TerraZero, a metaverse developer, announced that it has issued the world’s first metaverse mortgage.
Debt for virtual land now a reality
Taking on debt for virtual land is one of the things you never knew you needed but now have access to.
As if expensive real-world real estate was not enough, now you can also splurge on virtual real estate, even if you are short on cash. This is made possible by TerraZero, a metaverse developer that says it has issued the world’s first metaverse mortgage for $45,000 ($63,000 AUD) for a parcel in an entertainment district of Decentraland, a metaverse.
Dan Reitzik, the company’s CEO who started his crypto career in Bitcoin mining, said that the company is getting hundreds of inquiries a day from people asking them to help buy virtual property. He continues:
“At first, we thought, ‘That’s kind of crazy,’ and then we were like, ‘Why not?’ Everybody wins. Young people can’t own properties in the real world right now, but they can certainly own properties in the metaverse.”
Virtual mortgages not unlike real mortgages
The property TerraZero issued the mortgage for is in a commercial lot in an entertainment district that can fit five stories that could be leased out to provide revenue. Like regular commercial real estate, the plan would be for the income from leasing out the virtual property to exceed the loan payment to TerraZero. Reitzik said that the customer was planning to build some sort of game, as the property was close to a concert space and a popular golf game.
Like traditional lenders, TerraZero also vetted their customers by checking creditworthiness and requiring a down payment. Reitzik did not specify the amount involved or the interest rate on that but affirmed that his company was in talks with several large financial institutions. Also, the loan is only two years and is unregulated, unlike real-world mortgages.
Where the metaverse boom could lead
Older readers may be asking themselves if there is an end in sight to this metaverse fad. Chances are, it has just begun.
As several game developers have correctly pointed out, the metaverse will not be owned by any single company. That also means that there will be more than one metaverse; in fact, there could be an endless amount with theoretically endless property. But just like in the real world, some spots will be more sought-after than others, and the most hyped metaverses will attract investors and developers like the mega brokers Tal and Oren Alexander.
Add metaverse-hungry companies Meta, Nike, Adidas, Prada, and a ton others, and the picture becomes clear: everyone is jostling for position now to be ready for when the wider public starts pouring into their virtual establishments. It is not that far-fetched to think that beyond metaverse mortgages, we may see metaverse retreats, metaverse marriages, and probably a ton of other metaverse counterparts of real-world events.
Luckily for those that prefer something tangible, you can simply eschew all of that by shutting down your computer.
