Decentraland regularly makes international headlines selling expensive virtual real estate. As a result, the metaverse often seems inaccessible to those who want to try out this emerging technology. But how accessible is Decentraland really? And is the platform with its own cryptocurrency future-proof for investors? AM Business asked Iara Dias, producer of Decentraland.
Decentraland is a metaverse where 30,000 users come every day to explore a digital world that is in a constant state of transformation. It is an alternative virtual reality where the main banks in the United States have already opened branches and users say yes. It is also the metaverse where some of the world’s biggest fashion brands, such as Dolce & Gabbana and Hugo Boss, recently hosted Metaverse Fashion Week.
But Decentraland is best known for selling virtual land. Genesis City, the main living space of Decentraland, consists of 90,000 lots that can be traded between users. The price of the most coveted of these virtual plots is usually not small.
In January, a popular piece of land called the Fashion Street Estate sold for $3.5 million worth of MANA coins, the cryptocurrency used to do business in this metaverse. The rush to buy virtual land in Decentraland is somewhat reminiscent of the hype surrounding digital real estate in the video game ‘Second Life’ nearly twenty years ago. Generous sums were also paid there to get the best places in the virtual world.
The difference with ‘Second Life’ is that Decentraland parcels are actually NFTs on the blockchain and are known as LAND assets. MANA, on the other hand, is a cryptocurrency that was created on the Ethereum system and can also be used through the Polygon blockchain. The Decentraland Coin is the 37th largest cryptocurrency by market cap at the time of writing and is worth around $1.85 each.
Virtual festival with 50,000 guests
But what can actually be done within the Decentraland metaverse? Iara Dias, who is responsible for organizing music events at Decentraland, explains that an entire piece of land, Festival Land, is dedicated to cultural experiences in the metaverse.
“Last year, for example, we organized the Metaverse Fashion Week, the first of its kind. 80 artists came to perform at Festival Land and 50,000 users were present virtually. The next edition will take place there this year”, explains Dias.
Also in other parts of Decentraland there would be continuous festivals organized by the company behind the metaverse and the users themselves. “You can create an event and have it run completely in 2D, for example by playing a video. But you can also place an avatar provided with motion capture. You do what you want,” explains Dias.
DAO: decentralized autonomous body
Dias, a Brazilian researcher and musician based in Finland, was hired by the Decentraland Foundation to bring events to users of the metaverse. That organization was authorized by Decentraland’s DAO (decentralized autonomous organization) to produce content for the digital platform. Decentraland itself is thus a fully decentralized company run by stakeholder voting processes. The idea is that the Decentraland community can prosper independently of governments and companies and create valuable digital assets, Dias stresses.
The Decentraland Foundation is funded primarily through the sale of virtual lots; the aforementioned LAND NFTs. The transaction costs of the MANA coins on the blockchain also contribute in part to the treasury.
“However, MANA’s transaction costs are minimal and only cover minor matters. This organization is a non-profit organization, so we also do not like to confiscate a large part of the transactions. We only charge 1.7 to 2.5 percent of the transaction fee. Various Web2 models (read: non-decentralized companies developing a metaverse, ed.) regularly charge a fee that can amount to 50 percent of the content creators’ billing,” explains Dias.
But how accessible is Decentraland really?
The fact that Decentraland only has 90,000 very expensive parcels that have already been divided among early risers, may disappoint many newcomers. If you want to earn your own place within the metaverse, you’re going to have to work hard or be creative. “You don’t need to own virtual real estate to participate in this virtual reality,” explains Dias. He then compares Decentraland to a city, where all real estate is already in private hands. There you can still find a job or sell products to earn money and eventually get a cut. “In Decentraland you can make and sell NFT accessories or earn MANA in other ways. The barrier to entry for this is very low because the game is not very complicated graphically,” says Dias.
Apparently you don’t need anything outside of a regular computer to jump into Decentraland. Through the “guest mode”, he can enter the metaverse through the Decentraland website after a few clicks, having created his own. avatar created. “But it is recommended to create a profile and connect it to a crypto wallet if you want to stay longer. This way you can keep track of the assets you collect,” says Dias.
In fact, within a few minutes of browsing the Decentraland website, we find ourselves in the middle of a futuristic-looking virtual city. And although Genesis City reminded us a bit of a ghost town (admittedly it was quite dark in Decentraland during a Belgian afternoon), we soon found a “trade center” nearby where some people were looking at the price of local virtual real estate and other crypto assets.
Will Decentraland survive the VR headset and the battle for Web3?
We also asked Dias about the possibility of making Decentraland available for VR headsets. According to Meta founder Mark Zuckerberg, the future of the metaverse lies in experiencing this world through virtual reality goggles. Currently, Decentraland can only be accessed on PC through a web browser.
Dias believes that DAO’s decentralized operation is flexible and fast enough to bring Decentraland to VR headsets if the community so desires. “Through grants within the DAO, the community could fund virtual reality and augmented reality projects, if the community votes,” he reads.
It is also not certain that Ethereum, the system of the second largest crypto currency in the world, Ether, will always remain the most dominant blockchain for Web3 applications. Emerging systems like Solana and Avalanche have shown in recent months that there are cracks in Ethereum’s performance and reputation. For example, Ethereum’s infamous ‘gas fee’, or transaction fee, would be a problem for crypto investors.
“Ethereum is currently catching up to improve the system. Perhaps we will indeed see the rise of other blockchains that do things better. After all, about 5 years ago, Ethereum wasn’t even discussed much and everything revolved around Bitcoin,” says Dias.
Then Dias points again to the secret sauce of Decentraland; the fact that the company is a DAO. “In theory, Decentraland can always switch to another blockchain, if the DAO decides to do so. Although certain assets will remain anchored in Ethereum forever.”
On April 29, Iara Dias will visit the Royal Library in Brussels to discuss the potential of decentralized technology with Belgian entrepreneurs and other stakeholders at the BitBrussels Web3 conference.