Metaverse housing bubble bursting? Virtual land prices crash 85% amid waning interest
The metaverse sector is witnessing its very-own housing crisis moment, thanks to massive declines in the prices of its virtual lands in 2022, led by waning users' interest and a crypto bear market.
In particular, metaverse projects built on the Ethereum blockchain, including the Sandbox and Decentraland, have witnessed substantial declines in their valuations and other key metrics, data from WeMeta shows.
For instance, the average price of lands sold across Decentraland peaked at $37,238 in February 2022. But as of Aug. 1, their costs had dropped to an average of $5,163. Similarly, the Sandbox's average sale price dropped from circa $35,500 in January to around $2,800 in August.
Overall, the average price per parcel of virtual lands across the six major Ethereum metaverse projects dropped from approximately $17,000 in January to around $2,500 in August, or a 85% decline.
Poor land sale volumes further indicate dampening user interest in Metaverse projects.
On a weekly average, the volume, which represents the amount of lands (derived in currency) traded, has dropped from its peak of $1 billion in November 2021 to approximately $157 million in August 2022.
Simultaneously, the market valuations of the Metaverse tokens in circulation have dipped by more than 80%, led further by a broader retreat across the cryptocurrency sector due to unfavorable macroeconomic conditions.
For instance, the market valuation of Decentraland's MANA tokens in circulation dropped from $10 billion in November 2021 to $2 billion in August 2022. Similarly, Sandbox's SAND's net capitalization reached $8.4 billion to around $1.78 billion in the same period.
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Meanwhile,
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