RIYADH: Would people spend hundreds of thousands of dollars on virtual property? You bet they will. Many have already done so.
It’s more than just a virtual high that a celebrity like Snoop Dogg would resort to; companies such as PwC, Samsung and HSBC have purchased virtual land. JP Morgan recently opened a branch in the Metaverse.
Real estate purchases in the Metaverse topped $500 million in 2021 and could double to $1 billion this year alone, according to data analytics firm MetaMetric Solutions.
Companies like Xclusiverse have started betting on this demand. Bridging the gap between the real and virtual worlds, the company connects real estate brokers, owners, sellers and buyers interested in digital and real properties.
Developed by Unicorp Capital, the first phase of the platform provides access to thousands of land brokers and developers around the world to list their real properties in the digital world. The next step, scheduled for September 2022, will make it easier to purchase virtual goods in the metaverse.
“Real estate is facing challenges keeping up with technological and digital transformation. There is a lack of inventory and scalability for real estate agents. We don’t see very rich digital marketing strategies, sales processes modified or true immersive learning experiences,” Florina Onetiu, co-founder of Unicorp Capital, told Arab News.
“The real estate industry can solve real problems online by creating a community of people to buy and sell property safely in the real world and the metaverse,” she added.
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Realtors can access Xclusiverse by purchasing an annual subscription with multiple features, including virtual office space. Membership can be customized according to the needs of each company.
“Why now? The metaverse economy is big and growing. Data projections show that the compound annual growth rate of expected revenue will reach 44% this year,” Onetiu said.
“The growth is due to its increasing popularity, the slippage of COVID-19, the advent of augmented or virtual reality, and the practical use of the metaverse to purchase digital assets using crypto and non-virtual tokens. When Facebook launched its metaverse project last year, everything blew up,” she added.
In October 2021, Facebook announced that it was renaming Meta with a strong focus on all things Metaverse. Data from MetaMetric revealed that home sales jumped nine-fold to $113 million in November. Grayscale, a crypto asset manager, has predicted that the digital world could become a trillion dollar business.
A report from JP Morgan detailed that the average price of a virtual plot of land doubled in six months in 2021, reaching $12,000 in December 2021 across the four major metaverse platforms. According to a report by metaverse real estate developer Republic Realm, the most popular place to buy virtual land is Sandbox, which is home to more than 60% of land sales made in 2022. Warner Music, Gucci and Snoop Dogg have all purchased assets virtual in Sandbox.
Buying virtual land is rooted in blockchain, a concept based on decentralization, where no central bank or government can impose rules. However, regulations designed to protect virtual assets and support this nascent industry are on the rise, especially in Dubai.
“We anticipate that more startups targeting the virtual asset space will choose Dubai either as a launchpad for their operations or as a key market,” said Nadim Bardawil, Partner at BSA Legal, an international business law firm. .
“The UAE has already placed itself squarely on the list of jurisdictions willing to regulate nascent technologies such as those used to create, buy or sell virtual assets. This development continues to reinforce this strategy.
He added that although the recently created Virtual Assets Law has been published in the UAE, it does not explicitly outline how virtual assets will be regulated. Part of the Virtual Assets Regulatory Authority’s mandate is to promulgate a regulatory framework for the regulation of virtual assets, and “we expect the first set of regulations to be released in the second quarter of 2022.”
A self-funded startup, Xclusiverse is targeting a funding round in June to scale up operations and firmly propel the real estate industry into the digital age. The plan includes facilitating the purchase of virtual assets online and transforming it into a virtual meeting place to conclude transactions in the real world. Each real estate broker member of the platform will have their own office in the metaverse.
“We created these spaces to allow our members to expand their portfolio to prospects and clients around the world and to socialize and bring their virtual relationships into the real world, creating a meaningful service market for real estate agents. that transcends borders,” Onetiu said. “Metaverse is the new social media.”