Digital land is selling for millions as people scramble to snatch up virtual real estate in the metaverse—and it could be a multitrillion-dollar opportunity

The metaverse refers to a handful of platforms⁠—including the Sandbox, Decentraland, Mirandus, and Axie Infinity⁠—that are creating an interactive version of the internet where users can play games, explore virtual worlds, and even do business. Facebook popularized the term when it rebranded as “Meta,” and signaled its intention to create an immersive virtual world where people can “get together with friends and family, work, learn, play, shop, create…” 

Platforms have provided a market for digital land by giving users and investors the opportunity to buy land through crypto and own it as NFTs. And as more investors pay attention to the business possibilities in people spending more and more time in virtual worlds, a digital land grab has accelerated on those platforms over the past year. The crypto asset management firm Grayscale said the metaverse could eventually become a $1 trillion per year revenue opportunity. Earlier this week, Epic Games CEO Tim Sweeney said it could be a multitrillion-dollar opportunity. And when asked if the metaverse could become a multitrillion-dollar market, investor Cathie Wood said she thought it could.

Republic Realm, a company that buys digital real estate and then develops it into retail or virtual residential space that it can sell or rent, said it bought a $4.3 million plot in the Sandbox on Tuesday, according to the Wall Street Journal. The purchase was the biggest virtual real estate sale ever, and surpassed a record set only last week when crypto investor Tokens.com bought a plot in Decentraland for about $2.4 million.

Sébastien Borget, cofounder and chief operating officer of the Sandbox, told Fortune that real estate owners in the NFT-enabled gaming world jumped from 12,000 to 16,000 landowners in November alone. This week, the Sandbox opened game play on its platform to a select number of users in an alpha release, which Borget said helped push that number higher. As of Thursday afternoon, 65% of the 166,464 total plots in the Sandbox have been sold since the company first began public sales in February, and some of that remaining 35% is being held in reserve until 2022, according to Borget.

“Building real estate in virtual worlds could be profitable, faster than in the physical world because you’re no longer bound by a lot of restrictions,” Borget said of the potential appeal to investors.

The value of virtual real estate, like that of physical real estate, is often centered on location within the virtual world of a specific platform. In Decentraland, plots are valued based on the “districts” in which they’re located. These include districts for shopping, fashion, and gambling, among others. In the Sandbox, users aim to buy property near plots that will contain interesting experiences, such as games, digital concerts, or hangout spaces, which are built by individual users or companies such as Adidas, which recently purchased a plot. Investors or users usually buy plots with the native cryptocurrency of the platform, according to Borget.

As investors and individuals continue to experiment with metaverse platforms, other businesses such as virtual real estate agencies, developers, and architects will likely start popping up, said Borget.

Because of NFT technology, investors own the rights to the property they buy, not the platform. This means they can develop their land with buildings or attractions and sell it for a profit or rent out the land or spaces in any building they construct. They can also build experiences like concerts or shows on the space, and charge tickets for entry.

But like investing in physical real estate, buying land in these digital worlds is risky. The price of a plot in a metaverse platform could drop to zero if a game is abandoned by users. 

Speculation on digital property is driving up the price as people reselling land try to profit. But some projects, such as the soon-to-be-released fantasy role-playing game Mirandus by Gala Games, are trying to distance themselves from that aspect of digital land.

Over the past year, Mirandus sold most of its digital land even though the game has not been released yet. Gala Games president of blockchain Jason Brink said although it cannot stop people from reselling Mirandus parcels on third-party platforms or forming investment companies to buy land, it is trying to emphasize that Mirandus is more of a game than a vehicle for real estate investing.

The only two parcels left in Mirandus are two citadels, the largest pieces of property in the game. Brink told Fortune that because the citadels give the owners more power in the game than other landowners they will only be sold to people the company believes are willing to help the game develop and not use the NFT as an investment. At the moment, Brink said, Mirandus is considering offers of more than $25 million for the two remaining properties.

“What we don’t want is just for someone to buy an NFT just to buy an NFT, you know, these are not for speculative investment,” said Brink. “These are because we’re making an amazing game, and we want you to be part of it.”

Landowners can make profits by renting their land or selling items crafted on the land, but the properties in Mirandus are not meant to be a passive investment.

“We can’t tell people what to do, but we make it clear that property in Mirandus is for players,” Brink said. “Without playing, your property does nothing.”