Trust Square Lecture Series - Economics of Decentralized Virtual Properties

 

Decentraland is a virtual city. It is based on the Ethereum Blockchain and imple- mented through the use of smart contracts. The smart contracts create an entirely virtual space in which people can buy and sell individual parcels of land. These parcels exist on the Blockchain and are completely decentralized, in the sense, that no central authority can decide to shut down the project or redistribute land ownership. The land can be used in a game-like virtual environment and monetized through the sale of services and digital goods or the placement of commercials on the property.

In this study we analyze the economics of decentraland. We extract information from the decentraland smart contracts and construct a new data set that includes prices paid for the parcels as well as many interesting characteristics of the property. We then extend the data set and generate additional variables such as the proximity to specic landmarks or streets. Finally we use basic regression analysis to get insights into potential price drivers, e.g. the the distance to the next street or plaza.

The study uses an entirely new data set and serves as a first attempt to understand the valuation of virtual property. In particular, we are interested whether the main price drivers in the physical domain also apply to a virtual realm. Inversely, conclu-sions gained from an analysis of the virtual world may lead to interesting insights for our pricing models of physical property.

About Prof. Dr. Fabian Schär

Prof. Dr. Fabian Schär is Professor for Distributed Ledger Technology/Fintech at the Faculty of Business and Economics. In addition, he is the Managing Director of the Center for Innovative Financeat the University of Basel and board member of the "Swiss Blockchain Federation" (Bundesrats Taskforce). His research focus is on interdisciplinary analyses of Smart Contracts, asset tokenization and Blockchain applications. He has a PhD in Cryptoassets and Blockchain Technology and co-authored several publications including the bestselling book "Bitcoin, Blockchain and Cryptoassets" and several scientific articles, some of them published in the prestigious Federal Reserve Bank of St. Louis Review. He is the organizer of the "Blockchain Symposium", the "Blockchain Challenge", member of the organizing committee of a conference with the Swiss National Bank and co-initiator of a project to secure academic credentials on a Blockchain. In addition, he is a board member of Crypto Fund AG, the first FINMA regulated crypto asset manager, an advisor of Vision& and Smart Containers, teaches at various universities and at Deutsche Börse and is an invited speaker at numerous conferences, including the G20 Global Financial Stability Conference. Prior to that, he worked as a consultant in various positions at banks and bank-related companies.

 

Bullets

  • Professor for Distributed Ledger Technologies (Blockchain) and Fintech at the University of Basel.
  • Managing Director of the Center for Innovative Finance, University of Basel.
  • (Co-)Author of several publications, including two articles in the Federal Reserve Bank of St. Louis Review and the best-selling book “Bitcoin, Blockchain and Cryptoassets”.
  • Board Member and Advisor of several Blockchain projects and speaker at prestigious conferences, including the G20 Global Financial Stability Conference.

 

Trust Square is proud to launch together with our academic partners the Trust Square Lecture Series and connect practitioners with cutting edge research in the fields of decentralization, cryptoeconomics, mechanism design, IoT and many more.

Each month we invite a research to present his/her findings at Trust Square during an in-depth presentation.

We are proud to present in September Prof. Dr. Fabian Schär of University of Basel

 

Timetable

  • 18:00 Doors open
  • 18:30 Presentation
  • 19:30 Apéro

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