An attempt to comprehend the value proposition of virtual lands. Read before you buy land.

1. User growth.
Over the past year, the daily UAW (Unique Active Wallets) has risen to 2.38 million. In 2021, venture capital firms increased their investment in blockchain by ~730% YoY, but this year is set to decline. We watched live the hype for fundraising campaigns to create metaverses and within this hype hype for the purchase of land in the metaverses after the rebranding of META (Prohibited Organization in the Russian Federation). The main leitmotif for buying land in the metaverse is Scarcity (but not the only factor).

2. But are lands really so limited?
If we turn to Real life, is the land scarce? This statement is true only for densely populated regions (Japan, Monaco, Singapore). And if you take it as a whole, then the land is not so scarce. For example (Mongolia, Russia, Argentina). These countries have a lot of land, the demand for which is near zero. The demand for land in these countries is more or less stable, again, only in certain densely populated areas with developed infrastructure, living conditions and the general economic situation.

3. What about virtual lands?
Thanks to the NFT, metaverses can develop similarly to the real economy only in the virtual space. And for the formation of fundamental factors for the growth of demand, the same parameters are important as in real life.

4. Some introductions.
In the good old Early Access web3, the largest metas like The Sandbox and Decentraland have 166,464 and 90,601 lands respectively. If we consider the lands as a page in social networks or a channel in a messenger or your own website (an analogy can be drawn with this today, although it is drawn), then it is obvious that not all users of the metaverse really need land. Therefore, there is a certain percentage of users who may need land to create something on it. But what rate of land/users should be in order to keep scarcity and what are the goals for the number of metaverse users set by the developers?

Who are they targeting?
Roblox: MAU - 226M Users Over 600M
Minecraft: MAU - 140M Users Over 400M
Fortnite: Over 350 million users

Decentraland now: MAU around 20k with peak online 30k. Target tens of millions of users. Average price: ~$9100 (-74%) Gender: ~$8200 (-34%).
The Sandbox now: No exact data yet, up to 100k online. the game can be accessed during the Alpha Season, with a target of around 10 million users within 100 years, which could be in the range of 20-40 million MAUs. Average Price: ~$5900 (-70%) Gender: ~$5700 (-24%)

It can be assumed that in 2022, under favorable conditions, the average MAU in these projects could be 100k. With unfavorable fall to 10k.

5. User-to-Earth Conversion.
If we take target indicators for users of 10 million, and consider different scenarios for the success of projects, then the conversion range will be within 0.1% -1% (above the target expectations), so that the land is in demand and this is in popular metas like Decentraland and The Sandbox.

Example: If the project is niche, not as global as TSB and DCL and aims for the foreseeable future at 1 million MAU, then today the acceptable maximum amount of land for such a project is about 10000, provided that the team manages to achieve its goals. If more, then you should think about whether you overdid it with the supply. In addition, it follows from this that investment in land is a long-term investment. Yes, and selling them is more difficult. the number of sales per day for the same TSB and DCL is about 50 and 15 pcs. / day.

6. What is the value, brother?
The value of land, first of all, is PEOPLE. Cool creators or celebrities able to attract attention. Attention is the very harvest with which you can collect profit. They can be your neighbors. Example: Snoop Dogg. One of the premium lands was sold for $458,000, hubs or plazas in the case of DCL, but don't forget the whitepaper specs.

7. Take your time, otherwise you will “have time”.
While there is not enough historical data to assess the possible loss from investments in virtual land or the factors associated with it, but one thing remains obvious - LOCATION. And this concept can include both the project itself and the area in the project, as well as specific coordinates of the earth. And when statistics appear based on data from LTV, ARPU, ATV users, then the land selection criteria will expand even more. In a good way, it is better to imagine what type of activity is suitable for a given location. Perhaps this is the road along which you can set advertising billboards.

Go to the meta, study the location, estimate various metrics, average prices, who does what and in what areas, what development prospects are there, compare rental prices, how many users are now. At the same time you will get an examination and who knows, maybe you can become a virtual real estate agent 😉

8. Recap.
There are several insights.
• Lands are not so limited in the short term when considering the number of blockchain users
• NFT and web3 metas will remain, but they need a killer app like Axie Infinity in 2021 at x10 scale to develop. And so far we have only 3 clear contenders TSB, DCL and not even in Star Atlas Early Access.
• Keep in mind that the supply of land on the blockchain will increase faster than the demand for land and many collections that have not announced the creation of the metaverse can do this, moreover, the creation of the metaverse is still an important value proposition for NFT collections. Therefore, the growth of thematic metaverses is expected. There will be plenty of land. I haven’t counted yet, but there is already a feeling that the number of announced lands is approaching the number of active blockchain users (daily UAW) and so far no one can say with certainty whether they are currently overvalued or undervalued, but the best lands are most likely , will grow if the hypothesis about the usefulness of the metaverses is confirmed and if mass adoption occurs and we see a project with 10 million DAU.
• It is possible that elite lands will grow faster and the gap between the floor and the average sale price will increase due to the growth of the elite. Here's what you really should pay attention to and bet when you think the price will be acceptable.
• Before buying, it is worth participating in the project in order to personally understand what is happening and what are the prospects and imagine how many users could use this meta in N years and with whom it could compete. Ideally, conduct a SWOT analysis, and you can also involve a specialist in virtual lands.
• It is important to carefully select land for purchase, analyzing many factors, and not just the fate of the project, evaluating the specific location and infrastructure, nearby resources and neighbors.

9. Usefulness.
Well, in order to raise the utilities of this post, I share an interesting tool on land analytics: