Prices on real estate in the metaverse are mainly determined by the number of people that will get exposed to it, and how well it can be turned into a yield-generating machine for its owners through various monetization strategies, a hedge fund principal who specializes in digital assets has argued in a new essay.
“What does it mean to be a 'neighbour' in the metaverse? Why does it even matter? What if Snoop Dogg had multiple houses in the metaverse? Do land prices near all those houses get a premium? Frankly, nobody knows,” Joel John, a principal at the digital asset-focused investment firm LedgerPrime, opened his essay by saying.
He went on to explain that unlike tokens, which can be divided into smaller parts, digital plots of land in the metaverse generally require significant amounts of capital to buy. For instance, he said the average price of a plot of land in The Sandbox (SAND) is around USD 10,399, while it is approximately USD 11,954 for a piece of land in Decentraland (MANA).
To understand these prices, John wrote, it’s important to first understand what land in the metaverse really is. And according to him, it is nothing more than “a plot where you can express anything digitally.”
More specifically, the professional investor argued that there are five main factors that can impact the value of a piece of digital real estate:
The first among these, the “overall football” refers to the number of people that will get exposed to a piece of digital real estate, much like how traditional commercial real estate is more expensive in areas where many people pass by.
Then comes what the author calls “memetic proximity,” which he described as the ability to be close to something or someone in the metaverse that is expected to
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