4 Ways to invest in the Metaverse.
- Participate in the Metaverse platforms such as Decentraland or Sandbox(There are too many to list every available platform). By participating, players can buy land and make money by either reselling it or charging rent to other players. Wearable NFTs for in-game avatars can also be bought and sold.
- Invest in an ETF that has exposure to the Metaverse, the Roundhill Ball Metaverse ETF (META). The ETF’s top 10 holdings include NVIDIA CORPORATION, MICROSOFT CORP, ROBLOX CORP, FACEBOOK INC, UNITY SOFTWARE INC, AUTODESK INC, SEA LTD, AMAZON COM INC, TENCENT HLDGS LTD, IMMERSION CORP. The expense ratio is 0.75% which is in an acceptable range.
- Invest directly into stocks and companies that are involved in the Metaverse, instead of an ETF.
- Invest in virtual world coin tokens such as MANA and SAND, that are used in the Metaverse platforms as currencies. There is no known way of calculation to form a relationship between the price of a coin token to the utility, as far as I know. But it should be logical to expect healthy pricing if the platforms associated have demand for the products(volume of users, land, NFTs) and able to bring in revenue.
I bought into MANA in early October, I think, because I was fascinated by the concept of virtual assets such as land, houses, and virtual traffic flow.
For my own portfolio, I own some MANA at average cost of around $0.75, and at the recent peak of price $3.60, it is 4.8X and almost a 5X. I took 10% profits at $3 to have some cash on the side. I am looking to buy into SAND. Not financial advice, just sharing personal thoughts.
What is the Metaverse?
Let’s try to be rational investors and know what we are investing into. The term Metaverse, grew in popularity after Facebook changed its name to Meta, to emphasize its development goals in the Metaverse. The search trend index grew almost 10 times from mid-October 2021 to the end of October 2021. Starting from the time Facebook released the plans to move into the Metaverse and finally change its name on 28 October 2021.
There are existing platforms in the Metaverse, namely Decentraland and Sandbox. In the way I see it, the two platforms are similar in many ways.
In Decentraland’s whitepaper, it says “Decentraland is a virtual reality platform powered by the Ethereum blockchain. Users can create, experience, and monetize content and applications.”. Decentraland is ready to play and the setup is relatively fast and easy.
In Sandbox’s whitepaper, it says “The Sandbox team is building a unique virtual world where players can build, own, and monetize their gaming experiences using SAND, the main utility token of the platform.” Sandbox is still in development with Alpha launch in Q4 2021, but do not be deterred by this. Sandbox has many well-known partnerships such as Atari, Gemini, Michael Witz (Founder of Redemption Games and creator of top-grossing mobile games Cookie Jam and Sweet Escapes), and many others more.
Both platforms allow players to purchase land, NFTs in the metaverse which can be traded using in-game currencies.
Decentraland has its own in-game currency token called MANA and Sandbox has SAND.
Maybe believe Facebook’s (now Meta) direction of development will be creating a walled garden. Its version of Metaverse will most likely be built based on Mark Zuckerberg’s vision. Unlike Decentraland and Sandbox, which involves the community’s ideas and contributions.
What is the Metaverse
The word itself is not new. Author Neil Stephenson coined the term “metaverse” in Snow Crash, a dystopian cyberpunk novel published in 1992. In fact, in 2011, Stephenson told Forbes that he saw video games like World of Warcraft as the real metaverse: Virtual worlds you could inhabit with your friends. In 2021, games like Minecraft and Fortnite are perhaps closer to the vision of the metaverse he foresaw.
In a Metaverse, players can interact with other players, perform tasks that potentially replace the need to perform the same tasks in the real world. For example, having a meeting, playing card games, sharing a scenic view, all taking place at the same time even though players can be far apart in the real world.
Difference between Metaverse and Virtual Reality
Virtual Reality (VR) is the use of computer technology to create a simulated environment. A player can play a game in virtual reality with a head-mounted display and controller and the player can interact with objects in the game.
A Metaverse is much more in-depth. The Metaverse experience extends further than just playing a game. Players can also attend events and concerts in real time. For example, players can create an avatar (a game character) in Decentraland to attend a Halloween party, purchase and wear NFTs as outfits.
Potential of the Metaverse
For Work: As mentioned earlier, activities that take place in the real world can potentially be replaced in the Metaverse. Work meetings can be held, Facebook (Meta)’s meeting platform is called Horizon Workrooms. In a review, the author says the meeting felt like something between a video call and a physical meeting.
Quote “So you can see someone’s hand motions while they talk, for example, which made it feel more like I was in a conference room than in a sea of lifeless bodies”. Undoubtedly, it should give users an experience closer to being in a physical meeting than a video call meeting. However, there are mixed feelings. In a video call, a user can turn off the video function anytime, which you cannot do in this case. Also, wearing a headset for a prolonged period can be uncomfortable.
For Play: In Decentraland, players can participate in concerts, events, win or purchase wearable NFTs to make their characters look unique and stylish. In Sandbox, anyone can create games for free. You will be able to monetize the games you create. Paris Hilton entered a partnership with Decentraland and Snoop Dogg entered a partnership with Sandbox.
For Interaction: The shift of remote work has certainly propelled the development of the Metaverse. With less interaction with family, friends, or colleagues in the real life, the Metaverse can replace the sense of interaction to a certain extent. Hanging out, doing activities together in the Metaverse can be a delightful experience. It cannot replace real physical interactions and experiences totally, but it may be a good choice in scenarios where people are far apart geographically in real life.
For Investment: Institution's interests in virtual land and NFTs should bring some confidence to retail investors like you and me. A Canadian company Tokens.com, recently purchased a 50% stake into a Metaverse Group, One of the World’s First Virtual Real Estate Companies. On the Metaverse Group website, one can purchase land pieces on different Metaverse platforms. The interest from institutions is truly amazing.
How does the land bring value to owners? As a landowner, you can rent out spaces for billboard advertising, players in the game can click on the advertisements they see and it leads to the website the billboards are promoting. Mind-blowing! The landowner can also rent out the space if someone wants to organize an event on your land or sell the land at a higher price.
I wonder if I will buy a virtual land/house or a real house first.
Also, Coca-Cola (NYSE: KO) released their first-ever NFTs in Decentraland in July 2021.
Disclaimer: Always do your due diligence before investing in a stock. Investing of any kind involves risk. I am not a financial advisor. Your investments are solely your responsibility and I do not provide personalized investment advice. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment.
Helpful Links
Decentraland: https://decentraland.org/
Sandbox: https://www.sandbox.game/en/
The Roundhill Ball Metaverse ETF (META): https://seekingalpha.com/symbol/META
Decentraland Token MANA: https://coinmarketcap.com/currencies/decentraland/
Sandbox Token SAND: https://coinmarketcap.com/currencies/the-sandbox/
