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Real Estate Loans for the Metaverse

A Market overview on the need for lending solutions for virtual land as collateral

TLDR:

  • Metaverse real estate is seeing a new surge in acceptance and value.
  • Recent purchases in the metaverse has opened up new money markets for the virtual real estate
  • Loans against Metaverse assets such as virtual real estates are now making inroads
  • Willing lenders & liquidity providers in the decentralized world will open up the metaverse to more people
  • With over 80% of the metaverse users being youth below 30 years of age, raises the potential of growth of financing assets
  • Web 3.0 technologies & decentralized structure protects everyone’s interests unlike in the physical world

Metaverse — The Hot property destination

The Metaverse is currently the hottest attraction for investors looking to purchase real estate. Among the current existing metaverses we have the Sandbox (SAND), Axie Infinity (AXS) and Decentraland (MANA) that stand out in terms of attracting investors. With all the traction gained through the involvement of fashion and technology brands in the metaverse the demand for real estate is at an all time high.

The price tags

Owning real estate has always been an important aspect for any individual in the real world. The adoption of the metaverse has only allowed the real estate inside the metaverse to increase in value. Based on the location of land in the metaverse, some plots can range from a few hundred dollars to north of $4 Million USD. The most expensive purchase comes from the SANDBOX metaverse. The increasing adoption will only incentivize the value of real estate which has seen an upward trend in the last few months.

To understand a little more about the recent real estate transactions that have taken place inside major Metaverse platforms, we have tabulated the major statistics of 4 major players.

Over $4 Million worth of virtual real estate has been purchase on these metaverses | Source. Nonfungible.com
More and more people are taking interest in virtual real estate | Source. Nonfungible.com
Users are willing to spend large sums of money for the plot of land | Source. Nonfungible.com
Data Table | Source. Nonfungible.com

A view from the eyes of a new investor

The absurd prices running through the roof have been headlining tech forums as well as news channels within the metaverse community. Prices like this are sure to get any commoner to think twice before actually considering buying real estate in the metaverse. Once again, not all plots are as expensive and can even start from a few hundred dollars. However, just like the real world, everyone wants to be part of the best locations in famous metaverses like the Sandbox and Decentraland.

Lending & Mortgage

So what does one do in such a case where they might not be able to afford an expensive plot at the moment? This opens up a whole new world of opportunities to allow people to be able to purchase their favourite plots of land through lending or having a collateral loan set up against their assets. Despite the value skyrocketing in recent times, people might wince about putting down $20,000 USD on a piece of real-estate.

However, having a mortgage held up against an NFT for $20,000 owned by an individual investor might be easier. This can be taken forward by even having a mortgage taken out on an individual’s cryptocurrency coins or even metaverse holdings. In this way any investor will be able to explore and purchase plots of land at an opportune time before the prices skyrocket again. Mortgages serve as a much more comfortable option for new investors to explore the metaverse thus in turn increasing the adoption curve.

Physical & Virtual Land are not too different

Lending opportunities must be viewed by people with a parallel drawn to land owned by people in real life. A city like New York has its real estate market built on the very foundation of taking out a loan or mortgaging an asset. Yet, it still manages to generate traction and income to thousands of people on a daily basis. In the same way, despite people in the metaverse having to pay a monthly amount for their real estate they are building a stronger and more populated community. The metaverse is far from being only a gaming phenomenon but has the potential to provide new experiences to people and generate jobs and income for the next generations.

Also look at the aspect of finite-ness. Property in Metaverses is finite, which seems to attract investors & developers alike. However, having said that, there is no limit to the number of metaverses that can be created. The manner in which the virtual land deed is represented — in the form of NFTs or crypto assets — can also be traded, sold, bought akin to the physical world.

A potential investment opportunity for the Gen-Z

The younger generation of people who might not be able to invest in physical land at the current time due to the exuberant prices and commitment might want to switch to purchasing virtual real-estate. This will not only allow them to buy equity into the metaverse but be part of land that has the potential to increase in value. Owning real estate always instils a sense of pride in a person. Being part of the metaverse allows people to invest and also own land in the ever-growing market.

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About EasyFi

EasyFi Network is a universal layer-2 multi-chain money market protocol for digital assets with focus on liquidity sourcing & capital efficiency for structured lending in a non-custodial manner. The Protocol is currently live on Polygon, Binance Smart Chain and Ethereum.

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EasyFi Network

EasyFi Network

EasyFi is a Layer 2 DeFi Lending Protocol for Digital Assets. Focused on plugging various gaps in DeFi adoption, powered by the efficient Layer 2 Blockchains