How to invest in the Metaverse

In 1992, author Neal Stephenson published his third novel, titled Snow Crash. In it, Stephenson's characters interact in an entirely digital environment where appearances can be changed at will and digital properties are as valuable as their real-world counterparts. Stephenson called his digital environment "the Metaverse."

Twenty-eight years later, publicly traded companies like Meta (formerly Facebook) and decentralized autonomous organizations (DAOs) like the Decentraland Foundation are working to make the Metaverse a profitable reality. This has opened up entirely new revenue streams for small investors, gamers, digital collectors, and developers.

However, it is important to note that the Metaverse is still in its infancy and its value proposition has yet to be proven. Any investment in the Metaverse should be considered speculative and high risk.

Stocks from the MetaverseThe

least risky option for retail investors looking to invest in the metaverse are publicly traded companies whose business models or profitability are linked to the metaverse. The list includes:

• Meta Platforms Inc (NASDAQ: FB) - In October, Mark Zuckerberg announced that the company formerly known as Facebook Inc. would undergo a major rebranding to Meta Platforms Inc. Since that announcement, Meta has released a virtual reality metaverse platform, Horizon Worlds. Meta's Oculus Quest 2 VR headset was also one of the most popular gifts over the holidays. However, it remains to be seen if the headset's increasing sales will lead to more Horizon Worlds users.
• Roblox (NYSE: RBLX) - Roblox is an online metaverse platform that allows gamers to create and share virtual worlds with other Roblox users. Since its founding in 2006, Roblox has grown rapidly, with 9.5 million independent developers, 24 million unique digital experiences, and 49.4 million daily active users - a 35% increase year-over-year. But despite these numbers, the company has yet to turn a profit.
• Boeing (NYSE: BA) - Boeing is using the Metaverse to expand and improve its production capabilities. In an interview with Reuters news agency, Greg Hyslop, Boeing's chief engineer, said the aircraft manufacturer plans to create its own digital environment where its employees - humans, computers and robots - can seamlessly communicate and collaborate around the world.
• Microsoft (NASDAQ: MSFT) - Microsoft is trying to find its Metaverse niche in the professional world. The company plans to release Mesh for Microsoft Teams in 2022, an add-on to its popular video conferencing platform that will allow individuals to create personalized avatars and collaborate across geographic boundaries in a 3D holographic environment. A key feature of Microsoft Mesh will be Holoportation, a tool that allows users to access the aforementioned digital environment using a VR headset. Users will appear as a digital, lifelike image of themselves and can interact with team members as if they were there in person. On Feb. 2, 2022, Business Insider published a report stating that Microsoft had stopped work on a retail-focused augmented reality headset with Metaverse capabilities due to a "lack of a unified strategy. It remains to be seen how this development will affect the company's Metaverse efforts.

What is metaverse land?

Although the metaverse is still in its infancy, platforms like The Sandbox and Decentraland have already begun selling digital real estate in the form of non-fungible tokens (NFTs), digital tokens on blockchain networks that can represent a wide range of unique items. When a person purchases a piece of Metaverse land, the blockchain network that runs the Metaverse platform verifies the sale and transfer of ownership.

Once the virtual property is acquired, the owner of the Metaverse land NFT can rent, sell or build on their digital property. Japanese video game maker Atari recently purchased 20 parcels of digital land in Decentraland established its own crypto-casino. Using its own native ERC20-based Atari token, players can place bets and receive winnings tax-free in cryptocurrency. Atari has also announced plans to open its own virtual hotel complex in 2022.

How to buy land in the Metaverse and other digital itemsManyMetaverse platforms

have created marketplaces where users can buy and sell digital land and other collectibles in the form of NFTs. Here's how it works.

The user who wants to buy a Metaverse property must specify on which platform he wants to buy digital land. Popular options include Decentraland and The Sandbox, but there are others. Do your own research before buying a property on the Metaverse.

The user must create a digital cryptocurrency wallet, a type of computer software connected to a blockchain network that stores cryptocurrencies and is compatible with the associated blockchain that runs the Metaverse platform.

From there, the buyer must access and connect their digital wallet to the marketplace of their chosen Metaverse platform. Marketplaces can usually be found on the Metaverse platform's websites.

At this stage, buying digital land is similar to buying land in the physical world. The buyer must consider the price, location, and future value of the digital land he or she intends to purchase.

Once the buyer finds a plot of land, they must purchase the tokens or coins they want to use to buy it and store them in their digital wallet. The type of tokens or coins needed to complete the transaction varies depending on the Metaverse platform. For example, to buy digital land in Decentraland, the user must purchase MANA tokens. If he wants to buy land in The Sandbox, he must purchase SAND tokens.

If the buyer has already connected and funded his digital wallet to the Metaverse marketplace, all he has to do is bid for the land or buy the land directly. The cost of the land will be removed from the digital wallet and the NFT representing the land will be transferred to the user's wallet.

The same process applies to the purchase of other Metaverse NFT items such as clothing and accessories for avatars.

Metaverse cryptoMetaverse projects on blockchain networks are powered by fungible tokens - tokens that are divisible and can be exchanged with each other. These tokens are used to purchase digital assets such as virtual land or outfits for avatars. They can also be exchanged for other cryptocurrencies or fiat currencies. Certain Metaverse cryptocurrencies also allow their holders to vote on decisions within a Metaverse platform, such as where to invest money or which new features to release first.

In theory, as the value of digital assets increases, so does the value of the associated tokens. In addition, some Metaverse platforms, such as Decentraland, burn all MANA tokens used to purchase digital assets, permanently removing them from circulation and increasing the value of the remaining tokens.

Below are the Metaverse tokens listed in descending order by market cap size. These options are inherently risky and should be considered a speculative investment. In general, it is advisable to never invest more than you are willing to lose.

Decentraland (MANA) - With a market cap of approximately $6 billion at the time of writing, Decentraland's MANA token powers the Decentraland metaverse and is used as a medium of exchange on the platform's marketplace.

The Sandbox (SAND) - The Sandbox focuses on a metaverse of user-generated content, similar to Roblox. The SAND token is awarded to individuals who participate in The Sandbox's alpha user testing. SAND tokens can also be purchased on digital exchanges. SAND is a utility, governance and staking token. Holders of SAND can use it to purchase digital goods and services, vote on proposed initiatives within The Sandbox, and deploy their SAND to earn additional rewards.

Axie Infinity (AXS) - Unlike MANA from Decentraland, which is used to purchase digital goods and services, AXS from Axie Infinity is a governance token. Those who own AXS will be able to vote on proposed decisions affecting Axie Infinity's ecosystem, including how funds in the community coffers are spent. Future plans include modifying the AXS token so that it can be used to purchase digital goods and services on Axie Infinity.

Enjin Coin (ENJ) - Enjin is a blockchain gaming company. Unlike The Sandbox or Axie Infinity, which offer a single metaverse product, Enjin offers its users a variety of interconnected gaming experiences. Enjin is unique in that its native token, ENJ, is "infused" into every NFT minted within its ecosystem, arguably providing real value to digital assets.

The future of the metaverse?

Companies heavily invested in the Metaverse are spending millions of dollars to convince consumers that the dawn of the Metaverse is imminent. But will it usher in an era of mass adoption and accessible digital interaction, or will it remain a niche product reserved for gamers and future tech enthusiasts? Only time will tell. Until then, retail investors interested in the metaverse should explore these platforms and consider the future value of the metaverse for themselves.

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Edited 3/17/2022 to reflect changes in market cap of tokens or coins mentioned in this article.