By Christos Makridis
Influencers have made a lot of money for social-media platforms and smaller piles for themselves — while facing the risk that at any time, without warning, YouTube or TikTok or Facebook could “deplatform” them.
Now, thanks to the metaverse, content creators can own their own digital real estate – earning much more revenue while eliminating the risk of an unpredicted eviction. While better for the influencers, that’s bad news for social-media platforms, which will no longer get their cut of the action.
In short, influencers are becoming digital owners, not digital renters. And, just as individuals change their outlooks when they switch from renters to homeowners, the new digital owners are starting to see themselves differently. More independent, less tolerant of restrictions imposed by third parties.
Now a digital land rush is underway.
Digital real estate – or digital land rights – surged in 2021. Sandbox, the leading digital real estate company, had roughly 65,000 transactions and $350 million in 2021, according to the Center for Finance, Technology, and Entrepreneurship. Furthermore, metaverse startups are receiving millions of dollars in investment, like Everyrealm’s most recent receipt of $60 million.
Much of digital real estate trades have been devoted towards gaming, fashion, and other leisure activities. Pop singers such as Ariana Grande and Justin Bieber have performed in virtual stages. These metaverses offer fully simulated virtual realities where people can tour, buy, and sell NFTs over many products and services that have physical counterparts.
However, there are many more use cases that the metaverse offers for the creative economy and economic development. For content creators, ranging from digital artists to bloggers, digital ownership has been a gamechanger. “We’re entering a ‘Web2.5 era’ where content creators have benefited by the rise of social media, but what they create is owned by centralized groups… now, they are starting to own the end-to-end process and we’ve seen some of these creators become wildly successful… that is inspiring a new generation of creators,” said Avery Akkineni, president of Vayner3. NFTs are empowering many artists to take ownership over their work, reducing the waste that historically came from all the intermediaries.
Going forward, Akkineni predicts that we are going to see the “tale of two metaverses” where content creators continue to expand their mediums on major centralized platforms and, perhaps simultaneously, build up additional decentralized communities. “We’ll see bold, technical moves there and they [content creators] will have to abide by the same laws… both sides are going to converge to the middle,” said Akkineni. In metaverse spaces – whether fully virtual reality or even just augmented reality – NFTs are poised to play a major role to licensing content.
Education is also poised for disruption.
Psychological factors, especially the fear and anxiety that may come with venturing into new areas, are often the biggest barriers to upskilling. By using augmented or virtual reality tools, educational institutions can sequence different layers of practice and difficulty. “Lasting learning requires incorporating desirable difficulties into training—that is, making things hard on yourself but in good ways,” said Dr. Elizabeth Ligon Bjork, Professor of Psychology at UCLA.
That’s also true in the case of senior executives. “People who are passionate in these ways learn much faster than those who are motivated by fear,” according to John Hagel III, the former co-chairman for Deloitte LLP’s Center for the Edge.
Naturally, universities are exploring how to leverage the metaverse, especially augmented reality, to improve the learning experience for their students. For example, Arizona State University launched Dreamscape Immersive formally in 2022. “We’ve always known there is huge potential to unlock new learning realms for students by merging VR — and all that it empowers educationally and socially — with advanced, adaptive educational experiences,” said Michael Crow, President of Arizona State University.
Digital land rights also pose an opportunity for economic development and women empowerment. “Roughly half of women in sub-Saharan Africa feel insecure about their land and property when faced with the prospect of widowhood or divorce,” according to the 2020 Prindex Global Comparative Report. Of those between 18-24, 24% also felt insecure about their property rights.
That is a recipe for disaster. Property rights are an integral for economic growth, according to Professors Simon Johnson and Daron Acemoglu. Property rights are a precondition for economic activity because they constraint “arbitrary behavior and expropriation by the state and elites.”
However, web3 has created new tools for identifying and measuring property rights that correspond with physical land structures. Some companies have emerged to build digital registries for financial institutions to manage collateralized land records. That allows institutions to digitally track the ownership history, attributes of the land parcel, and more across stakeholders and over time.
Property rights in the metaverse “can leap-frog the problems of legal pluralism that we see in Africa by writing the rules of rights/transactions directly into the fabric of the virtual world and making all contracts transparent and smart… Same for issues of enforcement which should be automatic and swift in the metaverse, assuming contracts are fully specified,” said Malcolm Childress, executive director for the Global Land Alliance. New widows are often stolen from by family members who see an opportunity to seize assets. Admittedly, “early movers with development capital, tech skills and insider knowledge stand to dominate,” so caution is required, said Childress.
BenBen is one company working with land market actors to build custom digital infrastructures for facilitating land-based transactions in a trusted and transparent environment. “Metaverse land economics give us a clear picture of what we’d like to achieve in the real-world,” said Emmanuel Noah, founder of BenBen. “Participants have near perfect information on the buyer, seller, price history, and ownership history – an attribute that BenBen is actively creating within real-world land markets. As we begin to superimpose digital assets over real-world environments, we are also presented with the opportunity to explore the extent to which traditional land administration rules can be imported and applied within the realm of web3 property ownership.”
But digital land rights are only one piece of the puzzle and they do not come together overnight. “You have to work on digital transformation – sort of like a lifestyle of “know your customer” laws where users learn about their data, how to save money, get a better education, and so on… digital land rights have to not only create the digital asset, but also operate within the right framework of governance and digital transformation,” said Troy Stremler, CEO of Newdea.
Although metaverse applications for fashion and gaming might be some of the showiest examples that catch the public eye, it is becoming increasingly clear that digital land rights also have a wide array of value-enhancing applications for both content creators and educational service providers.