Everyone is talking about Shiba Inu (CRYPTO:SHIB) and its move into the metaverse with Shibarium and Shiba Lands. But what about a publicly traded company that is already amassing attractive real estate in the metaverse in addition to accruing assets like Solana (SOL 0.39%), Ethereum (ETH 0.99%), and Polkadot (DOT 1.39%), and even investing in crypto gaming and non-fungible tokens (NFTs) I'm talking about Canada's Tokens.com Corp. (SMUR.F 14.37%).
What is Tokens.com and what is its strategy?
While decentralized finance (DeFi), NFTs, and staking may sound complex to investors who are not involved in crypto, Tokens' strategy is actually very simple. The company identifies trends in cryptocurrency, such as staking or the metaverse; purchases digital assets that it thinks can increase in value as a result of these trends; and focuses on generating revenue from these assets. Tokens.com buys proof-of-stake cryptocurrencies like Polkadot and Solana and earns more of these tokens by staking them. The company even owns and stakes Shiba Inu. Tokens.com boasts a well-diversified portfolio of crypto assets. For example, on Nov. 30, the company announced the purchase of 10,000 SOL, 22,500 LUNA (LUNC 0.87%), and 3,022,453 ANKR (ANKR 1.71%)tokens.
Image source: Getty Images.
Image source: Getty Images.
Metaverse land grab
Similarly, the company buys land (often called parcels) in the metaverse on projects like Decentraland and seeks to earn rental income from these parcels. JPMorgan recently projected that the metaverse is a $1 trillion market, and Tokens.com is staking its claim to this vast opportunity early. For example, Tokens.com is the majority owner of Metaverse Group, which made headlines when it made what is reportedly the largest metaverse acquisition thus far -- a 116 parcel purchase on Fashion Street in Decentraland (MANA 2.08%). The company states that its plan is to host major fashion events and turn this parcel into the Fifth Avenue of the metaverse. While this may sound like hyperbole, things are already coming to fruition as its land will be the host to Decentraland's Fashion Week in March, which will attract advertising and sponsorship opportunities. The company owns a diversified portfolio with parcels in six different metaverses, including 227 in Decentraland and 65 in The Sandbox (SAND 3.47%).
Outside of the metaverse, the company is strategically investing in NFTs and play-to-earn (P2E) crypto gaming through its wholly owned subsidiary, Hulk Labs. In early February, Hulk Labs bought Punk #5067, part of Cryptopunks. Along with Bored Ape Yacht Club, this is one of the most prominent NFT projects to date.
Is Tokens.com a buy?
Tokens.com's future plans include listing on the Nasdaq and paying a dividend. If this happens, I would expect the share price to be significantly higher. It bears mentioning that this is a speculative and risky investment. It features all of the risks that a small-cap stock trading on an over-the-counter exchange comes with, such as lower standards for reporting and lower trading volumes. It's also significantly exposed to the price of the volatile crypto assets it holds.
However, I like the company's vision of acquiring an interesting portfolio of metaverse real estate and of diversified cryptocurrencies it invests in and earns interest on. I also appreciate the company's down-to-earth strategy of investing in assets that it believes will increase in value and generate revenue. Overall, I view Tokens.com as a great risk/reward opportunity and an advantageous way for equity investors to gain exposure to DeFi, NFTs, and the metaverse -- all in one place.