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September 16, 2022

How To Invest in the Metaverse: The Ultimate Guide

In the past couple of years, "metaverse" has taken on a more colloquial meaning as it relates to the intersections of virtual reality, cryptoassets, and blockchain. A far cry from a theoretical science-fiction term from the 90s, the metaverse as a concept is more real than ever. 

There's no doubt — the metaverse is coming as virtual reality succeeds in adequately mimicking reality. As cryptoassets integrate into our everyday lives, the two will converge to form a new digital space that functions independently and in conjunction with our existing physical world. 

However, given the current state of cryptoeconomics, which is still in its infancy, early adopters and investors have a ripe opportunity to profit from what's likely to become a dominant technology in future years. 

How To Invest in the Metaverse: The Basics

While digital realms populated with land, buildings, and avatars of real people may seem futuristic, the metaverse will liberate the red tape and limitations that currently bog down our present reality. 

With geographic constraints, time zones, and commute times rendered irrelevant, the metaverse will revolutionize how we do business and structure our societies. It's as exciting as it is daunting to consider that a virtual world will impact the established order, but that is precisely what will happen in the coming years. 

What forms the foundation of the metaverse? What comes first when exploring new worlds and interacting with digital characters? 

The answer is digital land, and digital real estate.

Land is the core of any new frontier, and the metaverse is no different. If we expect to form businesses, living quarters, and communities in the metaverse, we need a place to do it — and that means building, buying, renting, and selling land. 

We're not even in the early innings of the metaverse; the game hasn't even started, and people haven't even begun filtering into the ballpark. 

But since we're on the cusp of this new era, it's hard to know where to start, as there are many different ways to get involved with the metaverse. 

For example, do you buy land, or do you rent it? And how do you even acquire property in the first place? 

How Do I Buy or Rent Land in the Metaverse?

Metaverse stalwarts envision a future where we all have the opportunity to buy digital land and construct our own homes, businesses, and communities. While this may be the long-term goal, we're years out from that dream. That said, you can get involved with the metaverse by participating in early land sales, renting land from landowners, or using land-sharing platforms.

Two of the most popular brokerages for metaverse investment opportunities in virtual land are Decentraland and The Sandbox. 

With both metaverse platforms, you can connect your physical or digital wallet, which confirms your identity and allows you to make transactions. You buy everything with your wallet, so any digital asset you acquire in the metaverse is stored there as well. A popular web3 browser is MetaMask, which acts as your digital wallet and provides an interface for interacting with decentralized applications.

Once you have a digital wallet set up and connected to a land sales platform, you're ready to start buying virtual real estate and exploring both words. Buying might be prohibitively expensive for some, so renting is a more accessible option, as it requires less up-front investment. 

Maybe you don't want to own and want to rent a space for your gallery for just one night, or perhaps you want to establish a semi-permanent presence and rent for a week, month, or year. Some renters will "follow the money" and rent spaces in highly-trafficked areas, while others will choose to go off the beaten path and rent more affordable land in less popular areas.

Decentraland

The concept of decentralizing ownership is foundational to the project's ethos. The Decentraland team believes that "land" should be as permissionless, decentralized, and open as the internet itself. Unlike the Web 2.0 companies of our age, which have morphed into digital monopolies, Decentraland is designed to be a playground for the people, where anyone can buy land, build on it, and monetize their creations.

Decentraland wants owners to accrue as much revenue and power as their creativity will allow. In terms of its economic model, it rejects centralized models of monetizing user data and attention in favor of empowering creators and land owners. The Decentraland DAO funds the platform's development and ecosystem, the capital they extract from land and in-game sales with MANA, the platform's native digital token.

The Sandbox

The Sandbox is another popular option bearing similarities to Decentraland, but with some key differences. From a design standpoint, Sandbox mimics the pixelated looks of Minecraft, while Decentraland is a more natural, 3D-rendered world. The two platforms also differ in their business models. While Decentraland gives users full ownership and control over their land, The Sandbox emphasizes gaming and collaboration.

The Sandbox operates as a gaming platform first and foremost. It's an open-world game where players can create, play, share, and sell experiences with one another. The ultimate aim is to give users complete control over their gaming experience — something that's not possible on traditional gaming platforms controlled by centralized companies. Still, you can buy, rent, and sell land using The Sandbox's native token, SAND.

Not Interested in Metaverse Land? Try Metaverse NFTs

When we talk about "the metaverse," it's not bound to specific platforms like Decentraland and The Sandbox. Instead, the metaverse is web3 as a whole — an interconnected network of decentralized applications and protocols that are integrated with one another. 

So, when we talk about NFTs in the metaverse, we're talking about web3-native NFTs that you can use across various platforms. Technically, digital land parcels are NFTs, but they're just one type of NFT you can buy, sell, or trade in the metaverse.

Participating in land renting and ownership doesn't spark much excitement for many. If you're not interested in land, that's okay. You can still participate in the metaverse by buying and selling other NFTs. Plenty of projects focused on NFT gaming, art, and collectibles within the metaverse.

Here are some other NFTs and NFT projects worth considering:

AXS (Axie Infinity)

AXS is a digital pet community where you can buy, sell, breed, and battle your pets. The game has its own in-game economy, which runs on the Ethereum blockchain. Axie Infinity stores all "Axies" on the blockchain as ERC-721 non-fungible tokens. With a likeness to Pokémon characters, Axies can battle, breed, and transfer ownership to other players. 

