How the Metaverse is Flipping the Real Estate Paradigm
One of the most enlightening aspects of working full-time in crypto is the ever-present reality that while being on the cutting edge of technology is possible, there are simply too many edges to be encapsulated at once by a single person. Now that we’re technologically flirting with the inflection point on the second coming of Moore’s law, there are sights to behold, thoughts to pontificate, and novel worlds to experience — the latter of which has piqued my interest in recent months, and really resonated with me earlier this afternoon.
With Hartmann Capital’s upcoming launch of a metaverse fund just around the corner, our team has been splitting brain power amongst both sectors (Crypto + Metaverse) and smoothly blending the two together to ensure a fluid and native level of expertise between the two. One such example of integration was TempleDAO’s opening ceremony being conducted in Cryptovoxels, a metaverse integrated with Ethereum. (A co-analyst of mine participated in it, you can read about it here)
Virtual desktop and the apartment
There are two key ideas that catalyzes my desire to write about this: Virtual Reality immersion, and digital scarcity- both of which build atop each other and drive demand for another. We’ll start with the former — which helps with visualization of this concept.
My most common in-real-life workspace isn’t one too bad — but it is sometimes nice to have a change of scenery. I oftentimes have my Oculus Quest 2 VR headset with me, ready to be turned on to hop into a different universe.
One app I’ve utilized before, but not too extensively, is Virtual Desktop — a native app for oculus that allows you to stream your computer in real time to your headset and allows you to treat it like a “wearable screen” so to say. I usually opt not to use this, as I typically work around others and engage relatively frequently. This afternoon, I decided to hop in to do some isolated deep work.
The handful of times I’ve “dived” into virtual desktop, I’ve usually stayed Isolated into one of the default ambiance visuals- a black presence surrounding my computer screen. While this is effective for zoning in and isolating distractions, I sometimes yearn to have presence that surrounds me.
That’s when I switched into the “Modern Apartment” setting, to change my surroundings. All of the sudden, I was transported to a modern apartment, sitting in a desk looking at a virtual screen with my actual screen content positioned on it. I looked around, with 360 degrees of freedom, to find a tastefully minimalistic apartment around me — positioned approximately 40 stories into the sky. I walked around (in reality), and explored the apartment (virtually).
I looked out the windows that stretched from floor to ceiling to see a real city, with traffic & pedestrians moving about (a long loop of a video captured). I had the same sensation of entering a hotel room, a sense of clean novelty. With real physical locomotion, and my eyes and ears covered by a headset and earbuds, I can help but wonder how much different this really is from working in isolation at a real apartment.
I went back later into the evening and decided to enter the same level of immersion, except this time on the couch watching something on the screen.
My body might be in Miami, but my awareness and surroundings existed on a new layer of reality.
Limitations
While this generates a high level of personal inquisition and awe, this example of immersion is fairly limited. Namely:
- My apartment in the real world is coincidentally positioned almost identically to the one in the game, making physical movements/furniture location a nice coincidence. This isn’t true for every situation (but there are people who have used Unity to re-create their living quarters in VR to solve this issue)
- The application I was utilizing was completely isolated and I couldn’t interact with other humans
- The living quarters are able to be replicated, and have no value nor scarcity
Digital Real Estate
Its an intuitive concept to understand why you can get a mansion in remote Nebraska for the same price as a shack in Los Angeles — location desirability effecting supply and demand. While we have hypothetically unlimited units of digital environments, the idea on placing greater value on location isn’t something to diminish anytime soon — especially when those places contain other humans and services in close proximity (relative to each respective metaverse)
Working full time in crypto, I’ve seen digital assets first-hand garner immense amounts of value. While this has historically been for fungible assets like BTC, ETH & plentiful ERC20 tokens, the secret is out now that unique digital assets have marketplace value. This has stretched from rare skins in video games selling for hundreds of thousands of dollars, and from the cheapest CryptoPunk NFT sitting well in six figures.
These art/skin/non-productive scarce digital items have paved the gateway for greater unique digital assets — like Axie Infinity’s Axies characters or more relatedly Somnium Space’s finite digital land slots.
Somnium Space
Somnium Space is an open-world VR game that is built atop Ethereum. Unlike the earlier mentioned virtual apartment with theoretically unlimited instances, SS is one vast world that encapsulates players into it. Users are able to buy plots of in-game land and build what they desire on it (including unique VR experiences), not unlike buying real land.
The market has shown that there’s interest for ownership of land in the Somnium universe. A small parcel of land (which is classified as an NFT) in the universe is currently setting the floor price at .38ETH (~$1,700) while some larger location-desirable land masses have sold for 30+ ETH (~$135K)
Somnium also has a fungible token (CUBE), and has methodical mechanics in place to make the world a more immersive place, such as a rating system for other inhabitants and tokenization of avatars.
The dynamics of Somnium Space are much more nuanced than this concise summary, but I hope to introduce some of the ideas of digital land scarcity here.
Check out this Tedtalk by the founder of Somnium space, where it’s being presented both in reality and Somnium
Which universe will people invest in?
As more applications create tracks to keep people in their metaverses and have them invest both their capital and time into them, the more valuable the equity of the game becomes (either governance tokens or in-game land/assets). This coincides at a time with people in the real world vacating away from the cities with the rise in remote work. With alternative living becoming cheaper and more immersive, and people opting to invest more finite time into a different reality, it is only a matter of time where people choose to invest into digital real estate in lieu of traditional land.
Location still matters when buying land. However, the question has evolved from “What city should I buy land in” to “What world should I buy land in”.
More writings to come on tangential topics and crypto-related work.
All platforms: @jpminetos
Crypto & Metaverse fund:
Hartmann Capital
Email: jp@hartmann-capital.com
Twitter: @hartmanncap
