we expect hundreds or thousands of people,” Hamilton said.
Last year, American rapper Travis Scott attracted an audience of 27.7 million visitors to five concerts at Fortnite, the popular online game owned by Epic Games.
IS CRYPTO WINTER COMING?
Sebastien Borget, co-founder of The Sandbox, described the business of virtual worlds as a new nation and said that the NFT-based economy will surpass the real world economy in a decade.
However, there are many in the developing industry who warn of future dangers for investors.
“I expect a cryptographic winter in the next few months, the whole NFT boom will explode and then all the value will absolutely collapse,” said Ben Nolan, founder of the virtual world Cryptovoxels.
“Making NFTs as an investment or as a way to make money is very poorly advised.”
However, he sees a future for virtual worlds and NFTs.
“I think most people will use virtual worlds? Probably not, but I think a lot of people will use it, and I think NFTs are a big part of that growth,” he said.
“In fact, walking with another person in a virtual space and looking at art together is a great way to spend time,” he added.
Whale Shark said the vast majority of NFTs have no commercial viability and expect only a small number to emerge as winners.
But some investors like Australia-based Mateen Soudagar, aka DCL Blogger, have little interest in moving back into real-world investment.
Soudagar says he has earned millions of dollars through cryptocurrency and NFTs, but rather than cash in, he keeps about 75 percent of his money in cryptocurrencies and believes many of his colleagues do the same. Apart from updating the laptop, it has not changed its lifestyle.
“If you are a believer in the movement, then you think the world will move into this space,” he said. “So when you put it in the fiat, go back.”
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