In a Crypto Winter, Let’s Take Another Look at Digital Real Estate Comments Off on In a Crypto Winter, Let’s Take Another Look at Digital Real Estate 264

On April 30, Yuga Labs minted their widely anticipated “Otherdeeds,” NFTs that represent digital real estate in the company’s metaverse game called Otherside. 

The anticipated land grab was a hit. Traffic surged so much on the Ethereum blockchain during the 24-hour sale that it ultimately interrupted operations. Headlines highlighted unprecedented gas fees, which rise in conjunction with transaction volume. 

In spite of the technical problems and steep transaction costs, the mint was a success. Yuga Labs generated $561 million in Otherdeeds sales and around 5500 NFTs were minted. Priced at 305 APE each, the digital parcels cost the equivalent of about $5800 at the time of the sale. 

While Otherdeeds represent only one of a number of digital real estate opportunities in the metaverse, it’s a good proxy for other cryptocurrency-based digital land plays. 

So, as the value of crypto decreases or stagnates, is digital real estate still valuable? And what’s the future of real estate in the metaverse?

Defining terms (feel free to skip ahead if you’re web3 fluent)

To tackle this topic, we have to define a few terms. The metaverse is a hybrid universe posited to connect our digital and physical realities. While in the strictest sense, the metaverse is still years from being realized, it can be conceptualized in the context of online video games that are becoming more and more entangled with our physical realities – from Chipotle experiences in Roblox to digital Nike sales in Fortnight. 

Whether or not the metaverse comes to fruition as it has been proposed by tech behemoths like Meta (formerly Facebook) is still in question; however, it’s clear that there’s an appetite for unique experiences and merchandise in digital spaces and we’re all but certain to see rapid expansion and innovation to meet the demand. 

Enter digital real estate. Brands like Yuga Labs are minting their own metaverses and selling digital land within. On this digital land, users can build and customize digital spaces. In Yuga Labs’ case, it allows users to build and interact with space in the context of the Otherside game. 

Other web3 platforms, like MetaVRse, believe there’s a demand for digital land sales outside of the gaming community. The company is building a digital mall and selling space to retail tenants. 

What does this have to do with crypto?

Because digital land is not a physical asset, there’s an intuitive connection between this imagined property and cryptocurrency. In Yuga Labs’ case, the land is being sold, or minted, as NFTs which form the bridge between the metaverse and the crypto community. The NFTs are transparently recorded on their respective blockchains. 

The price of crypto

As cryptocurrency has experienced a rapid decline, it impacts the perceived value of the real estate since the holding is associated with the crypto (in Yuga’s case, APE). 

At the time of the Otherdeeds mint, Bitcoin was at $38,469, already a far cry from its all-time high of $68,000 at the end of the previous year. Fast-forward three months and it’s declined by almost another half since and has been sitting around $20k. ETH was worth $2726 at the time of the sale and has declined by more than 51%. 

APE was worth $24, compared to today’s $6.75, marking a staggering depreciation in the perceived value of Otherdeeds. 

So, what are these digital lands really worth?

A case for digital land sales

Brands are interested in the metaverse because of its marketing implications. Not only can brands have a presence in the context of these virtual spaces, but they can also gamify experiences with consumers, attract younger demographics, and amass unprecedented data. 

Moreover, the ability to customize spaces in online worlds is not a hard sell to gamers who are already familiar with the concept and will spend money on digital items like skins for their avatars in order to show personality and social proof. 

It’s likely that these digital parcel sales will continue, as a result of the experience potential for both brands and consumers. Moreover, some digital land owners believe they’ll be able to rent or sell their holdings to earn cash.

“There seems to be a growing number of projects ‘minting’ land,” says Sami Khan, the CEO and Co-Founder of ATLAS:EARTH, an app that allows people to buy and rent digital land representing real-world spaces. 

“Most investors are buying digital real estate purely based on speculation in hopes to flip the land. But our thought process is: how do we create an analog with the real world?”

Khan touts a slow and steady approach to investment in digital properties, with a horizon of eight to ten years. “Projects that focus on making virtual real estate competitive and stable relative to real world real estate opportunities will be the real winners, and the market for them is much larger,” he says.

According to Khan, the beauty of digital real estate is in the data and utility. “Virtual real estate projects will add value through tokens, traffic and eyeballs, and investors can make true ROI-based decisions on purchasing and assessing property values,” he says.

What about the tech?

Let’s back up to the blockchain technology that enables the NFT sales. We don’t have to look much farther than Yuga Labs’ example, which took down the Ethereum mainnet, to uncover some limits in the technology. 

“Quite simply, Ethereum Mainnet is not scalable as-is. This is not new news and it’s not something that can easily be stress-tested so [Yuga Labs’] only option was to pray that it didn’t implode,” says Beau Button, the President, CTO and Co-Founder of ATLAS:EARTH. “Clearly that wasn’t enough.”

Button is looking to alternative mainnets for his own technology, namely Avalanche, which he believes will overcome some of the early technical issues with NFT purchases.

“The tolerance for technical anomalies is much higher among the first generation web3 users, thankfully,” continues Button. 

So, is there a case for digital real estate? Absolutely. But if you get past the digital art sales and smoke and mirrors, the real utility of NFTs are still at the mercy of the technology that backs them – and the technology has a ways to go.

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Tina Mulqueen is the founder of The Block Talk and the CEO of Kindred PR. She consults with blockchain projects on marketing and public relations strategy, helping clients to secure more than $10M in funding. She is a 2x Top 100 Women in Media honoree and was named one of the top young communications professionals by INC Magazine. She's an advocate for women in technology, and often speaks about the intersection of technology, media & marketing. She writes regularly for Entrepreneur, and has written for Forbes, Huffington Post, Today, Thrive Global, Elite Daily, New York Lifestyles Magazine, and more.

