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While the metaverse has become very popular, virtual land sales have seen significant demand in recent times. Virtual real estate has become expensive, in comparison to the prices 12 months ago, and virtual parcels stemming from a couple of blockchain metaverse projects have sold for seven figures. With virtual real estate getting extremely pricey, one firm called Terrazero Technologies is offering metaverse mortgages.
Terrazero Provides Metaverse Real Estate Loans to People Looking to Acquire Virtual Land and Homes
At the moment virtual real estate has become a hot commodity as people continue to leverage their crypto assets to purchase metaverse parcels. Projects like The Sandbox, Axie Infinity, and Decentraland have seen virtual land parcels sell for hundreds of thousands and even millions. Last November, Bitcoin.com News reported on a few million-dollar sales in metaverse blockchain worlds. For instance, eight plots of virtual Axie Infinity land sold for 888 ether or $1.5 million at the time of settlement.
“Crypto’s important in the metaverse because it is the mechanism by which we conduct business,” Terrazero’s CEO and founder Dan Reitzik says.
Virtual land adjacent to Snoop Dogg’s metaverse mansion in The Sandbox sold for $450K in ethereum (ETH) during the first week of December. A study published by the metaverse analytics firm Metametric Solutions expects metaverse real estate sales to reach $1 billion this year. Now a project called Terrazero Technologies is working on offering home loans to people looking to acquire virtual real estate. According to a report stemming from mpamag.com, Terrazero completed its first metaverse mortgage from a client looking to finance the acquisition of virtual land.
Terrazero said it closed its first-ever metaverse mortgage transaction with land derived from the Ethereum-based virtual world Decentraland. Similar to a regular mortgage the buyer agrees on the terms and makes monthly payments until the loan is paid. Speaking with Andrew Martinez of National Mortgage News (NMN), Terrazero CEO and founder Dan Reitzik explains that the deed is a non-fungible token (NFT).
“We do KYC, or Know Your Customer,” Reitzik detailed. “Then they show us a business plan so that we know that they’re going to be able to pay us back over time. If it sounds viable then we buy the land on their behalf.” The Terrazero founder added:
The deed is essentially an NFT. We hold that in the company’s cold storage until the loan is paid off. But we give developer rights to the land so that the person can build whatever they want. If the customer doesn’t pay, then obviously we have that as our collateral.
Terrazero’s metaverse mortgage follows the Florida home in Gulfport that was sold as an NFT. Furthermore, a project called the One DAO is attempting to purchase the infamous home dubbed The One Bel Air in a similar fashion. During the interview with NMN, Terrazero’s CEO disclosed that the team is working with an unnamed banking partner. The project is also launching a metaverse real estate platform called Amadea.