Axie Infinity was one of the most popular projects in the recent NFT boom, and it communicated that Play-to-Earn (P2E) games could be a massive success.

YGG (Yield Guild Games)

Capitalizing on the massive success of Axie Infinity, YGG noticed that most NFTs cost too much money for the average player to afford. Axie Infinity's biggest user base is the Philippines, where average family salaries are under $10,000 USD annually. 

So, YGG came up with an idea to invest in NFTs and take scholarship applications for individuals who want to get involved in the metaverse but can't afford the up-front investment. YGG buys these NFTs for their scholarship recipients and lets them keep a portion of the profits. This not only helps reduce the barrier to entry but also allows talented individuals from around the world to earn an extra source of income.

ENS (Ethereum Naming Service)

An underrated but significant project in the Ethereum ecosystem, ENS allows you to map human-readable names (like yourname.eth) to cryptocurrency addresses, smart contracts, and other resources. This is especially important for ETH addresses, as they are long and difficult to remember. 

Having a short and memorable name makes it much easier for people to send you ETH or interact with your smart contracts. ENS is a core part of the Ethereum infrastructure and will become increasingly important as more people begin to use cryptocurrency. 

Think of how profitable buying domains was at the start of the internet — ENS is the cryptocurrency equivalent.

Investing in Metaverse Exchange-Traded Funds (ETFs)

Metaverse ETFs are a new way to invest in the metaverse without purchasing NFTs or digital land. Instead, metaverse ETFs track the prices of a basket of different publicly-traded companies with exposure to metaverse assets. This exposure can be direct, such as a company that owns digital land, or indirect, such as a gaming company with plans to invest in the metaverse.

Several publicly-traded companies have signaled interest in or are already invested in the non-blockchain metaverse, including:

  • Microsoft

  • Roblox

  • Match Group

  • Nvidia

  • Nike

  • Samsung

  • Meta (also known as Meta Platform, by Facebook)

  • Google

  • Epic Games

Buying ETFs with allocations in these companies is a way to invest in the metaverse through more traditional means. These companies are all leaders in their respective fields and have the resources to make significant investments in the metaverse. As the metaverse grows, so will their share prices — at least that's the plan. 

Here are just some ETFs to look into:

  • ProShares UltraPro QQQ (TQQQ)

  • Roundhill Ball Metaverse ETF (METV)

  • Evolve Metaverse ETF (MESH)

  • Subversive Metaverse ETF (PUNK)

Invest in Ember Fund’s Metaverse Index

If all of the above seems a little overwhelming, it’s because it can be — while the metaverse is proving to be worth investing into, there are so many different asset investment possibilities that it’s difficult to predict where to buy land, which project will become the next big thing, or really anything else at this very early point in development.

With that, Ember launched our Metaverse Index (MVI) so you can invest in the blockchain-based metaverse, including Decentraland, The Sandbox, and Axie Infinity, along with 15 other of the most promising metaverse projects to date. These assets are rebalanced monthly to ensure the strongest, highest potential metaverse projects continue to comprise larger allocations while weaker projects are excluded over time. 

To learn more about the MVI and other options with Ember, click here

What Are Some Use of the Use Cases for the Metaverse?

Business and Work

The metaverse will eventually become a common place for people to conduct business meetings, collaborate on projects, and more. Imagine being able to walk into a virtual office and meet with real life clients or colleagues from around the world. Of course, you can already do this to some extent with programs like Skype and Zoom, but the metaverse will take it to the next level.

Gaming

The gaming industry is one of the most prominent early adopters of the metaverse. Games like Fortnite and Minecraft have already laid the groundwork, and we're only going to see more games move into the metaverse in the future. Additionally, in-game microtransactions will become a major revenue stream for metaverse companies as players will don their unique avatars, clothing, and other assets while gaming. 

Manufacturing and Production

As VR becomes hyper realistic, so much so that it's indistinguishable from reality, it will become a valuable tool for product design and prototyping. Imagine being able to walk through a life-size virtual version of a car before it's even been built. The metaverse will allow companies to collaborate worldwide, minimize risks of serious injury through metaverse practice, and simulate real-world scenarios before they happen.

Shopping

Shopping in the metaverse will be a completely immersive experience, unlike anything we've ever seen before. Brands will have their own virtual stores where customers can try on clothes, test out products, and get a feel for what they're buying before making a purchase. This will be especially valuable for high-end products like jewelry, cars, and even homes.

Socializing

We already socialize with people worldwide on social media, but what if we could socialize with them in a virtual world? The metaverse will provide a new way for people to connect and create communities via augmented reality that is likely to incorporate VR headsets like the Oculus system. 

We'll be able to meet new people, make friends, and find like-minded individuals from all walks of life through a digital world where we can chat, play games, and interact very similarly to the way we do in the physical world. 

Bottom Line

In the end, the metaverse is a complex, multifaceted entity, making it hard to make definitive statements about its potential for future development. 

There are no definite answers to questions like "What will happen to society?" or "How will the economy change?" — many of the things we know today may seem clear to us only a few years later. 

What is clear is that many, many projects are poised to dramatically alter our lives in the next 5–10 years. 

Looking to learn more about the metaverse, digital real estate, and all things crypto investing? Explore Ember’s blog here, or Download the Ember Fund App here to start earning rewards as you learn.

Sources:

The Average Salary in The Philippines (Cost, Comparison, Outsourcing) | Time Doctor

Decentraland

The Sandbox Game

Axie Infinity

ENS Domains

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