Project Exploration of an Open and Inclusive Metaverse
Collaborators The Sandbox
Contact person Dr. Lennart Ante

In collaboration with

Project description:

The metaverse is by no means a clearly defined concept, but rather a complex compilation of various characteristics that have their basis in the science fiction literature. In this context, the metaverse is often understood as a virtual world, as portrayed in films such as The Matrix. We are currently at a point where the metaverse of the future can either be designed and controlled centrally by a few companies, or it can be designed inclusively and openly. An open and inclusive metaverse puts ownership and control of digital assets and experiences in the hands of its creator economy (i.e. stakeholder empowerment) and allows portability (i.e. users are able to port their assets and experiences from one metaverse application to another). The project will explore the phenomena of an open metaverse in order to contribute to the long-term positive development of the metaverse.

We delve into various aspects of the open metaverse, including digital real estate (e.g., LAND), where users can buy, sell, and develop virtual land; avatars, which represent users’ digital personas; and NFTs (non-fungible tokens), which enable the creation, ownership, and trade of unique digital assets. By examining these elements, we aim to better understand the potential opportunities and challenges posed by the metaverse and provide insights into how an open and inclusive metaverse can foster creativity, collaboration, and equitable participation for all stakeholders.


Finance Research Letters

Digital Real Estate in the Metaverse: An Empirical Analysis of Retail Investor Motivations

Lennart Ante, Friedrich-Philipp Wazinski, Aman Saggu

Abstract: This paper investigates retail investor motivations for digital real-estate ownership in the crypto-metaverse. Utilizing a detailed financial behavior survey of metaverse landowners’ intrinsic and extrinsic motivations, we apply principal components analysis to uncover four distinct motivational groups: Aesthetics and Identity, Social and Community, Speculation and Investment, and Innovation and Technology. Our findings reveal that age, education, investment knowledge, risk-taking, and impulsivity significantly influence investor group membership. This research provides valuable insights to investors and developers, underscoring the potential of a platform to attract retail investors with speculative intentions, engagement longevity, and passive/active trading characteristics, contingent on unique crypto-metaverse characteristics.

Keywords: virtual land; non-fungible tokens (NFTs); virtual worlds; individual investors.


BRL Report No. 8

Avatars: Shaping Digital Identity in the Metaverse

Executive summary: Avatars are a building block of the metaverse. This report explores the central role avatars play in digital identity, providing users with infinite possibilities for expression, communication and representation. It explores how users can create and control their digital identities through avatars, enabling them to use the metaverse across different platforms and applications. The report also examines avatar markets and their size, including the use of 3D avatars in virtual worlds and the emergence of digital asset emotes as new forms of expression. Finally, it considers the important role that avatars and digital identities will play in the development of an open, inclusive and interoperable metaverse of the future.

Suggested citationAnte, L., Fiedler, I. & Steinmetz, F. (2023). Avatars: Shaping Digital Identity in the Metaverse. Blockchain Research Lab, Report No. 8.


Economics of Innovation and New Technology

Non-fungible token (NFT) markets on the Ethereum blockchain: Temporal development, cointegration and interrelations

Abstract: The market for non-fungible tokens (NFTs), transferrable and unique digital assets on public blockchains, has received widespread attention and experienced strong growth since early 2021. This study provides an introduction to NFTs and explores the 14 largest submarkets using data from the Ethereum blockchain between June 2017 and May 2021. The analyses rely on (a) the number of NFT sales, (b) the dollar volume of NFT trades and (c) the number of unique blockchain wallets that traded NFTs. Based on the number of transactions and wallets, the Ethereum-based NFT market peaked at the end of 2017 due to the success of the CryptoKitties project. As of 2021, fewer transactions occur but the traded value is much higher. We find that NFT submarkets are cointegrated and feature various causal short-run connections between them. The success or adoption of younger NFT projects is influenced by that of more established markets. At the same time, the success of newer markets has an impact on the more established projects. The results contribute to the overall understanding of the NFT phenomenon as an emerging asset class and suggest that NFT markets are immature or even inefficient.

Keywords: NFTs; non-fungible tokens; cryptocurrency; cointegration; Granger causality


BRL Report No. 7

LAND Ho! Digital Real Estate in the Metaverse as an Emerging Asset Class

Executive summary: This report highlights digital real estate (or virtual land) in the metaverse as an emerging asset class. It examines the price drivers of digital real estate and whether it represents a new and unique asset class. The analysis shows that, similarly to traditional real estate markets, neighborhood effects play a crucial role in the pricing of virtual land. Furthermore, the price of digital real estate has no significant correlation with those of other asset classes. Thus, it can be concluded that digital real estate is an emerging asset class in its own right and could potentially be used to diversify or optimize risk-adjusted portfolios.

Suggested citationAnte, L. & Fiedler, I. (2022). LAND Ho! Digital Real Estate in the Metaverse as an Emerging Asset Class. Blockchain Research Lab, Report No. 7.



The Non-Fungible Token (NFT) Market and its Relationship with Bitcoin and Ethereum

Abstract: Non-fungible tokens (NFTs) are transferrable rights to digital assets, such as art, in-game items, collectables or music. The phenomenon and its markets have grown significantly since early 2021. We investigate the interrelationships between NFT sales, NFT users (unique active blockchain wallets), and the pricing of Bitcoin and Ether. Using daily data between January 2018 and April 2021, we show that a Bitcoin price shock triggers an increase in NFT sales. Also, Ether price shocks reduce the number of active NFT wallets. The results suggest that (larger) cryptocurrency markets affect the growth and development of the (smaller) NFT market, but there is no reverse effect.

Keywords: NFTs; non-fungible tokens; cryptocurrency


BRL Research Note #2

An analysis of LAND in The Sandbox: Q4 2022

Executive summary: Digital real estate in the form of digital parcels of LAND in virtual worlds such as The Sandbox is emerging as a new asset class and may represent a significant aspect of future digital social interaction, identity on the internet, the metaverse and financial markets. Virtual LAND owners can build on it, use it, sell it or rent it out, making it a basis for their virtual presence. As LAND is a new asset class, there is understandably (still) a strong need to better understand the phenomenon, and fact-based evidence can help. The objective of this research note is to analyze LAND sales in the leading virtual world of The Sandbox based on statistical methods and to uncover empirical evidence that will assist in better understanding the asset class and better assessing potentials and challenges. Our research note „ An analysis of LAND in The Sandbox: Q4 2022” conducts a data-driven analysis of LAND in regards of its pricing, distribution and other factors.

Suggested citationBlockchain Research Lab (2022). An analysis of LAND in The Sandbox: Q4 2022. Blockchain Research Lab, Research Note  #2.