The team behind Somnium Space will be selling more virtual land within their universe starting from March 19th. For a period of ten weeks the team will auction 25 parcels per week. When these auctions end on May 28th, the developers will announce the exact date for the Secondary Land Offering, which will happen somewhere in the second half of 2020.
During this month’s auction medium sized parcels will have a starting price of 10 ETH, or 1300 dollars based on the current exchange rate. At the same time XL-sized parcels start at double that price. The auction will follow Dutch auction rules. That means that the price goes down until someone buys the asset. The lowest possible price will be 1.6 ETH ($209) for the medium parcels and double that amount for the XL ones.
When Somnium Space sold its first parcels last year, the average price was 0.4 ETH for a medium-sized parcel and 0.8 ETH for a big one. At the moment the cheapest parcels cost 2 ETH, while the most expensive pieces of land on the waterfront are listed for 666 ETH. That’s 87 thousand dollars!
Auctions will always start on Thursday around 15:00 CET, and they will finish on Saturdays around the same time. Most of these auctions will be done using Ethereum (ETH), even though some auctions will give a discount when using the in-game currency Somnium Cubes.
Looks like bait for whales
Got to be honest here. Somnium Space is doing these Dutch auctions to give artists and users an option to own land. They recognize that the current prices on the marketplace might be a bit steep for many users.
Our SLO is planned for second half of 2020 which leaves many new artists and users without an option to own land because prices continue to dramatically increase and amount of parcels on sale is decreasing, since current owners do not want to sell.Somnium Space – blog – March 13th 2020
I think the biggest problem is that there’s such a limited amount of available land. Somnium Space will offer a maximum of five thousand parcels. Investors will try to grab their hands on any land that comes available for a good price.
Currently on the marketplace a waterfront parcel is available for 3.95 ETH ($517) or more. Therefore it’s easy to predict that the parcels from the auction will sell for a minimum amount of 3 ETH,or 393 dollars. Most likely avid investors will jump on this opportunity to get some of that rare virtual waterfront land in their portfolio.
Available parcels in virtual worlds
Below you will find the total amount of available parcels per virtual world, and the average selling price right now on OpenSea. This doesn’t mean that all parcels in these virtual worlds are available on the market yet. For example, both Somnium Space and The Sandbox still need to sell considerable amount of land. On top of that, many investors want to hold off until the value of these lands will sky rocket.
- Cryptovoxels – 2795 parcels – avg 1.54 ETH ($200)
- Somnium Space – 5000 parcels – avg 2.6 ETH ($340)
- Decentraland – 90.601 parcels – avg 4.83 ETH ($630)
- The Sandbox – 166.464 parcels – avg 0.77 ETH ($100)
In general a small piece of land in The Sandbox costs 35 dollars, but bigger parcels are more expensive. However, at the moment less than ten percent of the total world has been sold. In the upcoming third land sale The Sandbox will sell another ten percent. This leaves a lot of space for people to jump in without the risk of missing out. Besides, The Sandbox sells its land on a first come first serve basis. There’s nothing driving the price up in these land sales.
Somnium Space on the contrary will now be selling its land based on economic power. Those with deep pockets will be able to buy the parcels in the auction. This is why the price of parcels in Somnium Space is going up so much. The scarcity of land parcels makes land valuable, and the way it’s being auctioned will not benefit those who already can’t afford it on the public marketplace.
In Cryptovoxels and Decentraland – which I recently visited – all land has been sold already. The more utility and development happens in these worlds, the more valuable land will become. One year ago the average price for land in Cryptovoxels was less then one hundred dollars. Now the price has risen to 500 or even 700 dollars average.
Without a doubt virtual land is in high demand. These are among the most traded tokens on OpenSea. On a weekly basis these projects top the charts in terms of total trading value.
Also published on Medium.