It is the “OG of OGs,” as Lighthouse co-founder Jonathan Brun puts it. But can the metaverse’s pioneer ecosystem adapt its tools and model to sufficiently empower creators?

Key Takeaways:

• Launched in 2017, Decentraland quickly became one of the earliest proofs-of-concept for what a blockchain-based virtual world could look like.

• Decentraland has built a robust community around its 3D virtual browser-based platform, reporting as many as 300K monthly and 18K daily users in December 2021, although some indicators suggest lower usage today.

• While Decentraland’s first-mover status and popularity have helped it gain prominence, its developer tools and supports need continuing updating to ensure sustained usage amidst growing fragmentation of the virtual world landscape.

• Decentraland is at the origin of the open metaverse movement. Whether or not web3 ecosystems end up attracting more users than Decentraland in the long run, the project’s core mission of fostering community-ownership and governance has been an undeniable success and still serves as a north star for the space today.

Before Decentraland, it was hard to find a true case study for the open metaverse.

Yes, the word “metaverse” has been around since 1992, when author Neal Stephenson coined it in his sci-fi novel Snow Crash. Massive multiplayer online games (MMORPGs) such as Everquest and World of Warcraft proliferated in the 2000s. And of course there was Second Life, a virtual world which had nearly one million users at its height in 2013, although its activity has dropped since.

In each of those instances, the virtual worlds were more closed than open, less creator-friendly, and less focused on community governance and ownership. What makes Decentraland special is that it was the first virtual ecosystem to successfully build a bottom-up community that centers around user-generated content, digital ownership, and decentralized governance. They were the first to bring tokens – ERC-20 and ERC-721 alike – to the metaverse.

It wasn’t an easy task. Decentraland went through plenty of hiccups as it distributed governance and value. When Luke Winkie of PC Gamer explored it in March of 2020, he wrote about a varied world where one could explore loot-filled desert islands, picturesque farms, and haunting mausoleums.

However, actually traversing that world was challenging, with Winkie describing it as “a rickety product” with “frame-rate hitches, texture pop-ins, and weird screenscaling bugs.” 

The experience, both then and today, can’t compare visually to top-of-line gaming options. But in his early exploration of Decentraland, Winkie did stumble on one revelation that would prove telling, writing: “I’ve never encountered a video game that’s so reliant on its own corresponding metagame. In fact, I’d say the metagame is the game here.” 

Much of Decentraland’s success since has been due to a vibrant community and the virtual marketplace that exploded around it. The rise of NFTs and their popularity, particularly in 2021, was a catalyst moment. 

As investors looked to capitalize on rising virtual plot values, industries bought up whole sections of Decentraland, culminating with a record $2.4 million purchase in November 2021 and the formation of hotspots such as Fashion Street (home to luxury brands such as Gucci, Prada, and Ralph Lauren, and landmark events such as the Metaverse Fashion Week).

That attention was a significant life stage moment for Decentraland, helping it build its user base and the value of its $MANA token and LAND NFT, which denotes ownership of 1 of its 90,601 parcels. Samsung, Adidas, PwC, and Miller Lite have purchased Decentraland LAND, and musical artists including Grimes and Deadmau5 have performed in it. 

Decentraland has evolved from its early days as a graphically primitive, yet philosophically intriguing, escape from reality. 

It has now formed as more of a true metaverse ecosystem, one that combines our physical world with the virtual one, with significant brand and user crossover (consider that many Decentraland concerts feature avatars dancing to a streaming physical world video of live performers).

But if Decentraland’s recent surge can be partly attributed to the “gold rush” created by its surging land value, what happens now that MetaMetrik data reports that sales prices have plunged more than 80% since last year?

Its scarcity land-based model did well to attract investors and brands, but those stakeholders may be more hesitant to keep building if the profit potential isn’t clear, now that the gold rush has slowed down. 

