How to Invest in Metaverse UK in 2022

What kind of Metaverse NFTs should I buy?

While there are dozens of different types of Metaverse NFTs to invest in, the key types are:

  • Metaverse lands NFTs
  • Metaverse builds NFTs
  • Metaverse gaming and social NFTs

Acquire Metaverse Land

After buying Metaverse coins, the next investor step is usually to use their crypto to buy virtual real estate in the new frontier. According to McKinsey, this potentially becomes a $5 trillion market by 2030. [11]

To do this you need to:

  • select one or more popular platforms
  • purchase crypto valid in that Metaverse
  • Explore its layout and land available for purchase
  • choose a parcel of land
  • make your purchase

While there are second-hand market places for NFTs, such as OpenSea, novices are better off buying NFTs directly from the metaverse source to avoid potential scams, which can be hard to spot at first.

Buying virtual land increases the risk factor, but also comes with potentially higher rewards. Assuming a Metaverse is successful, its land is going to become more and more valuable, both in relation to its crypto, but also in relation to fiat currency.

However, just like in reality, land is typically more expensive closer to activity hives and cheaper further out. This can make buying land a complex decision, usually factoring a compromise between affordability and a central location.

Further, one parcel of land in the Sandbox is about 300 square feet in the game world. In Decentraland, it’s just 50 square feet. For perspective, the average UK house is about 1,000 square feet.

You also need to consider buying land in multiple Metaverses in order to diversify against potential losses.

Much like real life property investing, it’s also possible to rent out land in the Metaverse through PARSIQ’s IQ Protocol, a DeFi platform that provides ways for developers to generate income. Rents are negotiated and subsequently enforced via smart contracts.

Does Metaverse land hold value?

Metaverse land has sunk in value in 2022. According to WeMeta, the average price of lands across Decentraland peaked at $37,238 in February 2022, but has now fallen to just $5,163. Similarly, the Sandbox’s average sale price dropped from around $35,500 in January to around $2,800 by August. [12]

And overall, the average price per parcel of virtual lands across the six major Ethereum metaverse projects collapsed by 85% from approximately $17,000 in January to around $2,500 in August.

Depending on your perspective, this is either a disaster, or a once-in-a-lifetime investing opportunity.

What is the Monopoly strategy?

Users who buy enough adjacent land plots can combine them to create a single estate, usually doing so in the most desirable central locations surrounded by roads and virtual foot traffic.

For example, one Decentraland estate entitled ‘The Secrets of Satoshi’s Tea Garden’ is made up of 64 separate plots of land and sold for 1.3 million MANA in 2019. [13]

The Monopoly strategy is to buy individual plots of land in popular locations that are needed to complete estates. The idea is that neighboring investors will pay higher prices to acquire it, much like the board game Monopoly.

This is a high risk, high reward strategy, as it requires your Metaverse neighbor to be both interested and liquid enough to pay a premium for your piece of land.

Rent or buy prefabricated metaverse buildings

Instead of buying land, it’s possible to directly rent or buy prefabricated structures that can be directly put to use in online worlds. For example, you could buy a virtual storefront to enable a company to showcase 3D digital replicas of physical assets in the Metaverse. This strategy has previously been employed by larger companies such as Warner Bros., Nike, and Ralph Lauren.

Positively, the method can apply to a vast range of sectors, including retail, art and entertainment. However, the entry cost to gain exposure can be high. You need a large space to generate value effectively, making the minimum investment threshold too high for most retail investors.

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