Scarcity of Land in the Metaverse Might Drive Big Tech Away from It
There’s a land rush happening in the Metaverse which might actually surprise you!
Will land ever be scarce in the metaverse? Not only is this a valid question, but it’s also an important question on the hot topics that have been swirling on CryptoTwitter for the past few days. Yuga Labs, the creator of the Bored Ape Yacht Club, completed sales of the virtual lot “Other deeds” in the proposed “Other side” metaverse project this week, raising the company to US$285 million. The reservation price of the Otherdeed NFT has dropped by 12% since its sale. This metaverse land scarcity feels like a top signal in areas where similar “good” coins are skyrocketing rapidly after their launch.
Why is the Metaverse real estate so valuable, anyway?
Of course, the metaverse faces the problem of impersonator proliferation. Currently, there are dozens of metaverse projects, all of which have “land” to sell. However, the issues raised are far more fundamental and may indicate a flaw in the model, regardless of the competitive environment. Above all, the notion of increasing the value of geospatial space in the virtual world, just as the value of land in the real world, seems to miss some really fundamental differences. Basically, the value of real land is based on location and utility. The actual land is worth it depending on the time it takes to get to the other places you want to visit. Therefore, the land in Tokyo and New York is the most valuable in the world. This geographical reality is inseparable from the lack of land in the real world. Each land has a completely unique geographic location compared to all other lands. Therefore, the problem for metaverse real estate buyers is very simple. In the world of 3D digital, every distance is fake.
There is no inherent reason that some virtual lands should be more valuable for their location. More than that a web address is worth it because it is “close” to another. In a virtual world, you can instantly and easily teleport your avatar to wherever you want. As another Twitter user pointed out, this completely imposes artificial restrictions on the user to back up the value of the metaverse land, reducing the experience, and ultimately the true value of the metaverse. It means that you need to keep away from the user who is the source.
Next is the value of real-world land. In the real world, the land value includes several factors including whether there are suitable soils and water sources for agriculture and other natural resources. But, again, because there are no “natural resources” in the metaverse, tracing a virtual land to an actual value structure means giving it a specific right. In a thread criticizing the land sales model, the most obvious move here is to link content creation rights to land ownership.
However, implementing this fix to enhance land statistics has the opposite effect of degrading the user experience and discouraging creators who make the shared world attractive and valuable. Check out Minecraft, Roblox, and even YouTube. Would these platforms be better if the right to create these platforms was restricted to a small number of landowners? At the very least, this suggests an attractive option for investors looking to spread across different funding models.
Financial Skeuomorph Trap
Given this criticism, the entire idea of investing in the metaverse real estate can be labeled as a form of “financial skeuomorphism.” Skeuomorphism refers to the tendency to design digital products to mimic the physical world and was a particularly hot topic in the early developing interface design of the iPhone. Over time, the visual skeuomorphism of interface design has diminished as people become accustomed to the difference between digital and physical objects. The same can happen very often in the metaverse, with the twist that people have invested almost US$285 million in money equivalent to the Drop shadow app icon rather than in Yuga Labs stock.
And while Apple has gradually moved away from skeuomorphism, the metaverse project that led to the valuation of their assets may have swallowed a poison that can only be pierced straight in front of investors. To increase the value of the land, developers may need to impose artificial restrictions that undermine the user experience and, ultimately, the system’s true value. Conversely, facilitating the movement of the metaverse and the creation of content almost essentially adversely affects ground statistics. So far, the founders may have moved too fast to fully understand the meaning of the basic model. But a less generous interpretation is the buyer’s skeuomorph, using the “Land in Metaverse” metaphor in a way that implicitly exaggerates the inherent value of the virtual objects they sell, down to the laughter of banks. It uses the bias of skeuomorphism.