Introduction
A new paradigm is upon us: The Metaverse Gold Rush has started.
JP Morgan is projecting the metaverse industry to generate $1 trillion in annual revenue by 2027. Billion dollar brands are beginning to enter the metaverse space: Nike, McDonalds, Disney, Facebook (now Meta), Walmart. Sensing opportunity, established organizations are starting to take notice and venture out into the metaverse.
Solana Ventures and Lightspeed Ventures launched a 100m GameFi Fund in November 2021. Binance Smart Chain launched a 200m GameFi fund a month later. JEWEL had an incredible run spearheaded by many of your favorite Crypto Twitter accounts, and is currently working on its expansion to Avalanche. Average land value for Decentraland and Sandbox is up over 500% in the last year. MANA and SAND are both sitting above 3B market cap, despite being over 50% down from their all time highs late last year.
Enter DOKO.
Why was DOKO founded?
DOKO believes that the metaverse will reshape the human experience. Humans will be onboarded into immersive digital worlds at an unprecedented rate. Average time spent in the metaverse will ramp up slowly, but grow exponentially. The metaverse has yet to make the jump over “the chasm” of the tech adoption curve, but will inevitably do so in the future.
Currently, the metaverse real estate market is booming — land parcels across major metaverse have been surging in prices. This has been good for the development of the metaverse in the short term, garnering lots of hype and attention.
However, DOKO believes that this type of growth is not sustainable in the long term. Landowners cannot generate cash flow the way a real life rental property would. This leads to significant amounts of capital locked up in assets. Metaverse speculators have steadily driven up price floors to land in popular metaverse worlds, raising the barrier to entry for builders. This lack of builders leads to a stagnant economy, and stagnant economies are marked for death.
Case Study: EVE Online
The idea of digital real estate speculators slowing down economies is not a brand new phenomenon — it happened around 20 years ago in EVE Online, a space-based MMORPG with a heavily player-based economy.
In EVE’s economy, factories are how digital goods such as spaceships used for transportation, trade, and war are produced. Consequently, factories naturally play a critical role in EVE’s economy. As a result, when the game first launched players quickly snapped up all the best factories, recognizing that these factories were very valuable assets.
Unfortunately, many of these players then proceeded to do nothing with the factories they had bought, having no incentive to actually use the factories they had bought. This led to increased consumer goods prices (due to idle factories) and severe real estate inflation (speculators weren’t selling).
Now you might ask: why did the game allow speculators to do this? The answer: rent on factories was very low, relative to the price of these factories. Factory holders could easily afford to let their factories sit idle. EVE subsequently fixed this by raising rent on factories so that only players actually using their factories could justify paying the increased rent. As a result, speculators were driven out of the EVE factory real estate market, previously idle factories became productive, and EVE’s economy was fixed.
How can this be solved?
DOKO believes the solution to the stagnant metaverse economy is to induce liquidity for illiquid metaverse assets.
Because so much of the metaverse is tied up into economically unproductive illiquid NFTs, these digital properties are sucking up all the free capital and bringing the overall metaverse economy to a grinding halt. The majority of capital invested into the metaverse isn’t currently pushing the metaverse forward. The majority of assets in the metaverse aren’t being utilized to their full potential. This is obviously a problem that needs to be addressed.
A real world analogy would be investors buying a land rich in precious metals, refusing to build any of the infrastructure required to actually mine these metals, and then hoping that someone buys the unextracted value at a higher price than you paid for it.
While it is not inherently wrong to be a speculator, speculators do not push the space forward. In order for the metaverse to advance, assets within in must be leveraged to their full potential. Incentives must be created and infrastructure must be built to turn idle assets into productive ones.
What is DOKO building to solve this?
DOKO is currently building a suite of DeFi products for digital real estate aimed at increasing the productivity and liquidity of assets in the metaverse.
The first DOKO product is leasing. DOKO will allow landowners to lease out land using smart contracts in a non-custodial manner to generate cash flow. Turning unproductive metaverse real estate into revenue-generating assets would help free up liquidity and grow the space.
Additionally, DOKO is working on collateralized lending. In the future, DOKO users will be able to improve asset efficiency by taking out loans against their metaverse real estate and their leases.
Lastly, users can easily manage their metaverse real estate portfolios with DOKO’s asset management dashboard, deploying assets to the DOKO DeFi product suite with a few simple clicks.
With these products, DOKO will awaken the sleeping giant that is the metaverse economy.
About DOKO
DOKO aims to ignite the economic engine in metaverse by providing DeFi products tailored for metaverse real estate — an all-in-one platform that provides non-custodial real estate leasing, collateralized loans and a community-owned real estate treasuryDAO.
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