Due to the high cost of distressed land assets, ownership becomes more difficult for ordinary users. For this reason, Ralph Copley, a board member of the Casper Society, argues that fractional ownership, similar to real-world mortgages, may gain traction within the virtual space through non-fungible tokens (NFTs).
Copley told Cointelegraph that understanding fractional ownership within the metaverse is a lot like the old system of ownership. With prices rising, many cannot afford to buy and own real estate. This causes people to rent or lease real estate, giving a form of fractional ownership. He explained that:
“Instead of the typical tenant-buyer relationship and processes inherent in the legacy system, it is smart contracts and virtual assets such as NFTs that underpin this fractional ownership system.”
Casper exec adds that this also applies to “leasing advertising space or issuing debt to finance new projects.” According to Copley, smart contracts enable a “fragmentation agreement” that divides a piece of land into “subunits” that are individually leased. Copley noted that:
“Theoretically, this could be applied to any digital asset, provided the smart contracts and associated technologies are designed for that purpose.”
Copley also highlighted that while there are many larger developments within the metaverse, there will also be “countless smaller operations”. These may come in the form of art galleries and social media hubs. According to Copley, these operators will need access to virtual real estate to begin construction.
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Regardless, the Casper executive anticipates that leasing converged land will become commonplace. Copley stated that this would “open the door” to wider adoption, allowing anyone to participate. The executive believes this could lead to an “explosion of unique content” similar to the start of Web1 and Web2.
Meanwhile, as the crypto winter rocks the markets, investor interest in GameFi and metaverse projects continues to grow, according to a DappRadar report. In 2022, investments of $4.9 billion went into Metaverse-related projects to support further developments.