While Decentraland is one of the most popular blockchain-based virtual worlds, it is far from the only one of its kind: Somnium Space, SuperWorld, and the Sandbox are all variations on the same theme. Some have offered built-in rental functionality for years.
A virtual landlord, Chris Bell, who owns one of the largest land portfolios in Somnium Space, says he earned $18,000 in rents in 2021. estate empire, amassing 100 lots. The same golden rules — buy in a desired location, invest in improving the property, and set the right rent — apply across the virtual and physical domains, Bell says.
Sam Huber, CEO of LandVault, says the real money is in combining land rentals with additional services such as virtual real estate design and development. His company, which aims to provide tenants with a simple end-to-end service, is currently able to recoup the cost of purchasing a plot of land in just two months.
Although renting out virtual real estate is an extremely niche market, an entire industry has already sprung up around the concept. There are not only virtual landlords, but also property managers and brokers to help them and developers to help design and build the buildings they want to rent out. There are even investment companies that specialize exclusively in virtual real estate.
The idea that someone might be willing to pay to temporarily occupy a virtual piece of land is curious in itself, but even more interesting is what it says about the trajectory of these blockchain-powered virtual worlds and the social dynamics that form within them.
Implicit in this arrangement, says Philip Rosedale, creator of Second Life, is the formation of a new “winner-takes-all” class system. The landed gentry sit on top of the social pyramid and below that are the professionals and tenants – the latter are prevented by price from climbing the property ladder themselves.
The development of advanced industries can be seen as a sign of the increasing maturity of virtual communities. But it can also be a sign of illness, says Rosedale, whose own 3D online world pioneered the concept of virtual real estate in the early 2000s.
“The accumulation of wealth in virtual economies is a major concern,” claims Rosedale. Because there are no ongoing costs of ownership for virtual landowners, he says, there will be an “inexorable” and “destructive” consolidation of wealth in the hands of a minority.
Similar theories are put forward by Roger Burrows, a sociologist and professor specializing in digital culture and social inequality at the University of Bristol, and Vassilis Galanos, a lecturer in sociology at the University of Edinburgh.
The evolution of virtual real estate is “deeply political,” says Burrows. He sees virtual worlds as places where people go to cocoon themselves with others who share their political beliefs. In this case, so-called cryptonatives have constructed a world that they, as owners of the land, are in charge of, built around the same mistrust of government and public institutions on which the crypto movement is based. Nominally everyone is welcome, but only as a tenant.
