© Reuters. Avatar used by Anand Venkateswaran, also known as Twobadour, Metapurse fund manager
By Elizabeth Howcroft
LONDON (Reuters) – What would you do with a $ 69 million piece of art that doesn’t actually exist?
That’s the question that self-proclaimed Singapore-based investor Metakovan, who made headlines last month when he bought American artist Beeple’s digital artwork “Everydays: The First 5000 Days” at Christie’s.
Work is an irreplaceable token (NFT) – a new type of virtual asset with ownership status and authenticity verified by the blockchain. NFT exploded in popularity in 2021, with prices skyrocketing.
Metakovan, whose real name is Vignesh Sundaresan, plans to put the artwork on display in four virtual world environments. He is working with architects to design galleries that the public can access through a web browser or virtual reality technology.
But art is only part of the new economy of a blockchain-based virtual world, where land, buildings, avatars and even names can be bought and sold in NFT form, often raking in hundreds. thousand dollars. In these environments, known as metaverse, people can roam with friends, visit virtual buildings, and attend virtual events.
Metakovan’s plans are ambitious, but he says he is the largest NFT investor in the world. His collection of NFT and other crypto assets, the $ 189 million Metapurse fund, according to NonFungible.com, a website aggregating historical sales data from NFT markets.
Anand Venkateswaran, aka Twobadour, who runs the Metapurse fund with Metakovan, said: “The current boom in the Cambrian NFT that you see is all about acquisitions – people want to buy more NFTs, swallow. as much as possible”.
“But that’s just the tip of the iceberg. The real explosion happens when they can … experience these NFTs as they intended. If it’s a virtual piece of land, you should move in.” there, there’s an immersive experience in it. ”
Video game maker Atari told Reuters it plans to launch its own blockchain-based virtual world and will release details soon.
Frederic Chesnais, head of Atari’s blockchain division and former chief executive officer of the company, said the online environment will be “huge”, regardless of the volatility of bitcoin’s price. He added, NFT real estate could one day reap in the millions of dollars.
However, investors warn that while large cash flows are flowing into the NFT, the market could create price bubbles, with the risk of massive loss if the hype drops. There may also be key opportunities for scammers in a marketplace where many participants operate under pseudonyms.
(GRAPHICS – Soaring crypto assets – https://graphics.reuters.com/NFTS-WORLDS/dgkplywqmvb/chart.png)
A LOT OF VIRTUAL LANDS: $ 500K +
The insane NFT has raised interest in blockchain-based online environments. The best known are Decentraland, Cryptovoxels, Somnium Space and The Sandbox where virtual property prices are hitting new highs.
Decentraland has grossed over $ 50 million in revenue, including land, avatars, usernames, and wearable devices like virtual outfits. A virtual 41,216 square meter piece of land sold for $ 572,000 on April 11, which the platform sees as a record.
Another Decentraland lot sold for $ 283,567 on March 21, according to NonFungible.com, while Somnium Space said a property on its platform raised more than $ 500,000 on May 16. 3.
Metaverse enthusiasts compare the rush to buy virtual land with domain scrambling in the early days of the Internet. There are a few thousand unique land owners on each major blockchain-based platform.
Their theory is that when many people congregate in these environments, plots in central locations will be highly sought after because of the number of visitors.
“All of these virtual land and virtual spaces are real estate where the experience will begin to become central, from which attention will begin to focus,” Twobadour said.
“It’s a place that attracts all the attention and can make money in a million different ways.”
To date, there are relatively small numbers of people raising land prices in these worlds.
In Decentraland, there were 334 buyers in March, bringing monthly land sales in excess of $ 4 million, from $ 767,400 in February with 184 buyers and $ 246,134 in January with 111 buyers, according to NonFungible.com.
An NFT investor named Whale Shark, whose collection was valued at more than $ 20 million by NonFungible.com in February, said he spent 200 crypto Ether inland in Cryptovoxels and another 200. in The Sandbox in 2018 and 2019.
Those properties were priced around $ 60,000 per house at the time but are now worth more than $ 400,000 per block, he added, on the condition of anonymity.
Several virtual worlds have their own cryptocurrency: Decentraland’s MANA has soared by more than 3500% in the past year, according to Coinbase.
(Virtual real estate boom – https://graphics.reuters.com/NFTS-WORLDS/bdwpkbzzwvm/chart.png)
VIRAL FESTIVAL, WHO IS AVAILABLE?
Samuel Hamilton, head of community and events at the Decentraland Foundation, said some early virtual land investors who bought early are now selling to companies.
Atari, ahead of its own blockchain-based world open plan, has licensed a classic video game in Decentraland and is about to open a casino, while an area called the “Crypto Valley” is where There are many different crypto companies.
Decentraland hosted a virtual fashion show in collaboration with Adidas (OTC :), where the designs were auctioned off as NFT. It is also attracting interest from musicians who can perform in the space, sell tickets and merchandise in NFT format.
“We’re going to have a number of globally famous festivals, all of which are going in phases, and when we get there, we expect hundreds of thousands or even millions of people,” said Hamilton.
Last year, American rapper Travis Scott drew 27.7 million spectators to watch five concerts in Fortnite, the popular online game owned by Epic Games.
DOES ‘WINTER WINTER CRYPTO’ COME?
Sebastien Borget, co-founder of The Sandbox, describes commerce in the virtual world as a new country and says the NFT-based economy will grow faster than the real world within a decade.
However, there are many in the nascent industry who have warned of the dangers ahead for investors.
Ben Nolan, founder of the virtual world Cryptovoxels said: “I predict that there will be a crypto winter in the next few months, the whole NFT boom will explode and then all value will be completely. fall”.
“Doing NFT as an investment or as a way to make money is really wrong advice.”
However, he sees a future for virtual worlds and NFT.
“Do I think most people will be using the virtual world? Probably not, but I think a lot of people will and I think NFT is a big part of that development,” he said.
“Really taking a walk with someone else in a virtual space and seeing art together is a really good way to spend time,” he added.
Whale Shark said the majority of NFTs are not commercially viable and expect only a small number of winners to become winners.
But some investors like Australia-based Mateen Soudagar, aka DCL Blogger, are not keen on returning to real-world investment.
Soudagar said he made millions through cryptocurrencies and NFT, but instead of cashing out, he keeps about 75% of his money in crypto assets and claims many of his colleagues. He does the same. Aside from upgrading his laptop, he doesn’t change his lifestyle.
“If you are a follower of movement then you think the world is going to move into this space,” he said. “So when you put it in fiat, you’re going to go back.”