If you haven’t heard of the metaverse by now, you probably are living under a proverbial rock. However, how we can and should define the metaverse is far less ubiquitous than the term itself. We mostly understand that it involves virtual reality (VR) experiences, augmented reality (AR), artificial intelligence (AI), and cryptocurrencies.

What’s even less clear is what it means for something to have value in the metaverse. At its core, the metaverse is a “3D immersive environment” and that’s where we should start, said EY Global Chief Innovation Officer Jeff Wong.

“There’s an intersection, a 3D-rendered world that exists where you buy NFTs, you use cryptocurrency to exchange and pay within that environment,” he told Yahoo Finance. “But, you can own cryptocurrency without being in a 3D environment and you can also be in a game, exchanging goods, in a format that’s entirely independent of Web3."

Web3 at its core is a vision for a decentralized, blockchain-based web. Though it's easy to conflate the two, it's an understandable mistake – the intersection between them is substantial and significant, Wong added.

So, what’s valuable in the metaverse? That’s still in flux, but there are some things that we do know, including that scarcity and friction will likely generate value.

“The evolution that we’re seeing is that people are creating these metaverse spaces and selling digital land in those spaces,” said Wong. “People are also renting out that land, which in turn gives owners access to goods and services that then tie to transaction fees, that enable you to buy things inside of that metaverse … There’s relatively large value that’s being created by selling this digital land. And, if you’re thinking that you can create an unlimited amount of that land, you would be theoretically correct. However, metaverses are limiting land creation in their environments, creating scarcity.”

Metaverse real estate recently made headlines when billionaire Mark Cuban hosed the concept this past week. However, metaverse real estate isn't directed at Cuban's generation – it’s a much younger consumer, according Janine Yorio, CEO of Everyrealm, a metaverse real estate company.