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

article-image

Source: Shutterstock

share

key takeaways

  • 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.

Republished with permission from @charl3svii on Twitter. Charles is a Metaverse outlaw, Palm Holder, and Co-Founder of @nifty_island and @nyft_studios


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Nillion_DeSci_Report_Template.png

Research

Nillion’s Monad Integration is poised to catalyze the next phase of DeSci’s evolution by eliminating key privacy bottlenecks. This synergy allows researchers, institutions, and DAOs to exchange sensitive data and insights securely while managing governance and payments onchain.

article-image

Celebrating the wisdom of a diamond-handed Bitcoin Legend

article-image

With the success of RWAs and stablecoins, DePINs could onboard the next wave of crypto users

article-image

Is crypto straying too far from things of value?

article-image

Firedancer and Solana ETFs look less significant than before

article-image

The newly passed House bill amplifies that strategic pivot for the Trump administration, from attempting austerity to running the economy hot

article-image

Unable to secure further funding, the game cycled through three different blockchains and at least five different game engines since 2018