The housing market in the tangible world is crazy, but the metaverse is still the frontier with lots of room for all. In fact, virtual real estate is inherently infinite, notes Winston Robson, CEO at WeMeta, a virtual real estate valuation company.
How did you become involved in the Metaverse and virtual real estate?
I was looking to start a company, had just quit my job, and was doing different hackathons in the blockchain and Web3 space. I tried different ideas….I remember I tried mortgages on chain, I tried Airbnb on chain, I tried a few different things. Then I came across somebody at Web 3 weekend ETH Global last May who was talking about building something for the Metaverse. That was the first time I heard about it. That was the first time I hopped into Decentraland and then I got into Crypto Voxels. I was just fascinated by the idea that these things have different land, that it was actually worth something and that people would build on it. It reminded me of a lot of Roblox and other games I used to play where you own a property that people can visit, and from there we scaled. I was trying to start a business and I had a background in real estate, data science and there was this opportunity where nobody really understood what was going on and, you know, people were talking about it and really liked it. I came in and looked at the data, saw the value there and so that is how I became involved.
Why is virtual real estate valuation such a difficult concept for investors to gauge?
This concept is difficult for many people to wrap their heads around because the Metaverse is still a challenging concept. The mere fact that the property is virtual makes it harder to conceptualize and attach a value to it. But it’s important to remember that the valuation of these properties comes not from their physical properties but from the fact that people still visit these virtual properties. With the death of a lot of people’s 3rd places due to the pandemic, the Metaverse is stepping in to fill that void, and this inherently provides value.
What are some of the most important differences between virtual and traditional real estate? How do these differences affect their valuations?
The differences are still undefined; they can be as similar or as dissimilar as the user wants it to be. Your Facebook page is virtual real estate, what’s its valuation? Quite high, actually. One of the things virtual real estate lacks is privacy. It’s almost impossible to be alone in the virtual world. Even your own phone is tracked, so there isn’t really the possibility of privacy.
The question is, what are you satisfying with virtual real estate? You can visit your virtual real estate from any physical location, which is another differentiating factory. In summation, their valuation becomes what is important to the consumer. The overarching factor though is the ability to generate revenue. Physical real estate is static but virtual real estate is inherently infinite, and thus has the potential for infinite possibility for growth, which is super exciting.
What are the important factors to consider with digital land? How does WeMeta use these factors to value properties?
Currently, digital land is evaluated in a largely location-based way. The constraints of building are really based on location the same way building physical real estate differs by location. However, there is more to the potential valuation besides location. In the near future, WeMeta plans to focus more on the amenities that these digital properties can provide, rather than just where the property is located in its respective metaverse. Over time we plan to flip the evaluation model on its head from being based on sales history of nearby properties to being based on similar experiences.
Where do you see the future of digital real estate?
You own what you own and it’s not part of a central collective. The problem right now is it’s all running on AWS but in the future it could be completely decentralized.I think the future of digital real estate is super exciting. I see it almost as a GTA or Roblox, or any game with a map that can be built upon and innovated. Unfortunately, there isn’t a techstack that we currently have that allows for this. Ethic with their Unreal engine is doing a pretty good job but it’s not a Web3 native so we’ll see how it works.
What advice would you offer to those who are interested in investing in the Metaverse but don’t know where to start?
I would first ask someone how they define investing in the metaverse, because to some extent buying stock in any company with virtual real estate could be considered investing in the metaverse. On the other hand building experiences in these decentralized spaces is a great way to start as well. Learning how to create Web3 native technology is the best way to prepare you for the future of the metaverse.