Land is becoming a huge deal on the metaverse, and a lot of companies are positioning themselves to get in on the action. But, as a regular person, how can you invest in and participate in the Metaverse Real Estate Investment Trust (MREIT)?This is the bulk of what this article will aim to answer.
In a world where not a lot of people know how the Metaverse land will go, investing in a metaverse real estate investment fund that can earn money from rent and mortgage financing appears to be a less risky way to get in on the deal.
This means you are not championing any particular metaverse land and, in the event that one does better than the other, you still have your risk spread across many metaverses.
How do traditional REITs and Metaverse REITs compare?
The traditional REIT was created by Congress in 1960 as part of the Cigar Excise Tax Extension. Investors can purchase shares in commercial real estate portfolios under this clause. For the first time, this allowed ordinary people to participate.
MREIT was created as part of a broader adoption of cryptocurrency and block chain technology, and, of course, the Metaverse. The MREIT doesn’t need government approval or oversight, at least for the time being.
Secondly, the traditional REITs are in 3 forms. The Equity REIT deals with the renting of space, and the dividend is divided yearly. There are also the mortgage REITs that basically cut loan checks to people wishing to buy properties, and there is the last type, which are the hybrids, which are a combination of the two previous REITs.
The metaverse REIT is very much expected to take the form of a traditional REIT.
You will be able to rent out your space on the metaverse, and there will be some form of financing for people who want to get in on the game, either for personal use or for profit.
Those who are pioneering the metaverse REITS are people with extensive experience in traditional REITS. Two such individuals are the tokens.com co-founder and CEO, Andrew Kiguel, and Eric Klein, the founder of the MetaSpace Real Estate Investment Trust (MREIT), which launched on PancakeSwap.
Let’s not forget Mr. Ben Soifer, whom BOTS appointed as its first REIT advisor, a man who has traditional real estate expertise.
On a final note in this subheading, traditional REITs must pay out 90% of their dividends or else they are going to have a problem with the SEC. This means that your capital investment will hardly appreciate.
The MREIT is much more likely not to follow this path, and you should expect the board to push for a lot more than just spending 10% of the money they make on expansion.
The simple reason is that there is hot competition brewing in this MREIT space and companies will be itching to go over and beyond to leave the competition in the dust, hence, the need to burn a lot of cash in the process.
What will power the MREIT transaction?tion
The blockchain will power transactions on digital assets, of course, including land on the metaverse.
Inverstors are expected to own smart contracts similar to the traditional REIT and most, if not all of them eventually, are expected to have their own tokens that can be listed and traded and, of course, will be used to facilitate transactions on their respective MREIT.
What companies are currently involved in the MREIT?
1. The partnership between Tokens.com and the Metaverse group
The Metaverse Group is betting big on MREIT, and tokens.com has bought into the idea by paying $2million to buy up 50% in a digital real estate portfolio held by the Metaverse Group. The end game of this merger is to eventually create an MREIT.
The digital territory of the Metaverse Group is divided into various virtual worlds where individuals may communicate, play games, and exchange digital treasures.
Decentraland and The Sandbox, account for the majority of the company’s portfolio.
We will update this one for you as it unfolds.
2. BOTS Inc
BOTS, Inc. is a global technology firm. The company focuses on robotics, Blockchain-based solutions such as decentralized financial applications, cybersecurity, crypto generation, mining, equipment repair, and extended warranties on Bitcoin mining equipment.
But I guess they said to themselves, “Why shouldn’t we move in to create our own MREIT as well?” This is exactly what they did.
They now plan to launch their MREIT under the name REIT.MV™. BOTS Inc. will mint a specialized token (REIT.MV token) which will be listed on several crypto exchanges.
Alchemy is the brainchild of two Stanford graduates, Nikil Viswanathan and Joe Lau, who built a platform that supports the Ethereum, Polygon, Arbitrum, Optimism, Flow, and Crypto.org networks by providing node endpoints that can be accessed with APIs.
These nodes enable developers to more efficiently build decentralized apps, NFTs and the likes.
Alchemy has become a serious player, with a market cap of $3.5 billion, and even Jay Z and Will Smith are investors.
They have now confirmed they are moving to the MREIT business as well, as announced by Forbes on December 9th, 2021. And we ask that you keep an eye on this space because we will notify you once this is official.
The MetaSpace Real Estate Investment Trust (MREIT) is a brain child of Eric Klein, which had a successful venture capital round on Unicrypt and was able to hit 30% of its soft-cap in just a day.
Off the back of successful crypto bets, Eric has also thrown his hat into the MREIT space and we will keep you posted on this.
This blog will be expanded to cover more MREIT. However, keep in mind that the MREIT concept is still very new, and companies are still figuring things out.
This article, for the most part, is to give you pointers on where to look.