Why Is Everyone Talking About NFTs? Comments Off on Why Is Everyone Talking About NFTs? 47

In this writer’s opinion the NFT hype is warranted — but not for the reason most people are investing. 

For those who’ve been in the space since Bitcoin’s early surge, you’ll remember the Initial Coin Offering (ICO) boom of 2017. The crowdfunding vehicle, which mirrored an IPO on the public market, brought with it massive amounts of investment into the blockchain space that seemed to mirror Bitcoin’s rapidly increasing value. 

In retrospect, none of it made sense. 

With all the hype, the investment in the space didn’t match due diligence. As of August 2018, investors had lost nearly $100M in ICO exit scams, a major reason we no longer hear about ICOs. 

From there, crowdfunding through token sales was rebranded alongside SEC regulation as Security Token Offerings (STOs). Additional fundraising iterations to enter the scene are Initial DEX Offerings (IDOs) and Initial Exchange Offerings (IEOs).

NFTs are having a similar moment to the immature and potentially reckless ICO market of 2017. The danger can be credited to a mix of hype and a widely unregulated environment with various points of entry and gatekeepers that are not incentivized to shore up fraud. 

As a result, many purchasers of NFTs are falling victim to a spectrum that spans undeserving projects on the mild end and outright scams at the extreme. Meanwhile, hackers are exploiting the unregulated environment. 

Just yesterday, $3 million in NFTs were stolen via an Instagram phishing scam. 

This writer, however, is still bullish on NFTs — just not the ones that are getting all the attention.

NFTs represent a concrete entry-point into the blockchain with a tangible utility and infinite disruptive implications. 

Here are a few.

Digital Assets as Social Proof 

As a Millennial, I personally have a hard time understanding the notion of owning and assigning value to a digital asset, but my kids don’t. 

I’ve written about how Gen Z has already adopted the concept of social proof in digital environments by assigning socially relevant value to digital assets like video game skins. 

As Gen Z ages and becomes an increasingly powerful consumer population, this experience will matter. Whether or not their purchase behavior translates to adulthood remains to be seen, but our kids are already leveraging digital assets in the metaverse to exhibit their position in the social hierarchy in the same way that my generation assigned value to Jansport-brand backpacks. 

Their concept of digital assets will be fundamentally different from ours, and NFTs are likely to benefit. 

But Why Are NFTs Relevant to Me Now?

Social proof is far from the most interesting use case for NFTs. 

In the near-term, NFTs can be utilized to store sale information of physical goods on the blockchain in order to eliminate nefarious actors in fraud-riddled industries like fine wine and art. 

Moreover, NFTs can disrupt any industry with a substantial secondary market. By coding royalties into the smart contract of NFTs, original sellers of wine, art and other trade-susceptible brands and industries can ensure they’ll capture a fee anytime an item is transferred. 

This solves a major problem for creators like photographers, artists and musicians that are notoriously underpaid in comparison to the value they create for brokers. It also has the potential to cut out middlemen like auction houses, record labels, and galleries to democratize the creator economy. 

Other Innovators Have Introduced Creative Use Cases for NFTs

Gary Vaynerchuk utilizes NFTs as tickets for events and other value-adds to his community. Forbes introduced a series of NFT Billionaires that will update alongside the real-time NYSE to gamify their user’s NFT experience in a way that’s brand-relevant. Foxies.art is using a gamified version of NFTs to fundraise blockchain education for women. 

The utility of NFTs is confined only by the imagination of our innovators. Whether or not NFT headlines today will remain relevant is yet to be seen, but one thing is certain: the disruption is only beginning. 

Foxies NFT Series Launches to Bring Blockchain Education to Women Comments Off on Foxies NFT Series Launches to Bring Blockchain Education to Women 354

Founded by serial tech entrepreneur and blockchain consultant Adryenn Ashley, Foxies.art launched last month with a lofty goal: to educate one million women and girls on blockchain technology. 

It’s an important mission – women need to be involved in new technologies to bridge the gender wealth gap. According to NextAdvisor, compared to men, around half as many women are investing in crypto and even fewer — a meager 4-6% — are occupying jobs in the space. 

“The early days of an industry are often when the fortunes are made — and those big winners typically influence the direction the industry goes in the future, from whom to invest in to what to build next,” says NextAdvisor writer Alex Gailey. “So now is the time for women to make their mark on the crypto industry and its future, and their absence now could diminish their influence — and benefits — in the long run, experts say.” 

The project, which features original artworks by Amanda Beaton ,resembles a new-age Pokemon game. For .1 ETH each, people can purchase and collect Foxies with different levels of rarity. Down the road, Ashley plans to launch a Foxies “breeding” program for holders of two or more Foxies to mint new original NFTs. Each newly bred Foxie will kick off a scholarship for a deserving recipient. 

“Showing women that they can bring their passions to new technologies and create space and wealth for themselves in emerging areas has been the journey of my career,” says Ashley. “NFTs are a digestible entry-point into the blockchain and I’m excited to see the impact that we can have with this program.”

Foxies.art is fiscally sponsored by Ashley’s non-profit, the Digital Legacy Foundation.

To participate, visit Foxies.art.

(Disclosure: as the founder of The Block Talk, making the technology sector accessible for women and other marginalized groups is one of my goals. While I do not benefit financially from foxies.art, I have agreed to offer pro bono communications consulting and media partnership to help them realize their vision.)

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