Is Metaverse LAND a Good Investment? It Depends on Your Unit of Account!

Voraprapa Nakavachara and Kanis Saengchote

No 172, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: The Sandbox metaverse LAND non-fungible token (NFT) prices increased by than 300 times (in USD) between December 2019 and January 2022, but when measured in its native utility token (SAND), the increase is only 3 times. Depending on how prices are denominated, investment returns and effective transaction prices vary. We analyze more than 71,000 transactions and find that users are willing to pay 3–4% more when transactions are settled in SAND, and 30% less when settled in wETH (a smart contract version of ETH) when compared to ETH, so unit of account matters. Our results contribute to the discussions of blockchain-based, virtual economy management and the digitalization of money (Brunnermeier et al., 2019).

Keywords: Metaverse; Real Estate Price Index; NFT; Unit of Account; Impossible Trinity (search for similar items in EconPapers)
JEL-codes: F3 G00 R30 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2022-02
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Citations: View citations in EconPapers (5)

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