7 min read
This week, the Ethereum-powered virtual game world Decentraland threw open its doors with a $100,000 giveaway. At first glance, the idea doesn't seem that groundbreaking. A game world with simple blocky graphics, where users can interact with each other and build their own creations? It's practically Minecraft.
Look beyond this base concept though, and you'll soon see that Decentraland is a different beast entirely.
Founded in 2017 by Argentinian entrepreneurs Ari Meilich and Esteban Ordano, Decentraland is the world's first ever fully decentralized virtual world, mashing up elements of Second Life and the aforementioned Minecraft with cutting edge tech including virtual reality and blockchain.
The foundation of Decentraland is its cryptocurrency, MANA, which can be used to buy 10x10m plots of land (LAND). An ERC-20 token, MANA's blockchain hash numbers allow purchasers to claim indisputable proof of ownership over these virtual plots.
As a currency, MANA can also be used to interact with other users and the experiences they've created, as well as buying virtual cosmetics such as items and skins. The Decentraland ICO for the Ethereum-based MANA token initially raised $20.7 million and sold out within five minutes. Following this, a LAND auction saw 161 million MANA spent by users to buy virtual plots - around $8.8 million in today's value.
Landowners can use their purchased plot as an investment to sell on, or build their very own experiences. From giant party mansions to magical forests, the only limits are the creator's imagination, and space.
Rather than being held by the developers, each spent MANA token is burned, to ensure complete decentralization. As of Decentraland's official public launch on February 20th, no single agent has the power to modify the rules of the software, curate LAND content, modify the economics of MANA, upgrade LAND smart contracts, or prevent others from accessing the world.
Decentraland uses the MANA cryptocurrency (Image: Decentraland)
"Decentraland is a world that's truly decentralized," founder Ari Meilich told Decrypt. "That means that all of its infrastructure is run by the community, and no single company will have the power to modify the world or prevent others from accessing it in any way."
Ari MeilichNo single company will have the power to modify the world or prevent others from accessing it.
"To do this, we've set up a DAO, or Decentralized Autonomous Organization, to take over all governance decisions,” he added. “We will continue working on ensuring that what started out as an experiment for a community-run virtual world reaches the level of scale that would make us think we had a real impact."
The DAO facilitates the most important smart contracts that make up Decentraland, including the LAND Contract, the Estates Contract, Wearables, and the Marketplace. Through the DAO, players will be able to vote on policy updates, future LAND auctions, whitelisting of non-fungible token (NFT) contracts to be allowed inside the World, Builder and Marketplace, and more. Voting takes place on the Decentraland DAO’s governance interface.
The DAO itself is supported by the Security Advisory Board (SAB), which acts as the guarantor of contract security. The SAB has the power to fix bugs and, together with the community, can also co-create votes for the community to vote on.
The benefits of a DAO approach are clear. By ensuring that no single entity controls the world of Decentraland, power is distributed among its inhabitants. In a world where developer control and changes often lead to conflict with players and can even result in a drop in a user base, this foundational pillar of decentralization is extremely appealing, especially to those who hold the values of decentralized cryptocurrency close to their hearts. Players feel like they have a say in the future of the world they inhabit, which can foster fierce loyalty and passion.
Decentraland's DAO could lead to utopia—or anarchy (Image: Decentraland)
DAOs do, however, have a downside. By permanently handing control over to users, the Decentraland team is putting its faith in, well, human beings. Call us pessimistic, but we haven’t exactly got a great track record when it comes to playing nice with others.
You can barely go anywhere online these days without crossing paths with racists, griefers and more. From reddit’s troll-laden threads to toxic League of Legends team chats, the Internet is just as much a force for evil, as it is for good.
Unlike, say, a reddit moderator with the power to delete comments and ban users, though, Decentraland’s DAO makes the entire world lawless, and there’s no central authority to wield a banhammer.
We’re not saying that nefarious virtual organizations are going to spread across the land overnight, but it’s certainly a risk worth considering. Users can set filters to help ensure that they’re protected from certain types of content, but no filter is ever a 100% effective failsafe.
As with the Internet itself, openness and freedom comes at a price, and it’s up to each individual to ask themselves if they’re willing to pay it. The idea of an open game world without centralized governance can also lead to great things. Decentraland is just as—if not more—likely to lend itself to good. People could build educational institutions, create their own economies or even perhaps their own governments in-game.
“A lot of people are already making money by trading virtual goods, contracting as developers, artists, and many other forms of content creators, among many other virtual jobs,” Meilich said. “I certainly expect another two to three billion people to become gamers over the next five or so years, drastically boosting the current market size of $140 billion per year.”
Meilich himself has been working online for over a decade. “One of the great advantages is that you’re not limited by the size or shape of your local economy,” he said. “As virtual economies continue developing, I think a lot of people will take advantage of the fact that they can work from wherever they are, and transcend the limits that their offline community would otherwise impose.”
Decentraland is now officially live. So far, the only marketplace that has emerged is one devoted to LAND. Over $30 million of LAND has been purchased in primary sales, with over £18 million bought in the secondary market. Considering the fact that we’re talking about people buying virtual property in a newly launched game, it’s hard not to be impressed by these figures.
According to Meilich, “The long tail of players is probably unable to buy plots of LAND that sell for hundreds of dollars. Ultimately, I believe avatar accessories, such as clothes and weapons, will represent a larger share of the economy, because these items will be accessible to all players. And looking at how games like Roblox or Fortnite make money, with avatar skins, I think we will see the same for Decentraland.”
Brands interested in crypto-savvy users are already developing marketing and educational content for Decentraland. Some content creators too, view Decentraland as an opportunity to tap into a new form of communication.
It’s impossible to predict the future for anything, let alone a brand-new virtual world run and owned by its inhabitants. As things stand, though, Decentraland looks set to be an incredible experiment at worst, and a revolutionary new paradigm at best.
Stay tuned for our hands-on review, where we’ll be exploring the world of Decentraland and reporting directly from the (virtual) front lines.
Decrypt-a-cookie
This website or its third-party tools use cookies. Cookie policy By clicking the accept button, you agree to the use of cookies.