On January 29, TerraZero Technologies released one of the first pledged loans in the Metaverse – a network of virtual worlds where users can interact with others, experience entertainment, participate in events, and more.
TerraZero's CEO said the company has issued a two-year pledge for a $45,000 parcel of land in "Decentraland," a metaverse of about 92,000 parcels, with an undisclosed down payment and interest rate.
The company used the traditional real estate pledge review process to self-finance the purchase and now owns the irreplaceable tokens (NFTs) used to securitize the pledged land.
TerraZero provides the majority of funding (loans) for customers to purchase virtual real estate. It now offers this newly designed Metaverse Pledge Service asset as a pledge to customers who wish to use the company's "Metaverse Mortgage" loan to purchase and acquire virtual real estate (represented as an irreplaceable token) using the underlying NFT as a digital asset.
Our company's vision is to create and distribute tools that connect the real world to the metaverse," said TerraZero's CEO. A whole new economy is taking shape, and they want to provide entrepreneurs and the public with products and services specific to the metaverse that are available in the real world. Pledged loans and other forms of financing will accelerate the development and adoption of the metaverse, and TerraZero is excited to be one of the first participants in this exciting new economy."
As time passes, we continue to move toward a world of virtual reality, which seems to be becoming more and more realistic with the help of new technologies.
One of these advances is the concept and formation of the metaverse. It is crucial to understand what the Metaverse is and how it works.
What is the metaverse?
It is a hybrid of technical elements such as virtual reality, augmented reality and video, in which the user "lives" in a digital world.
Metaverse's supporters want its users to work, play and stay connected with friends in a variety of ways, from concerts and conferences to virtual excursions around the world.
In terms of functionality, it is a shared virtual space where virtual reality and digital reality merge. In other words, it is "device-independent" and not controlled by a single company. It is an independent virtual economy, supported by irreplaceable tokens (NFTs) and digital currencies.
Some of the best known examples today that could lead the future metaverse are Facebook's Meta, Microsoft's Microsoft Mesh Platform, and concerts on Epic Games platforms by the likes of Ariana Grande and Travis Scott.
What is the value of these lands?
In a decentralized metaverse like Decentraland, land is limited. The price of that land is going up.
"Why do you need land?" Probably a question that comes up a lot. If you want to make a game, organize an event or run a business, you need access to the metaverse.
It was predicted early on that some really talented people, entrepreneurs, programmers and artists would develop some fantastic new meta-universe ideas. In this regard, organizations like Terrazero help users buy the land they need.
How does this pledged loan work and who owns the virtual land?
According to Terrazero CEO Dan Reitzik, this is more of a loan than a pledge, even if it is for the purchase of land.
The criteria Terrazero set was that, first, they would see the people behind the company or idea to make sure those people were actively building something that would attract more users in the Metaverse.
The client must then submit a business plan to the company to understand that they will be able to repay the loan over time. If it seems feasible, it will purchase the land on their behalf.
The deed was NFT. The company kept it in cold storage until the loan was paid off. On the other hand, the developers are granted land rights that allow them to build whatever they want. If the customer does not pay, the company uses it as a pledge.
TerraZero's demand has been so high from the start that it has needed to underwrite these loans or pledge them, and it has no plans to self-finance them indefinitely. However, these details are still being worked out.
Three years ago, when all the programmers got together to build this decentralized meta-universe, many of them and their advisors owned 10, 15 or 20 plots of land. Over the past few years, these parcels have changed hands many times.
When TerraZero purchases land, it does so from a third party. Decentraland does not sell it to companies. Decentraland operates on something called DA, a "decentralized autonomous" organization.
There is no CEO, no company that declares, "This is what we do in the world." It's really up to the community to decide.
How do I buy land in Decentraland?
Land in Decentraland can be purchased using the fully decentralized MANA cryptocurrency. MANA is used for all transactions in this virtual world.
Transactions take place on the Marketplace, a one-stop store for land, real estate, incarnations and other items needed to build a world. The ethereum blockchain is used to track land ownership and users must keep their MANA tokens in their ethereum wallets. Designers can create their worlds on the platform using animations and interactions.
Now that ethereum smart contracts have emerged, they can be divided into three layers. The consensus layer tracks who has ownership of the land purchase.
The content layer manages reviews to distribute and present content such as audio, video and voice chat. Finally, in decentralization, all peer-to-peer connections, such as social interactions, are done through the real-time layer.
The Decentraland team also created an NFT marketplace and a drag-and-drop editor for users outside the play area to create settings. The marketplace allows users to manage and trade MANA-denominated land tokens.
Owners can also use the marketplace to buy, sell and trade reviews and other in-game items, such as wearables and unique names. It is worth noting that all transactions are resolved between Ethernet wallets and are therefore verified and recorded by the Ethernet network on the Ethernet blockchain.
Owners can use Decentraland's building tools to create unique experiences within their plots. Developers can use its editing tools to access custom libraries and payment implementations to create interactive scenes.
Internet users are expected to spend 52% of their time online, and the metaverse is sure to take up a large portion of their time online.
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