The metaverse’s first official open world is not doing the numbers it should at this point.
But there are bull cases too.
To Be Clear…
I still own land in Decentraland, and I really want it to succeed.
There has been a lot of work put into it, and the community, even though it’s smaller than people think it is IMO, deserves better.
But Generation One usually dies out pretty fast. LiveJournal, AOL.com, CalecoVision, Axie Infinity, etc.
We should be grateful for these projects, because without them, we wouldn’t have the technology we have now.
“But the new technology is politically motivated and oppressive and….”
Go use AOL.com then. I hope your CD drive is working properly.
But despite the behind-the-curve tech, and the fact that not enough people are using it, Decentraland still holds on, and still manages to get huge sponsorship dollars funneled into it.
So what does the future hold?
38 Users a Day??
This blog post was in the queue for awhile now, but got pushed to the front thanks to this article from CoinDesk on Monday.
If you’re too lazy to read it (and let’s be honest…), I will post the highlights.
- She’s using DappRadar as her source.
- The article defines “Active Users” as somebody who goes into the respective metaverse and makes a transaction with the native token (so in this case, MANA).
- The article did mention how this metric is disputed by Decentraland, and we’ll get more into that later.
Okay, so how does a platform with only 38 people a day making transactions on its metaverse survive?
Decentraland as of post time has a 1.1 Billion dollar market cap! With 38 daily active users!!
Let’s dig a bit deeper.
They’re Here, Just Not Spending
In the same article, the Creative Director for Decentraland disputed DappRadar’s method of measuring users, saying that the true definition of a user is somebody who has logged on, and actually made a movement away from the spot they were standing on when they logged on.
So in a similar period of time, Decentraland actually had 6999 daily users, not 38.
“But almost none of them are spending money VP”. Wait on that.
The stronger argument is that 6999 users are present in their metaverse every single day, which is actually a big deal for….
How does Decentraland make any money if nobody is spending?
There have been scores of large companies coming into Decentraland to become the first in their space to advertise in the next generation of the digital space.
Do these firms have any clue what they’re doing at this point? No.
Does it matter? No.
Even securing a gigantic swath of land in the metaverse costs maybe .3% of a large companies overall advertising budget.
It’s a rounding error.
Why not stake a claim there? If you’re wrong, find out who’s right and just go there.
This is the next internet we’re talking about here. Getting there first is worth any marginal risk that may exist.
As of post time, these are some of the companies you will find with presences in Decentraland…
Angel’s Envy (Bacardi)
Well hell, Decenraland must be the place to be, no? This is about a half trillion dollars’ worth of companies right there.
Again, they have nothing to lose. They get to be seen as cutting edge, and if this move to Decentraland doesn’t pay off (99.99% chance), it’s no water off of their backs.
Now you may be thinking, “Why did they choose Decentraland?”
Because where else were they going to go? CryptoVoxels? Those are the only two choices right now in terms or pure open-world metaverses.
There was literally no other option.
Other Decentraland Revenue
On the heels of the CoinDesk article, Decentraland put out this tweet.
The metaverse may still be a new place, but it certainly is not a lonely one. ❤️
Defining 'Active Users' in the metaverse can be tricky and varied approaches can result in the spread of misinformation.
Let's dive into what this means👇
— Decentraland (@decentraland) October 11, 2022
I’ll go over the main points of the thread.
- Reiterated the point about active users compared to the way DappRadar scores it
- Said how they failed to mention all the Decentraland stuff bought from people who weren’t on their metaverse at the time
- Said how they don’t measure their success by the amount of active users (LOL, good thing)
They posted this stat (“MAU” is Monthly Active Users)
Let's have a look at some of September's data:
1,074 Users interacting with smart contracts
1,732 minted Emotes
6,315 sold Wearables
300 Creators received royalties
161 created Community Events
148 DAO Proposals
— Decentraland (@decentraland) October 7, 2022
Now that is a bit more refreshing, no?
It does show active desire from a larger community, and real money flowing into the system.
This is reason #148 to not just be a headline reader.
The media knows you’re nothing but a headline reader.
Despite the better-than-most-of-us-thought numbers, I don’t think Decentraland is winning.
Consider this. Their main competition for Gen 1 metaverse is Sandbox, no?
According to DappRadar’s same metric (which is useful here), the largest daily active users for Decentraland was 675. For Sandbox, it was 4503. That’s over 7.5x the difference.
Monthly Google searches for Sandbox total around 1 million. You can minus about 20,000 people who are looking for the movie, or an actual sandbox.
Monthly searches for Decentraland? 10,000!
100x more search volume for Sandbox. 100 times!!
And this is just for Generation 1! If I just look at the Cardano blockchain and nowhere else, I can already see heavy competition in places like Pavia, Cornucopius, and Terra Virtua (cross-chain), that already look and feel so much nicer than Decentraland.
What will happen to Decentraland’s already paltry numbers once Generation 2 comes along?
Despite what’s going on off of the platform, on the platform itself, if you go there now, you can go the board and see where the most popular places are.
In first place is Ice Poker, which gets about 200-500 players, and you have to have a special NFT to play.
In second place is WonderMine with a hundred or so people, and it’s super boring.
Not much of anything.
This is your winner? This is “The Metaverse”??
Even if the numbers they showed in the tweet were 5x what they were, I would not consider this a success.
The Metaverse is for the world. A world of 8+ billion people.
The winner is going to take a good chunk of that.
In order to win in this space, you’re going to need millions coming into your space on a daily basis.
And yes, you will need more than 38 people a day spending your native token inside your virtual world. You will need to up that by a factor of about 5000.
And this will need to happen, despite much better competition coming your way.
You will need to become a cultural phenomenon.
…..and this aint it.
Decentraland has 90,000 plots of land. And they’re getting less than 1000 people a day.
Most land is empty, but the ones that do have structures were built years ago, and no longer function or have any relevance now that art NFTs aren’t popular anymore.
The revenue does not match the market cap. At all.
This is not winning.
This is failing.
Thanks for being the pioneer, Decentraland. Somebody had to.
But I’m afraid you’ve already lost.