Now with virtual land costs pumping it’s more important than ever to learn how to make money in the metaverse. The TL;DR of how to make money in the metaverse with your brand is to lease and sell NFTs. However, this goes much deeper as there are multiple virtual worlds across many different blockchains with lots of options.
First, it’s important for brands or individuals entering the metaverse to understand that both the web2 and web3 digital landscape operates based on attention. Many I’m sure have heard this before as this has been pioneered on social media web2 platforms like Facebook and Twitter. The brands that garnish the most attention online, win.
Second, virtual goods have value. Assuming someone who spends 8+ hours online each day will not pay the same amount for their avatar’s virtual shirt over the physical shirt they wear for a zoom call… is incorrect. Self-expression will always follow attention and where each individual spends their time. Now that we’ve established those who garnish the most attention online gain the most success and virtual goods have value, virtual land can begin to show its value.
What are virtual lands on a decentralized blockchain and why is it special?
Thousands of developers are building applications called DAPPs (decentralized applications) on top of open-source and decentralized protocols like Ethereum. This is a similar comparison to how developers built websites in the 1990s but instead of applications being controlled by one entity or individual it’s decentralized and open to everyone to contribute. Open source blockchain protocols like Ethereum were the birthplace of non-fungible tokens (NFT). So when brands or individuals are referring to virtual land on the blockchain they are referring to an NFT. Each decentralized virtual world project like The Sandbox, Decentraland, NFTworlds, Somnimum Space, CryptoVoxels, Portals, or any other is referring to virtual land built on top of the blockchain. These lands leverage NFTs on-chain to enable users to buy, sell, trade, rent, fractionalize, stake, and more which has not been possible before.
Why is this a big deal and haven’t virtual worlds been around for 20+ years?
Up until now, when you entered an open virtual experience with other humans like Fortnite, Minecraft, or Roblox, all the virtual goods you collect, buy, or created are non-liquid or transferrable assets owned by the game makers like Epic Games or Microsoft. This was the web2 way and now with blockchains and NFTs the users are able to buy, sell, transfer, and truly own what they create within a virtual experience. It’s a paradigm shift in ownership of virtual goods and services enabled by NFTs. Another misconception is that the metaverse is just for gaming whereas it’s already become a way for humans to connect globally in a virtual environment.
Here is a list of the 5 basic ways people are thinking about their virtual land monetization strategies;
1. Sell access NFTs to exclusive events. Once you have your land and build something on it to share directly with customers or fans you can begin to host events and garnish attention for your virtual experience. For access to these events, you can sell NFTs in any form that customers have to purchase upfront and anytime they resell you make a royalty. This took shape in 2020 and 2021 in a massive shift with what NFT traders in the space (aka degens) call profile picture (aka PFP) projects. These have normally been 10,000 static images that are generated automagically with hundreds of unique attributes. Customers purchased based on rarities of attributes and speculation on a future promise of access or utility of some kind. The most popular example of early access NFTs was the Bored Ape Yacht Club which promised access to their club and now has become a full virtual experience metaverse. Many other communities experimented with the early use of social token software that allowed users to verify they owned one of the 10k NFTs in order to join certain channels on their Discord. A powerful community that did this successfully was our partner CyberKongz which gave NFT holders access to exclusive drops and trading conversations on a Discord channel.
Access is still in the early stages but there have been a handful of builders focused on opening the door for virtual services like meetings with co-workers, hotels, restaurants, healthcare providers, concerts, movies, real estate agents, hiring, banking, and many others. Holding an NFT in your wallet to get you into a virtual experience will become a new norm over the next 10 years.
2. Lease your entire land plot for experiences This one is what gets traditional real estate investors really excited about virtual worlds. With over 19,000 landowners in The Sandbox currently and 2.1 million users as of March 2022, you can see the supply vs demand already taking shape. In the coming months and years, there will be brands wanting to enter the metaverse to host an event and a 6-month lease will often be the best approach. This happens millions of times a year in the physical world which will directly translate to the virtual world. The big difference here is 100% of the transactions are done with smart contracts and automatically. No more faxing. No more paper. No more human “hiccups” in the middle of a lease transaction. These leases are programmed on the blockchain and happen automatically.
NFT lending and borrowing are being pioneered by ReNFT and NFTFI with many more in the works
3. Lease your land to NFT vendors. If you have garnished enough attention in the metaverse through events or a game you’ve built on land you can begin to lease sections within your land enabling vendors to sell their own NFTs. This is part of how SandStorm become a business. We’ve described this to brands in the past like a carnival. If you have an event where attendees are eager to learn like SandStormers every week inside the SandStorm Social Hub, there is immense value for vendors to market and sell NFTs to those attendees. This lease can be done via a smart contract where you lease part of your land for 6 months or 12 months sold as an NFT. As your land continues to grow in popularity, real estate on that land as an NFTs for vendors increases in value and can be resold to others. When your 12-month “lease NFT” expires you could allow the previous vendor to resell to someone else generating you royalties or you could burn the NFT. Many ways to do it but overall leasing land on the times square of Sandbox has been extremely attractive to brands who partner with us.
If you want to see how this works with our featured social hub in the sandbox, check out our live stream with the best brands entering the metaverse every week directly on our platform.
4. Build retail experiences on your land. Fashion and shopping in the metaverse are going to be a multi-trillion-dollar industry over the next 20 years. Fashion brands can build an experience for users to shop and purchase wearable NFTs, art, and much more on their land. Every time that buyer of your wearable resells the NFT to other fashion-forward users royalties are paid out to whoever created the original NFT instantly, making this extremely disruptive. For any artists or fashion designers, an important note is that the royalties are not paid annually or quarterly… they’re paid instantly via the smart contracts. Instant is the future.
Shopping in the metaverse with delivery in the physical world is being built quickly by the giants. The Walmarts of the world are already building virtual stores to help people buy from home in a virtual environment to have items delivered to their door. Will those items be NFTs on the virtual shelves? We don’t know yet.
5. Earn tokens with your land. There are multiple ways to do this and the first is to stake the utility or governance token the virtual world provides for rewards. When you stake or provide liquidity for tokens like SAND or MANA you’re able to yield rewards. With Sandbox’s token SAND, if you own land you’re able to earn 1.1X multiple on your staking rewards. In other words, by holding onto your land and their token SAND you make more SAND tokens. Learn how to stake here!
The other route for earning tokens with your land is the highly anticipated PLAY TO EARN or ATTEND TO EARN concepts coming to the metaverse. This sounds simple but on top of creating a game users want to play, it’s extremely complex technically. Users are able to earn native virtual world tokens by completing missions or attending events currently. Currently, you’re only able to earn the native tokens within virtual worlds for doing various tasks or missions but the future will enable brands to release their own tokens for their customers to earn. This has been referred to as social tokens in the past but we haven’t even scratched the tip of the iceberg with branded reward tokens provided to customers inside virtual experiences. We use POAPs to reward users giving them access to future votes, raffles, and giveaways when they attend our daily streams, which viewers love! However, this is different than the PLAY TO EARN concepts lots of web3 brands are trying to implement.
Overall it’s still extremely early and most brands are building on their land without monetization in mind immediately. These are the brands that consistently win as they know attention and community are king for web3. To build something that provides your customers and community with a place to experience together is the foundation for everything we’ve discussed. All 5 of these avenues can sprout 10 other ways to make money with your land but its good to start with the basics.
If you are trying to figure out how to monetize your virtual land we can help as these are NOT all the ways to make money with your metaverse land. Reach out to our team directly here