A Vancouver-based company has officially completed the first-ever metaverse mortgage.
TerraZero Technologies Inc. — a Vancouver Web 3.0 metaverse-focused company — announced that through its platform, it completed its first-ever “metaverse mortgage” on a plot of land in Decentraland — a self-governing digital world powered by the second most popular cryptocurrency, Ethereum.
For those who don’t remember, the metaverse is essentially a marriage of both the digital and physical worlds experienced through virtual and augmented reality. It’s filled with persistent virtual worlds that continue to exist even when you’re not playing. In late 2021, Mark Zuckerberg, the owner of Meta, formally known as Facebook, called it “the future” of the internet.
Neither the financial terms of the mortgage nor the client’s identity was disclosed.
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So, what is a metaverse mortgage?
Essentially, it’s a way to digitally finance virtual real estate.
TerraZero offers this newly designed metaverse mortgage service to its clients who intend to finance the acquisition and purchase of virtual real estate, represented as a Non-Fungible Token (NFT), in Decentraland. Psst, if you don’t know what an NFT is, read this.
CEO and Founder of TerraZero, Dan Reitzik, said it’s “an entirely new economy.”
“Mortgages and financing availability will expedite the development and adoption of the metaverse,” said Reitzik.
How does it work?
TerraZero clients can log in to its platform and explore virtual real estate listings to make an offer on or broker a deal to invest in other NFT assets. TerraZero provides the majority of the financing to enable the client to purchase its virtual real estate.
For this service, clients make monthly payments with cryptocurrency until such time that the mortgage is paid off, upon which the virtual land (NFT) will be fully transferred to the client. With their virtual acquisition, clients can build on their land, organize events, run digital storefronts, host their internal company office, and so on via the metaverse.
Is it legit?
As of now, experts say metaverse mortgages more closely resemble cryptocurrency assets rather than physical land. Cryptocurrency is often unpredictable and volatile — increasing and decreasing in price in extreme ways — whereas real estate often appreciates in value.
In the press release, TerraZero issued a cautionary statement about the “forward-looking” information presented, warning against the regulatory uncertainties and ills of cryptocurrency and NFTs.
“Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the company,” the press release reads.
Either way, cryptocurrency is converging into the real world in unexpected ways, and it is unclear whether a metaverse mortgage will appreciate the value of digital assets or depreciate it.
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