Virtual Worlds and NFTs — Decentraland & Co Explained
You can buy, collect, and sell assets that exclusively exist in virtual worlds. Learn how in this guide!
If you are new to the world of NFTs, you will probably be surprised to hear that there is a booming market in the trade of digital assets in virtual worlds. According to data from NonFungible.com, virtual worlds now make up around 20% of the total NFT market.
In this guide, you will learn how to join this rapidly growing space.
What Are Virtual Worlds?
Virtual worlds are computer-simulated worlds where users relate with each other like in the real world.
They are represented as avatars and can, among other things, interact with other users, play games, build houses, and collect art.
Virtual reality (VR) and digital gaming often go hand in hand. These industries have existed for more than two decades, with gamers spending millions yearly, acquiring weapons and other items for their adventures.
**Thanks to tokenization and the introduction of NFTs, virtual world collectibles now have even more value. **
Users can acquire them as NFTs, verifying ownership and making them tradable both in-app and on third-party marketplaces like OpenSea.
Virtual Worlds: What’s Out There?
Asides from Decentraland, which we will explore in this article, there are other booming virtual worlds in the NFT space.
Somnium Space, for example, allows users to buy virtual lands, build objects, and monetize them by trading them on OpenSea. The 4-year-old social VR platform has snowballed, recording more than $2M in monthly trading volumes.
The SandBox is a metaverse project that allows users to acquire virtual lands in five different sizes on the Ethereum blockchain. Its features include the NFT, and voxel-based 3D animation software VoxEdit, which allows users to build game assets that can be monetized on their marketplace, as well as a tailor-made No-Code Game Maker software, to build game experiences. Last month, the platform sold up to $2.8m worth of land.
Axie Infinity, a blockchain-based gaming platform, recently sold nine plots of yet-to-be-launched virtual land for $1.5M.
How to Purchase Real Estate in Virtual Worlds
The journey to investing in NFT-based virtual worlds is a relatively short and easy one. Of course, a basic understanding of how the platforms work is needed, but most of these virtual worlds only have minor differences.
First, you choose the virtual world you want to enter by typing the app’s URL into your Trust Wallet Dapp Browser.
The next step is to connect your wallet to start building. With Trust Wallet, you can easily access and launch yourself into all the virtual worlds in the NFT space.
Your Ethereum wallet connects automatically, removing the need to create a third-party account for payments.
As an example, let’s peek into Decentraland, the leading virtual world in the NFT space.
What is Decentraland?
Decentraland is a decentralized VR platform that enables users to buy and trade land, play games, and interact with one another.
Decentraland is the biggest virtual world in the NFT space. It’s a unique blend of top games like Fortnite and Minecraft, where users can buy and trade parcels. These parcels are 16 x 16 portions of land with unique coordinates.
Decentraland’s virtual land is represented on the Ethereum blockchain as non-fungible tokens known as LAND.
The three-year-old platform uses two tokens:
MANA : the platform’s native utility token. It’s used for transactions, including buying in-game collectibles like avatars and LAND. The ERC-20 token can also be bought and traded on exchanges. Ownership of MANA gives users the right to partake in governance, incentivizing users to operate a shared digital world.
LAND : a non-fungible token that represents all parcels on the platform. LAND owners are free to build projects of their choosing within their parcels and earn all proceeds generated by their creations.
The Ethereum-based platform consists of three layers:
· Consensus layer which verifies, tracks, and maintains transaction ledgers, ensuring authenticity and security.
· The content layer which controls parcel contents using script files and interactive definition.
· The real-time layer where users’ avatars interact using voice chat and messaging.
Users run Decentraland. Holders of the MANA token can suggest or vote on decisions to improve the platform, which is in-keeping the founders’ goal to make it the top decentralized VR platform in the NFT world.
How Decentraland Works
In Decentraland, you can explore the virtual world, play games, and interact with other players. You can also purchase LAND — a 16 x 16 portion of virtual land, using MANA.
You reserve total creative freedom on your parcel and can build hotels, casinos, and games and earn returns as other users interact with your projects in your parcel.
Alternatively, you can choose to hold your token and (potentially) sell them later at a higher price in the in-app marketplace.
The game operates on the Ethereum blockchain, and smart contracts run all transactions.
NFT-based virtual platforms are poised to transform virtual reality as we know it.
With the immense infrastructure in place and mainstream attention NFTs are receiving, it’s not unreasonable to expect virtual worlds to gain even more attention in the future.