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What Is Decentraland? How Virtual Real Estate Works, Pricing, and More

Virginia Valenzuela, a writer at NFT.com.

Virginia Valenzuela

Apr 26th, 2023

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3 min read

A digital hill of red grass, with an astronaut suit stuck in a black cloud, and the sky in the background. Source: Sharan Pagadala / Unsplash
Virtual real estate is a relatively new concept, but it's already gained increasing attention from investors. As the world becomes more digitized and virtually interconnected, investing in virtual real estate has become a viable option for those looking to diversify their portfolios.
There are several benefits to investing in virtual real estate, like the potential for high returns on investment, the ability to trade and sell virtual assets easily, and the flexibility to operate in a completely online environment. But there are also some drawbacks, including price volatility and limited market data. With the rise of virtual reality and the increasing demand for online experiences, investing in virtual real estate is proving to be a breakout asset class in 2023.
Buying land in the metaverse offers tremendous potential for developers who are looking to innovate within the dynamic VR landscape, enabling them to do everything from hosting events, gaming, linking out to websites, and more. From secure transactions with tokenized assets to transparent governance with an easy-to-use environment flowing across both desktop computers and mobile devices alike, Decentraland is ushering in a new era of digital property ownership, making it easier for everyone to invest in this evolving space.

What is virtual real estate?

Virtual real estate is the concept of buying and selling digital property in a virtual world, usually referred to as the metaverse. It's similar to the popular game Runescape where players can buy or sell items, including land segments. Examples of some of the best-known metaverses with virtual real estate are SuperWorld, Voxels, and Decentraland. These metaverses allow players to buy and sell virtual land, create digital shops, or even host virtual events all within their respective worlds.

The benefits of investing in virtual real estate

Virtual real estate is a rapidly emerging investment frontier. Unlike traditional real estate, investing in virtual real estate allows individuals to own a piece of the internet, which is predicted to be the future of business and commerce. The benefits of investing in virtual real estate are immense, from lower barriers to entry and high liquidity to the potential for limitless growth and revenue.
As the world becomes increasingly interconnected and reliant on digital technologies, it's easy to see how owning virtual real estate can be a smart and lucrative investment decision.

What is Decentraland and what can it do?

Decentraland is a blockchain-based virtual reality platform that is turning heads and captivating imaginations. It's owned and operated by users, who use it to create immersive experiences, express their creativity, and even monetize their creations. Whether you're into gaming, art, or exploring new worlds, Decentraland offers a unique and exciting way to engage with others and explore your passions.
Users can buy, sell, and develop pieces of land using the platform’s native token MANA. Each parcel of land is represented as an NFT, which provides the asset with verified authenticity and provenance.

What can I do on Decentraland?

Decentraland's open-world format enables users to attend live shows and auctions and design and build their own digital creations. The decentralized nature of the platform supports complete user autonomy, providing an experience unlike any other in the digital realm. From creating your own virtual art gallery to attending one of the many virtual festivals, there's no shortage of activities to engage in on Decentraland.

How to Buy Your First Plot of Land in Decentraland

Buying your first plot of land in Decentraland can seem daunting, since its endless possibilities of virtual real estate make it hard to know where to start. However, with a little bit of knowledge and research, you can become a proud landowner in this fast-growing virtual world.
Start by setting a budget and understanding the current market trends. Consider factors like location, size, and potential future developments. Don't be afraid to ask questions and engage with other community members to gather more information.
Once you've narrowed down your options, make sure to double-check the ownership rights and transaction processes before making a final decision. With careful planning and a bit of luck, you can be on your way to building your own virtual paradise in no time.
Users can buy parcels of land, denoted as LAND, by purchasing the native token MANA. MANA is valued at $0.57 as of writing. Parcels of LAND can be found on Decentraland’s marketplace and filtered based on location, size, and price. As of today, parcels of land begin at 1,999 MANA, or roughly $1,138.12.
As of writing, Decentraland’s market cap is $1.1 billion.

Potential drawbacks of investing in virtual real estate

Crypto remains comparably volatile in nature and should be seen as a high-risk / high-reward asset class. Virtual real estate is still a new and developing sector of the crypto ecosystem. Even if you conduct extensive research, there is still not a long enough history of the technology or the market to build a path to success with absolute certainty.
As with any other crypto investment, don’t put money in that you can’t afford to lose.
Make sure you understand the market trends and the potential growth of your investment. Additionally, consider leveraging social media and online marketing to promote your virtual property and increase its visibility. Finally, don't be afraid to diversify your investments and explore different platforms and mediums. With a little bit of savvy and a willingness to take risks, virtual real estate can be a lucrative and exciting investment opportunity.

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