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Does unit of account affect willingness to pay? Evidence from metaverse LAND transactions✰

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  • Nakavachara, Voraprapa
  • Saengchote, Kanis

Abstract

LAND is a non-fungible token (NFT) representing virtual real estate ownership in The Sandbox metaverse, a digital world built on the Ethereum blockchain. The open nature of a blockchain-based metaverses like The Sandbox allows users to transact in multiple denominations/currencies. We analyze more than 71,000 transactions and find that when transactions are settled in The Sandbox's native utility token (SAND), users pay 3.4% more compared to ETH (in effective USD prices). There are also evidences that users pay less when transactions are settled in wETH and USD-pegged stablecoins (USDC). Thus, the cryptocurrency/token settlement choice (i.e., unit of account) matters for willingness to pay.

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  • Nakavachara, Voraprapa & Saengchote, Kanis, 2022. "Does unit of account affect willingness to pay? Evidence from metaverse LAND transactions✰," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003154
    DOI: 10.1016/j.frl.2022.103089
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    Cited by:

    1. Kanis Saengchote & Voraprapa Nakavachara & Yishuang Xu, 2023. "Capitalising the Network Externalities of New Land Supply in the Metaverse," PIER Discussion Papers 203, Puey Ungphakorn Institute for Economic Research.
    2. Kanis Saengchote & Voraprapa Nakavachara & Yishuang Xu, 2023. "Capitalising the Network Externalities of New Land Supply in the Metaverse," Papers 2303.17180, arXiv.org.
    3. Jaung, Wanggi, 2022. "Digital forest recreation in the metaverse: Opportunities and challenges," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    4. Ghosh, Indranil & Alfaro-Cortés, Esteban & Gámez, Matías & García, Noelia, 2023. "Do travel uncertainty and invasion rhetoric spur Metaverse financial asset? – Gauging the role of media influence," Finance Research Letters, Elsevier, vol. 51(C).
    5. Qiao, Xingzhi & Zhu, Huiming & Tang, Yiding & Peng, Cheng, 2023. "Time-frequency extreme risk spillover network of cryptocurrency coins, DeFi tokens and NFTs," Finance Research Letters, Elsevier, vol. 51(C).
    6. Kanis Saengchote, 2022. "Cryptocurrency bubbles, the wealth effect, and non-fungible token prices: Evidence from metaverse LAND," Papers 2209.04385, arXiv.org.
    7. Rami Alkhudary & Bertrand Belvaux & Nathalie Guibert, 2023. "Understanding non-fungible tokens (NFTs): insights on consumption practices and a research agenda," Marketing Letters, Springer, vol. 34(2), pages 321-336, June.

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