Scarce Virtual Land Is a Losing Strategy, Co-Founder of Nifty Island Says
The pseudonymous Nyft Studio creator shares thoughts on recent events in the metaverse
- Without great content and a significant user base, a virtual world cannot have value in the long run
- If we could teleport in real life, land would be very cheap
Scarce virtual land is not only unethical, it’s almost certainly a losing strategy. Here’s why:
Building a game is tough. Building an immersive game world for millions of players that has any hope of lasting the test of time is beyond tough. It’s an immense challenge, a never-ending process of iteration that has to start on the right principles.
The allure of prelaunch tokens and scarce virtual land is that they generate easy money and engagement. The truth is, it’s an incredibly costly way to raise capital.
You’re taking on a debt in the form of game design constraints and a corrupted relationship with the player. If scarce virtual land is to have real value, especially tens or even hundreds of thousands to millions of dollars of value, it must gatekeep access to create in the game world.
Look at Minecraft, Roblox, and even YouTube. Would these platforms be better if the right to create on them was limited to a tiny number of landholders? Would better content be created there? Do you want to spend time in this country club metaverse?
Without great content and a significant user base, a virtual world cannot have value in the long run. Scarce land is only as valuable as the demand for access to it. It undermines the creative potential of a platform, making it less appealing to visit.
This model has been tried several times now. It has virtually no creative output and no successful worlds, and yet is the model our community continues to bet on.
It is also obviously a model that rewards rent seeking, an entirely unnecessary move toward digital feudalism. This is a recipe for disaster.
Web3 is meant to disrupt old forms of hierarchy and reward creativity and participation. Scarce virtual land does the opposite.
Finally, land on planet earth is abundant. Land in cities is scarce but only because we cannot teleport they way users do in the metaverse.
We pay for land in cities because it gives us priority access to search and discoverability of content. If we could teleport, land would be very cheap.
So, consider this a warning. If you have significant investments in this category, there are real risks.
But beyond the financial risks, if you value creativity and open ecosystems, there are also ethical risks to endorsing this deeply flawed model.
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