Mark Cuban is a crypto industry evangelist.
He has invested in many projects and is a fervent supporter of Ethereum, whose platform allows the development of apps dedicated to decentralized finance (Dapps), the creation of non-fungible tokens (NFTs) and other uses.
Ether, the native token of Ethereum, is the second cryptocurrency by market value after bitcoin. Its value should go up further in the coming months due to a big change expected in September that will allow many transactions to be carried out on the platform quickly and at an affordable cost.
However, Cuban also remains one of the strongest critics of the crypto industry which encompasses a galaxy ranging from web3, the new iteration of the internet, cryptocurrencies, decentralized finance (DeFi) and the metaverse, this immersive virtual world that Mark Zuckerberg, CEO of Meta (META) (Facebook, Instagram, WhatsApp), sees as the future of his social media empire.
'The Dumbest' Investment Ever
The craze around the metaverse is accompanied by multiple trends and projects, including buying virtual land in the metaverse.
Virtual real estate is made up of designated pieces of code in an interactive web experience. Pieces of code are partitioned to create individual “plots” within certain metaverse platforms and are made available to purchase as NFTs on the blockchain.
Sales in 2021 reached $501 million, according to MetaMetric Solutions. In January, sales topped $85 million and could reach nearly $1 billion in 2022. Platforms Sandbox, Decentraland, Cryptovoxels and Somnium are the top players in this market.
None of this impresses Cuban, who has just launched one of the most violent attacks against land purchases in the metaverse.
"The worst part is people are hooked on real estate in this place [metaverse]," Cuban told Altcoin Daily Youtube Channel in a recent interview. "That's just the dumbest s--- ever. The dumbest, dumbest. Did I say it was dumb. No, that's not strong enough. Super meta immaculately dumb," the Shark Tank's star blasted.
He went on to make a clear distinction between real estate in the real world and real estate in the virtual world. For him, the value of real estate is considerable because of the scarcity. But in the virtual world, we really can't talk about the scarcity of land.
"After you create a community, not before, but after you create a community, then you can find places depending on how that community works. That can have perceived value because of access or whatever, right? But beforehand, based off of a traditional real estate model, dumbest mother s--- ever," Cuban added.
Has the Virtual Real Estate Bubble Burst?
Cuban knows what he is talking about as he has invested in Yuga Labs, which owns the famous NFTS Bored Ape Yacht Club collection. BAYC is very involved in real estate in the metaverse since the company has sold bits of virtual land.
"I am an investor with Yuga Labs right (but) I still thought it was dumb to do the real estate," the entrepreneur said when asked about BAYC's decision to sell plots of virtual land. " Maybe it was great money for them. That wasn't based off a utility."
"What Yuga Labs is doing that is smart. They're calling it real estate. But really, it's just a token for access. It's just marketing nomenclature, basically. Now maybe they'll be able to build it to turn into other things, but you got to have a community first, and then again, it's just gated access."
Last November, Republic Realm, a metaverse real estate investor and advisory firm, said it had completed the largest ever land acquisition in the Sandbox in a deal valued at more than $4.3 million. The company is developing 100 islands, called Fantasy Islands, with their own villas.
A virtual plot next to rapper Snoop Dogg's digital mansion was purchased for $450,000 by an NFT collector in 2021.
But in recent months, the real estate bubble in the metaverse seems to have burst as cryptocurrency prices crashed.
The average price of a piece of virtual property in Decentraland is currently worth $14,385.27 according to WeMeta, or 61% less compared to the average price of $37,238.68 reached in November 2021.