How to make money with your OVRLands: The OVR Monopoly problem
OVR has a monopoly problem. Fortunately, there are also solutions: This article will present what the problem is and solutions to solve it, explaining the best way to make income with your OVRLands.
1) The basics
OVR.ai is an Augmented Reality crypto project. An Italy-based startup covered the entire world with 300m² hexagons called “OVRLands”, and selling them to the first buyer. They also have an app that allows for the visualization of this digital content. Essentially, OVR is a pre-sale of digital real estate of a future platform. You can think of it as a geo-localized internet: the content is pinned to a specific location in space.
This however means that OVR needs massive adoption for the lands to be valuable in the long-run, because people won't see the content if they don't go on the app. The land will have as much value has the number of eyes on it.
The usage will naturally grow with the development of Augmented Reality. Once Meta and Apple launch their AR Glasses, OVR will be an app on their platform. OVR might even launch their own glasses of they are very successful.
However, there will be fierce competition: Niantic is already building its AR Metaverse, and many other will also.
Many factors will determine the winner: the platform technical quality, intensity of marketing push, the content quality etc. And unless the space makes big shifts in terms of interoperability (more on that in a later article), this will be a winner-takes-all situation.
2) The Monopoly problem
One of the main use-cases of AR is retail: stores using the app to display augmented versions of their stores. This also works with any location-dependent business (think amusement parks, hotels, airports, festivals etc.).
The OVRLand assignation works as follow: the land are sold for cheap, effectively in a first-comes-first-served basis.
Problem 1: Rent-sharks
The OVR community, after buying more than 500 000 lands, is now starting the process of finding its first real-world use-cases:
For retail, this mean going to store owners and saying "hey, if you want to display stuff in AR you can rent my land".
The problem is that the OVR Landlords are pitching the stores to put themselves on the losing-end of a Monopoly situation. The owner is the only person that has the good they want on the platform, because they have no use for any of the hexes that are not on their location. Nothing prevents the owner from 10X'ing the rent overnight.
No sane retail business will accept this situation, and will not be onboarded to the platform at all. With no retail onboard, the project never gets traction, and the retail OVRLand prices go to zero: Everybody loses.
We need to find a way to incentivize making attractive propositions to retail.
Problem 2: Hex Campers
But what about selling the hex to retail? We have a marketplace to buy and sell OVRLands!
It helps yes, but we still have a massive problem: Hex Campers. Nothing prevents someone from asking ridiculous buying prices, because they have a monopoly on the desirable asset. The same way a home owner can block an infrastructure project (like building an highway) and cost millions of dollars and months to the project. Imagine how would you feel as a company if a landlords tells you you cannot do your AR project because they think they can make 10x profit if they make you wait 2 more years.. HODLing is great for liquid assets, but it's a nightmare for monopoly assets.
It's like the board game "Monopoly": if you want to build houses, you need to own all the lands of the same color. At some point, the lands are exchanged between the players, to enable the building phase of the game.
To make our ecosystem work, we need to shuffle the lands so that they fall in the hand of the people that are going to create value on them. Otherwise, no creation will happen at all.
PS: I'm taking about rent-sharks and hex-campers, but this is a problem that we will have in the future. I don't think that any member of the current OVR community fall in either category. You rule, much love ❤️ Also, hate the game, not the players.
3) Solutions
Maybe we can ask everyone to not be too greedy?
I mean yes, but counting on people's good behavior in a system where their are incentivized to be greedy is a recipe for failure. What we need instead is to change the incentive structure to encourage constructive behavior.
Solution 1 — Create a big pie: Profit-sharing
Most owners think that rent is how they will benefit from their OVRLands. As we have seen, this is a terrible solution for retail because of the monopoly problem.
The better way to do it is by profit-sharing: take a share of the profit made on the land.
Examples of constructive profit-sharing:
- retail stores will want to have virtual shops. If there is a conversion (someone buys an article) from your hex, you get a %.
- amusement park / art museum makes an AR experience, with an entry fee. You get a % of all entries.
- NFT gallery makes an AR exposition (like the 2022 Metaverse Exposition at the Eiffel Tower, Paris). They organize NFT live auctions and you get a share for each sale on you land.
Concretely the best way to do that is to enforce it with a smart-contract:
if you are among the first you will need a developer to create a specific one for you. Down the road, platforms like Dreamkollab.com will allow to easily generate contracts for you. The smart-contract will also be the company's guarantee, because the % can be fixed in time by it.
The downside is that real money needs to be made on your Hex. But hey, this is where you will see the quality of your investing vision.
Solution 2 — Shuffle the cards: Land pools
To help making sure that lands get in the hands of the right owners, we need to incentivize the creation of complete land collections and their sale at a reasonable price.
There are several potential solutions for that, unfortunately most of them come with potential problems:
- Creating land pools from multiple landlords, that a buyer can accept all at once:this solves the "I have the last land to complete the batch, giving me enormous leverage.
- Make OVR punish bad behavior, for example by enforcing automatic rental for lands that are part of a land pool.
- making land pools which sale triggers only if the set is complete:this would create insane community pressure against bad actors
If you have other potential solutions, please share them in the comments, I will add them to the list!
And that's how you get money from your retail lands: help creating wealth, and be part of the constructive selling ecosystems.
Please feel free to share your thoughts and reactions, sharing is the way to grow the community forward!
Happy investing,
