Parcel Challenges OpenSea in Bid to Rule Virtual Property in the Metaverse

Parcel is challenging NFT leader OpenSea by helping users buy virtual properties in the metaverse.

By: Brady Dale Loading...

Parcel Challenges OpenSea in Bid to Rule Virtual Property in the Metaverse

In the future, we will all be connected to the metaverse constantly just as we are all connected to the internet now.

At least, that’s the thesis of Parcel, a “Zillow for the metaverse” that aims to bring together all the information virtual landowners might need to know about their properties. “The metaverse is the evolution of the internet,” Noah Gaynor, its CEO, told The Defiant in an interview.

Parcel is a New York-based startup with seed backing from Framework Ventures, Distributed Global, and Sfermion. Its long term vision is being the place virtual real estate moguls can go to get all the services they might need to manage their holdings. It might be thought of as a sort of directory of the projects people are building in the organic metaverse (as opposed to the corporate bowdlerized one coming out of Menlo Park soon).

Competing with OpenSea

Right now, Parcel is getting into the resale business. “We are launching a marketplace,” Gaynor said. “We’ll be competing with OpenSea directly. Grand vision: we want to be the niche marketplace for virtual land users.”

The marketplace on Parcel’s website should start listing offerings Parcel itself originated this week. The site already aggregates listings from other marketplaces and uses its tools to help buyers and speculators decide if they are really interested.

Virtual land is a kind of non-fungible token (NFT) that designates some kind of property in a virtual world, such as Decentraland or Cryptovoxels. As an NFT, the main way to buy and sell these real estate NFTs is on the leading marketplace for unique tokens, OpenSea. Just as it has been hard for niche markets in collectibles or outdoor gear to compete with Ebay, it’s likely to be tough to compete with OpenSea, which has seen more than $10B in volume on Ethereum since August.

Niche marketplaces can create user experiences crafted specifically for the goods they specialize in, and that’s helpful, but big marketplaces have the main thing sellers want: buyers.

Big Draw for Buyers

Gaynor argued that Parcel’s virtual land focused marketplace will have three tangible features that should help make it more attractive to serious buyers in this market. First, it’s designed for virtual real estate, so it will be easy to see land on a map with a useful data set about its features.

Second, Parcel has no fees on sales in contrast to OpenSea, which charges 2.5%. Gaynor is betting that level of savings will be a big draw for buyers. ;

Lastly, Parcel built a customized smart contract for sales that Gaynor says beats OpenSea on gas efficiency, saving buyers slightly more.

Parcel’s not the first to go after OpenSea this year. Infinity announced it would challenge the market leader by sharing its revenue with users through a token.

Similarly, the lack of fees raises the question: how is Parcel going to make money? “We can’t talk about a token or anything like that, but hopefully one day we will reward our early users,” Gaynor said.

“A really big piece of what OpenSea is not offering is this really rich data set. Maps. User experience features. There’s no good place to see virtual real estate data and trends,” Gaynor said.

For example, a user who already has land can plug in their own wallet and see where all their land is on a map relative to the new parcel they are considering. Sfermion’s Andrew Steinwold told The Defiant over email that Parcel is going a long way toward enhancing the legibility of the metaverse, which will onboard more people and get it to the scale it needs to fulfill its potential.

Virtual Buildings

“The most important factor about blockchain-based virtual worlds is that they are essentially user-owned and governed. Users are buying land and creating content in these realms and have direct input on the value increase (or decrease) of the overall platform,” Steinwold said.

Long term, Parcel will also help landowners with other problems, such as finding service providers for their land, advice on developing it and even renting it out to others. “There are going to be many reasons to come to Parcel other than buying and selling a parcel of land,” Gaynor said.

Right now, for example, he said that lots of landholders are looking for architects to design virtual buildings for their properties. Parcel also intends to help landowners make these kinds of connections, with the goal of fixing the stickiness of users.

Useful NFTs

Gaynor is the first to admit that it’s very early in virtual land. “To be honest these things are not fully bustling economies yet,” Gaynor said. The activities in the metaverse are “very experimental” so far, not that lucrative. It’s like getting into Ethereum in 2017 when a lot of people were raising money to do things on Ethereum, but no one had really done anything yet.

Still, what excites Gaynor and the Parcel team is the idea that these NFTs are the start of something. Gaynor likes to use the term “utility NFT,” because people can build on parcels and do things on parcels. “It’s all about utility. That’s the thing that gets us the most excited. These are useful NFTs, which to me is a game changer, versus — you know — a Bored Ape,” he said.