“Hey man. Wanna buy the Brooklyn Bridge?”
That sounds like a bad line from a 1950s movie about a gullible kid moving to the Big City and ending up in over their head. But through NFTs, you really can now buy the Brooklyn Bridge, the Eiffel Tower, or even your own dream home. Sort of.
SuperWorld is an NFT startup which sells virtual real estate in an environment they call their “metaverse.” The metaverse is an exact facsimile of the real world, except that every property (be that a house, a commercial building or a famous landmark) is linked to an NFT and tracked via the blockchain. That allows SuperWorld’s users to virtually buy and sell nearly any property from the company’s catalog of over 64 billion unique parcels.
I spoke with SuperWorld’s team about their platform and how their service ties into the emerging world of NFTs (edited for clarity).
TS: Can you explain briefly what NFT are, and how they relate to traditional cryptocurrencies?
NFT’s stand for non-fungible tokens, which are characterized by their digital scarcity as a collectible and wholly distinct asset to buy, sell, trade, or hold. So when one buys a piece of SuperWorld, you acquire a unique and irreplaceable piece of Ethereum blockchain.
How do virtual properties work? How do people buy and sell them?
Owners of virtual real estate locations in our metaverse hold one of a kind digital assets with the potential to become highly sought out by advertisers. The platform already allows owners to list their real estate for resale, with each plot of non-purchased land starting at just 0.1 ETH (Ethereum). Some users on the platform are already listing their land at much higher asking prices. The Eiffel Tower for sale for 888 ETH.
Once you own a virtual property, what can you actually do with it?
When owning land, there are multiple aspects as to you can do with it. You are able to monetize it by letting companies advertise on the land, or even sell the land to them. You can use the augmented reality application we’ve created (still in beta) to put different art works and different creations [on your land]. Overall, it is the owner’s land and they can choose what to do with it!
What prevents someone from selling the same virtual property on multiple marketplaces?
Nothing prevents people from selling property in other marketplaces. People are already selling properties on OpenSea. In terms of selling the “same” property twice, we are backed by smart contracts from the ERC-721, so there can be no “duplicate” properties.
How many virtual properties have you sold? What kinds of interest have you seen in your platform?
Roughly 5,000 [SuperWorld’s CEO has not confirmed that number].
Browsing properties on SuperWorld feels a lot like searching for an actual home on Zillow or Redfin. You navigate through a map provided by OpenStreetMap, and each unique parcel of land is clickable. You can use filters to select specific parcels, see their selling price, and then purchase them with Ethereum. Once you own them, you can later sell them to other people or businesses, ideally at a markup.
As SuperWorld suggests, you can also potentially use an AR app to attach photos, video or advertisements to your virtual property. If people visit the property in SuperWorld’s app, they can theoretically pull up an app and view whatever multimedia you’ve attached to your virtual property. SuperWorld suggests that if this content is monetized, property owners could receive a revenue share. The app’s virtual world could also eventually become a place to display other NFTs that a user owns, such as by hanging them in a virtual gallery or displaying them in a virtual home attached to a SuperWorld property.
It’s important to note that purchasing a virtual property on SuperWorld doesn’t give you can kind of ownership interest in the real-life property that it’s connected to. That’s both a good and a potentially bad thing. It means you can “own” your favorite major landmark (the Brooklyn Bridge has already been sold, though the sale amount was not immediately clear). But I can see how it could eventually be used to attach negative messages or imagery to the virtual clone of a real property owned by a real person.
Because actual property records are publicly accessible, it would be relatively trivial to “buy" a property owned by a real-world enemy on SuperWorld and attach something negative to it in the company’s virtual AR space. To SuperWorld’s credit, its Terms of Service specifically forbid “unlawful, defamatory, harassing, abusive, fraudulent, obscene, or otherwise objectionable content.” This should give SuperWorld broad authority to regulate content connected to its virtual properties. Hopefully the company will work to ensure that its virtual world remains civil.
Ultimately, SuperWorld is likely betting on the same dynamics which make actual real estate valuable. One can always create a new piece of NFT art. But there is only so much property in the world. That scarcity, SuperWorld is likely betting, will ultimately drive up prices for virtual properties, and avoid the dilution which can potentially occur with the market for other NFTs. When a plot of land is purchased on SuperWorld, the company’s map displays it as a grayed out block. SuperWorld is likely hoping to blanket as much of the world as possible in those blocks. Scrolling around a map and seeing which parcels have already sold is an interesting exercise in understanding which parts of the world people value the most.
The issue, though, is that unlike real-world property which can only be owned by one person at a time, virtual properties could potentially be sold multiple times on different marketplaces. SuperWorld’s smart contracts prevent the same property from being listed multiple times on SuperWorld. But as the company says, someone could potentially sell a property on SuperWorld and then sell the same property on another NFT property marketplace. I could even create an NFT for the “Brooklyn Bridge” without connecting it to a virtual real estate platform, and sell it for whatever price I want. Comedian John Cleese of Monty Python fame has already done just that.
Ultimately, then, an investment in a SuperWorld property is an investment both in the virtual property itself, and in SuperWorld. If the company becomes the dominant platform for buying and selling virtual real estate, early investments could potentially pay off handsomely. But if another network supplants it, the value of its virtual properties could drop substantially. Like all things in the NFT world, then, SuperWorld’s properties are a risky asset. So, too, is any new cryptocurrency, and many real-world assets, too. Whether SuperWorld interests you is likely tied primarily to how you approach that risk, and how much you believe in the company.
Remember, though, if someone tries to sell you the real Brooklyn Bridge, let me know. I’m totally in!
Nothing in this article should be construed as investment advice. Consult a financial advisor before making any new investment. I do not own Superworld properties as of this writing and have no financial interest in the company.