- Virtual real estate market cap is at its lowest point in 2022: $1.5B.
- Virtual real estate accounts for approximately 14% of all NFT trading volume.
- Otherside trading volume accounts for 75% of the virtual real estate market.
- Somnium Space is the only world whose land appreciated in price this quarter.
- The price of land in NFT Worlds dropped 80% after Minecraft announced intentions to block NFTs and blockchain integration.
- The majority of land holders either hold land for less than 7 days or more than 6 months.
- The top 10 land purchases this quarter were all Otherside parcels that included a Koda trait.
As a global recession looms, crypto markets have entered into winter mode. Last quarter, we noted the sharp decline in prices across asset classes. While global markets briefly rallied over the summer, virtual land prices are now resuming a more steady decline. Relative price performance will be compared between worlds in the Land Prices section.
Overall NFT trading volume is down 84% this quarter, and there have not been many primary land sales occurring to bolster trade volume like we saw in Q2. This has caused a substantial drop-off in trading volume, as seen in the Sales Volume section.
Historically, the number of landowners has always increased quarter over quarter. However, the number of unique land owners has begun decreasing this quarter, indicating that virtual real estate is being accumulated by current landowners. The Ownership section explores this relationship across worlds, and reviews trends identified in the landowner hold time data.
For real-time data and summary statistics about virtual real estate, please visit Parcel’s public Dune dashboard: Parcel’s Virtual Real Estate Dashboard.
- This report contains data provided by Dune Analytics, MetaMetriks, Nansen, and Parcel’s internal data science team.
- All monetary figures in this report are listed in USD ($) unless otherwise noted.
- This report is not intended to serve as a recommendation for financial advice.
The total market capitalization of virtual real estate for all Ethereum-based worlds is about $1.5B.
The following chart represents the top 20 virtual worlds by land market capitalization. Market capitalization is calculated by multiplying the total circulating supply of land parcels by the average price per parcel over the last 30 days.
- Tier 1 worlds have a land market cap greater than $100M
- Tier 2 worlds have a land market cap between $25M – $100M
- Tier 3 worlds have a land market cap between $10M – $25M
- Tier 4 worlds have a land market cap less than $10M
This report covers the following six ETH-based worlds, which represent 90% of the total market cap of virtual real estate.
To see land sale metrics for other worlds that are not included in this report, the following public Dune dashboard is recommended: Metaverse Land Community.
Recall that last quarter’s sales volume included the Otherdeed for Otherside mint, which alone accounted for over $300M. In addition, the overall slow-down in NFT trading volume has continued from last quarter.
The Otherside contributed 75% of total virtual land sales volume this quarter, followed by The Sandbox (12%), Decentraland (5.8%), NFT Worlds (5.3%), Webbland (1.4%) and Somnium Space (0.4%).
Monthly sales volume decreased by 32% from July to August and another 66% from August to September.
Prices of virtual land experienced a short-term rally this quarter in correlation to trends observed in the S&P 500, BTC, and ETH. This relationship is exhibited in the following chart using Parcel’s virtual real estate index (VREI). 
In August, the S&P 500 and BTC rallied roughly 10% and 25%, respectively, before hitting new lows at the end of September. ETH rallied 80% in August and ended the quarter about 26% above where it began.
As most land is priced in ETH, the price change of the VREI in USD-terms becomes especially volatile. To normalize for ETH volatility, the following VREI chart shows the percent change of the VREI priced in ETH, instead of USD.
The ROI on virtual land outperformed ETH through July, then underperformed through August. There was a brief rally in September. However, as the price of ETH began to fall in mid-September, the virtual land market fell alongside it, underperforming during that period. This confirms the previous observations that virtual land behaves as leveraged ETH that sees exaggerated performance to both the upside and the downside.
Zooming out, ETH and the VREI are down 43% and 63% year-over-year (YoY), respectively. The VREI and ETH share a 0.47 correlation over this time. If markets continue to sell off, we expect to see the VREI curve eventually cross below ETH.
The following chart summarizes the price performance between the VREI and ETH over different time periods.
Land prices in the following section are displayed in terms of ETH, as opposed to USD.
The following charts compare the median price vs. floor price, per land parcel, by world. Each chart contains the QoQ percent change of both median and floor price per parcel.
The next chart shows how each world’s land performed relative to one another over the quarter.
- Somnium Space land prices have rebounded this quarter after falling dramatically in Q2, and is the only world to post positive median price change this quarter (96%).
- Decentraland floor prices fell in August but recovered in September to around 1.4 ETH.
- Land prices in The Sandbox and Webbland fell 27% and 31%, respectively; just underperforming the VREI (23%).
- Despite dominating trading volume within the virtual real estate market, Otherside land floor prices have dropped 42%. NFT Worlds experienced the steepest decline in median prices (-80%). This was largely due to an announcement from Microsoft on July 20, that Minecraft will block the use of NFTs and blockchain technology on its servers. This will likely force NFT Worlds to build their own game engine instead of relying on Minecraft.
Land ownership is an important metric to understand how dispersed the total supply of land is within a world. It is also a decent proxy for user adoption.
The following chart shows the total number of unique wallets that hold virtual land in each world. This begins with the initial land sale of Decentraland in 2018 and continues to present day.
Note that a wallet may hold land from multiple worlds, so there may be some double counting if considering the total count of wallets in aggregate across all worlds.
The next series of charts show the number of new owners (unique wallets) per month, per world. Newcomers = change in wallet count.
Historically, the change in wallet count has almost always been positive QoQ, indicating that the number of landowners is increasing. However, this quarter, change in unique wallet count is negative, indicating that land is being accumulated by wallets that already hold land in said world. Decentraland is the exception, where unique land owners have continued to grow, albeit at a slower rate.
The unique holder ratio measures how dispersed land supply is by calculating:
The following chart summarizes the unique holder ratio for each world.
This indicates that Webbland has the most dispersed land supply and Decentraland has the least.
Hold time is the length of time (in days) between when a parcel of land is bought and sold. There is no limit to how many times a plot of land may be resold.
Short-term land holders are typically speculative investors looking to flip the land for a profit. Long-term holders, on the other hand, are more likely to have an incentive to build on their land and/or contribute to the ecosystem of the world.
The following charts show how each world compares in terms of short- and long-term holders.
The most extreme long-term holders are those who have never sold their land (HODLers). The Sandbox has the highest percentage of buy-only transactions (54%), closely followed by Somnium Space (50%). This is even more impressive considering these are also the two oldest virtual worlds in this analysis.
For real-time data, see Parcel’s Hold Time Dashboard on Dune.
The top 10 sales of Q3 were all plots of land from the Otherside that included Koda traits. 
The significant drop in trading volume this quarter has confirmed what many have been speculating for months: that we are currently in the midst of a crypto winter. The previous crypto winter lasted nearly three years, from approximately January 2018 to December 2020. However, virtual real estate as an asset class is not only impacted by crypto markets, but overall adoption of the metaverse. While the metaverse is a nascent and developing concept, it may be the catalyst that helps virtual real estate endure this crypto winter.
Even though the majority of land prices are declining, it is important to pay attention to the projects that are continuing to build and deliver utility to their users. These will be the worlds that endure and whose land will ultimately grow in value over time.
Visit www.parcel.so to explore VRE on our Marketplace.
1) VREI currently includes six virtual worlds: Decentraland, The Sandbox, NFT Worlds, Voxels, Somnium Space, and Worldwide Webb. The weighting of each virtual world in the index is based on the previous three months of sales (USD) of virtual land.
2) Prices are at time of sale.