As Arad, a blockchain art curator with FingerprintsDao, writes in his Medium piece “The Simple Case Against Scarce Land,” it’s the “teens, the artists, the ambitious creatives” that drive content production and, later, adoption.

“Yes, the capitalized companies and individuals will meaningfully enter at some point, but only after years of scrappy, creative individuals showing them how to do so successfully,” Arad writes.

“If you depend on well-off (land owners) ... to create unique content and draw audience, boy, things are gonna be rough for you.” To thrive, Decentraland may need to evolve to better support creators building user-generated content on its platform.

The biggest challenge is that its in-house builder is “a bit dated,” as Jonathan Luebeck, a lead developer for the third-party DCL Edit scene editing tool, said in a recent Twitter Spaces event hosted by Lighthouse. 

Specifically, Decentraland allows users to build simple scenes with core assets provided by its builder. However, more complex interactions — not just opening a door, but, say, having data streamed into a scene or having NPCs in a scene — requires using a Decentraland SDK that serves as a pure programming interface.

“You’ve got to build a lot of TypeScript to build your scene … if you want to place a single object in your scene, you have to write 15 lines of code to place that object,” Luebeck said.

One key strength for Decentraland is that its platform builder is relatively open, allowing third-party groups like Luebeck’s DCL Edit to interface with it. That has allowed some creators to stay on Decentraland even with its builder’s technical difficulties. 

“A big gap in this space … is to develop more user-friendly tools. I think that’s how we’re going to onboard more people into leveraging any metaverse platform,” said Corey Kovnats, the founder of Parcel Parties, a DCL builder and explorer community, comparing the future of the metaverse to current web2 technologies.

But even with better user tools, games themselves continue to be difficult to make on Decentraland, and there have been limited grants and funds available to help encourage more development. The platform currently doesn’t attract as many developers as it could, and Kovnats believes ease-of-use will be key to bringing more on board.

“We’re moving from web sites to web spaces, and there’s all sorts of [web2] drag and drop website builders out there: You’ve got GoDaddy and Wix and Squarespace, and they make these things insanely user-friendly.”

Decentraland may be able to evolve an easier interface for builds, but it will have to act quickly to keep up with creator demand. 

Sandbox is often cited as its main competitor due to the former’s visibility, but it, too, faces some of the same limitations as Decentraland; in particular, its reliance on voxels limits the types of visuals creators can make, and its builder has similar limitations (although Sandbox allows builders to code in some programmatic logic, unlike Decentraland). 

But Decentraland’s biggest competition yet may come from metaverse ecosystems that are creating developer tools that are easier to use and unleash the full creative and illustrative potential of the spatial web. 

Mona, Spatial, Webaverse, Hyperfy, and others make up an emerging group of virtual worlds that have become exciting playgrounds for creators, allowing for more accessible virtual spaces and tools to build without as intensive programming knowledge.

As with any other medium or industry, audiences will always flow toward the best content and experiences. If the most beautiful, interactive, and intriguing experiences are taking place in other worlds, virtual travelers will gravitate in kind. This dynamic is even more pronounced in the metaverse where, unlike with physical experiences, traveling between spaces is merely a browser tab away.

As a poster child for early commercial success, effective decentralized community building, and building the first bridges connecting primarily web2 enterprises to the broader web3-powered metaverse, Decentraland’s value to the ecosystem is clear.

Now it faces the challenge of many first-movers: Can Decentraland innovate for its core users and adapt its business model to capitalize on its early advantage, or will it struggle to maintain relevance as trends change? Beyond that, will its early success be enough to encourage newer projects to continue embracing the values of decentralization despite the technical trade-offs it creates?

Time will tell. In any case, Decentraland opened the floodgates to web3 metaverse innovation. And from our experience discussing with some of its key builders, the DCL community remains one of the strongest and most motivated to bring a decentralized version of the metaverse to life.

Lighthouse is building the first open metaverse navigation engine, enhancing access and opportunity across virtual worlds – including Decentraland and countless others. Visit us and follow @lighthouse_wrld.