How to Make Money in the Metaverse

Future tech enthusiasts can invest in the next digital frontier by investing in metaverse real estate and stocks.

Writer Neal Stephenson published his third novel, “Snow Crash,” in 1992. Stephenson’s characters interact in a digital environment where appearances can be changed at a moment’s notice and digital real estate is just as valuable as its physical counterpart. This digital environment is called the Metaverse.

Public companies like Meta (formerly Facebook) and decentralized autonomous organizations like the Decentraland Foundation are working to make the metaverse a profitable reality 28 years later. New revenue opportunities have opened up for retail investors, gamers, digital collectors, and developers.

Metaverses are still in their infancy, and their value proposition has not yet been established. It is highly speculative and risky to invest in the metaverse.

Metaverse stocks #

Investing in publicly traded companies whose business models or profitability are linked to the metaverse is the least volatile way to gain exposure to the metaverse. Here’s a list of publicly traded companies that might be of interest to you:

• Meta Platforms Inc (NASDAQ: FB) – In October, Mark Zuckerberg announced the company formerly known as Facebook Inc. would undergo a major rebranding and become Meta Platforms Inc. Meta released its virtual reality metaverse platform, Horizon Worlds, since the announcement. Among the hottest gifts over the holidays was Meta’s Oculus Quest 2 VR headset. The impact of headset sales on Horizon Worlds users remains to be seen, however.
• Roblox (NYSE: RBLX) – Roblox is an online metaverse platform that allows gamers to create and share virtual worlds with other Roblox users. Roblox has grown rapidly since its inception in 2006, with 9.5 million independent developers, 24 million unique digital experiences and 49.4 million daily active users – up 35% year over year. Still, despite those numbers, the company has yet to turn a profit.
• Boeing (NYSE: BA) – Boeing is utilizing the metaverse to extend and improve its production capabilities. Reuters reported that Boeing chief engineer Greg Hyslop said the company was planning to create a proprietary digital environment in which human, computer, and robot employees can communicate and collaborate seamlessly across the globe.
• Microsoft (NASDAQ: MSFT) – Microsoft is looking to find its metaverse niche in the professional world. Earlier this week, it was announced that Microsoft just purchased Activision Blizzard for nearly 70 Billion Dollars as their Massive Metaverse Move! The company plans to release Mesh for Microsoft Teams in 2022. 

With the add-on to the popular video conferencing platform, individuals can make their own avatars and collaborate in a holographic 3D environment that transcends geographic boundaries. Holoportation, a tool that lets users access the previous digital environment with a VR headset, will be a key feature of Microsoft Mesh. A lifelike digital representation of the user appears with the ability to interact with team members as if they were in person.

Metaverse real estate #

The metaverse is still in its infancy, but platforms such as The Sandbox and Decentraland are already selling digital real estate in the form of non-fungible tokens (NFTs), which are digital tokens on blockchain networks that can represent a wide range of unique items. In the metaverse platform, the blockchain network powers the sale and transfer of ownership of real estate.

NFT owners can rent, sell, or build on their virtual properties once the virtual real estate is purchased. Its very own crypto casino has been built by the Japanese video game maker Atari after purchasing 20 parcels in Decentraland. Atari’s native ERC20-based Atari token allows gamblers to place bets and receive winnings tax-free in crypto. The company has also announced plans to launch its own virtual hotel complex in 2022.

How to buy land in the metaverse and other digital items #

Metaverse platforms have developed marketplaces where users can buy and sell digital land and other collectibles in the form of NFTs. This is how you do it:

1. If a user wishes to purchase digital real estate, he needs to decide on which platform he wishes to do so. Decentraland and The Sandbox are popular options, although there are several others. Make sure you do your research before purchasing any land in the metaverse.
2. In order to use the metaverse platform, the user must create a digital cryptocurrency wallet, a type of computer software that connects to a blockchain network and stores cryptocurrency.
3. A purchaser must then connect his digital wallet to the marketplace of his chosen metaverse platform. Platform websites typically offer marketplaces.
4. It looks a lot like buying physical real estate at this stage to purchase digital real estate. The price, location, and future value of the digital land a buyer is considering must be taken into account.
5. After identifying a piece of land, the buyer needs to acquire tokens or coins to purchase it with and store them in his digital wallet. Each metaverse platform uses a different type of token or coin to execute a transaction. In Decentraland, for example, the user would need to purchase MANA tokens in order to purchase digital land. In order to buy land in The Sandbox, he would need to acquire SAND tokens.
6. The buyer can buy land outright or place a bid on the land if he has already connected his digital wallet to the metaverse marketplace and funded it. A NFT representing the land will be transferred to the user’s wallet and the cost of the land will be removed from the digital wallet.
7. In the same way, you can buy other metaverse NFT items, such as clothing and accessories.

Metaverse cryptocurrency tokens #

The Metaverse is powered by fungible tokens (tokens that are divisible and exchangeable) on blockchain networks. Digital assets, such as virtual land and avatar outfits, can be acquired using these tokens. Crypto or fiat currencies can also be exchanged for them. The owners of certain metaverse cryptocurrencies can also vote on decisions within a metaverse platform, such as where money should be invested or which new features to release first.

Ideally, as the value of digital assets rises, so will the value of their associated tokens. Some metaverse platforms, such as Decentraland, burn all MANA tokens used to purchase digital assets, removing them permanently from circulation and increasing the value of the remaining tokens.

The metaverse tokens listed below are sorted by market capitalization (market cap) in descending order. The options are inherently risky and should be viewed as speculative investments. Generally speaking, you should never invest more than you are willing to lose.

1. Decentraland (MANA) – Decentraland’s MANA token powers the Decentraland metaverse and is used as a medium of exchange for the platform’s marketplace, with a market cap of about $6 billion+ at time of writing.
2. Axie Infinity (AXS) – Unlike Decentraland’s MANA, which is used to purchase digital goods and services, Axie Infinity’s AXS token is a governance token. Those who own AXS will be able to vote on proposed decisions that will affect the Axie Infinity ecosystem, including how funds in the community treasury are spent. The AXS token will be modified in the future so that it can be used to purchase digital goods and services on Axie Infinity.
3. The Sandbox (SAND) – The Sandbox is focused on a metaverse of user-generated content, much like Roblox. SAND tokens are awarded to individuals who participate in The Sandbox’s alpha user testing. You can also buy SAND tokens on digital exchanges. The SAND token has utility, governance, and staking functions. SAND holders can use it to buy digital goods and services, vote on proposed initiatives within the Sandbox and stake it for further rewards.
4. Enjin Coin (ENJ) – Enjin is a blockchain gaming company. Enjin delivers a wide range of play-to-earn gaming experiences, as opposed to The Sandbox and Axie Infinity, which offer only a single metaverse product. In order to provide real-world value for digital assets, Enjin’s native token, ENJ, is “infused” into every NFT minted within its ecosystem, making it unique.

The future of the metaverse? #

Millions of dollars are being spent by companies investing heavily in the metaverse to convince consumers that the dawn of the metaverse has arrived. Can it usher in a new era of mass adoption and barrier-free digital interaction, or will it remain a niche product, reserved for gamers and tech enthusiasts? That remains to be seen. For now, retail investors interested in the metaverse should explore these platforms and weigh its future value for themselves.

References:

Johnson, E. M., & Hepher, T. (2021, December 17). Boeing wants to build its next airplane in the “metaverse.” Reuters. https://www.reuters.com/technology/boeing-wants-build-its-next-airplane-metaverse-2021-12-17/

Microsoft’s massive metaverse move: Buying Activision for $69B (cointelegraph.com)