SuperWorld Lets You Buy Virtual Real Estate Using NFTs
“Hey, man, wanna buy the Brooklyn Bridge?”
This con dates back to the turn of the 20th century, but today, thanks to non-fungible tokens (NFTs), you really can buy the Brooklyn Bridge, the Eiffel Tower, or even your own dream home. Sort of.
SuperWorld is an NFT startup that sells virtual real estate in an environment it calls the metaverse—an exact facsimile of the real world, except that every property, be it a house, commercial building, or 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 more than 64 billion unique parcels. A SuperWorld team member says the platform has sold roughly 5,000 virtual properties to date.
I spoke with SuperWorld’s team about their platform and how their service ties into the emerging world of NFTs.
This interview was edited for clarity.
Thomas Smith: Can you explain briefly what NFTs are and how they relate to traditional cryptocurrencies?
SuperWorld: NFTs, or non-fungible tokens, are characterized by their scarcity as a digital collectible and are wholly distinct assets to buy, sell, trade, or hold. When you buy a piece of SuperWorld, you acquire a unique and irreplaceable piece of the Ethereum blockchain.
How do people buy and sell virtual properties?
Owners of virtual real estate in our metaverse hold one-of-a-kind digital assets with the potential to become highly sought-after by advertisers. The platform allows owners to list their real estate for resale, with each plot of land starting at just 0.1 ether (ETH). Some people are listing their land at much higher asking prices: The Eiffel Tower is for sale at 888 ETH.
Once you own a virtual property, what can you actually do with it?
There are multiple possibilities: You can 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 artworks and creations on your land. Overall, it’s the owner’s land—they can choose what to do with it.
What prevents someone from selling the same virtual property on multiple marketplaces?
Nothing. 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 NFT standard, so there can be no duplicate properties.
Browsing properties on SuperWorld feels a lot like searching for an actual home on Zillow or Redfin. You navigate a map provided by OpenStreetMap, and each unique parcel is clickable. You can use filters to select specific parcels, see their selling price, and purchase them with Ethereum’s ether cryptocurrency. Once you own a property, you can sell it to other people or businesses, ideally at a markup.
As SuperWorld suggests, you could also use an AR app to attach photos, video, or advertisements to your virtual property. Visitors to your property in SuperWorld’s app can theoretically view whatever multimedia you’ve attached to your virtual property. SuperWorld says that if this content is monetized, property owners could receive a revenue share. The app’s virtual world could also become a place to display a user’s other NFTs, perhaps 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 ownership interest in the real-life property it’s connected to. That’s both a good and potentially bad thing: It means you can “own” your favorite major landmark (sorry, the Brooklyn Bridge has already been sold) but I can see how someone could 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 that 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 that could occur with the market for other NFTs. When a plot of land is purchased on SuperWorld, it appears on the map as a grayed-out block. SuperWorld is likely hoping to blanket as much of the world as possible in those blocks. Scrolling around the map to see which parcels have already sold is an interesting exercise in understanding which parts of the world people value the most.
The issue, however, is that unlike real-world property, which can be owned by just one entity at a time, virtual properties could be sold multiple times on different marketplaces. SuperWorld’s smart contracts prevent the same property from being listed multiple times on the platform. But as the company says, someone could 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.
In the end, an investment in a SuperWorld property is an investment in both the virtual property and SuperWorld. If the company becomes the dominant platform for buying and selling virtual real estate, early investments have the potential to pay off handsomely. But if another network supplants SuperWorld, the value of its virtual properties could drop substantially. Like all things in the NFT world, SuperWorld’s properties are risky assets. So, too, is any new cryptocurrency—and many real-world assets. 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 adviser before making any new investment. As of this writing, I do not own SuperWorld properties and have no financial interest in the company.