I don’t have high hopes for the decentraland metaverse

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When projects like Decentraland and similar projects were released I more or less mentally dismissed them as an interesting concept, but without any real life uses for them. That said, perhaps I was a little biased as I’ve never had too much faith in the idea of building so called ‘metaverses’, and figured that if you want to have events like a virtual concert than you can just video stream the concert, and if you want to hang out with friends or strangers online you can just open a voice call and play any game or do any other activity.

Despite this however, with the successes of Fortnight and Roblox in this area, and Facebook’s attempt to do the same, I thought I might revisit the concept. And besides, I would rather hang out in a crypto-ish space for some sort of virtual event then in Fortnight or Roblox. That said, the title still stands, I don’t know that projects like Decentraland will actually succeed regardless of whether the concept of metaverses does well or not.

My personal conclusions to this are based on four different issues that are apparent in Decentraland and many similar projects in their current state.

Issue 0: Crypto Requirements. I am calling this issue number zero simply because I won’t count it against a crypto platform that they require crypto to participate. That said, it will limit the scope of who is going to participate in the project based on their knowledge of the systems.

Issue 1 is the issue of the fact that Decentraland is actually, contrary to it’s name, fairly centralized. Yes, the land parcels and other collectibles are held as NFTs, but the game itself is hosted as a centralized server just like most other games. Say I decided to self host a Minecraft server, but only allowed the existence of 256 chunks. Then I allowed people to buy those chunks and only mine, build, or kill mobs on their chunk that they bought. The server would pull chunk ownership from the blockchain, but otherwise it would be a normal centralized Minecraft server with an odd restrictive set of parameters. To be fair to Decentraland it does differ from this in the sense community members can mirror the server, so it is as if I started that Minecraft server and then anybody else can mirror it so that if mine goes down the clients can connect to a separate server with identical content on it. Unfortunately, however, with the current internet in place, it is not feasible to have a multiplayer game that does not rely on centralized servers to provide the content, and while the NFT based ownership of land is definitely unique, I see it as a both a little genius and a little bit gimmicky given the structure is at it’s core fairly similar to the Minecraft example I gave.

Issue 2 is the fact that Decentraland currently lacks a game to a large extent. You can, at least theoretically, build things – though I will get to that in issue four, and you can interact with others and attend events, but that’s about it. Unlike services like Rolblox, Fortnight, and Facebook it does not have a huge audience giving it a disadvantage over other platforms. Sure, it’s experimental and I would not blame anyone for releasing cheap or free software that lacks a lot of features, but I’ll get to that in a bit.

Issue 3 is the lack of players. Unless something in particular is going on I would not expect a large group of people to be online. I blame this mostly on issue four, but a bit on issue 0-2 as well.

Issue 4 is the big one, and that is artificial scarcity. If I want to get invested into the Decentraland project (I use the word invested in both the monetary sense and in the spending time sense) and do anything other than walk around and attend events or check out other people’s builds I need to buy a plot of land. How much does a plot of land cost? Well, the cheapest one I could find was a little over three thousand dollars. Yes, this plot of land in a digital game has the same value as my car that has seen some better days. And yes, this is on an experimental platform with nearly nobody online. If you ask me that is absolutely insane, though it would not have been this way if it was not intended to be this way.

You see, there was and is a pretty small limit to how many plots of land are available on the map. This creates an issue with the fact that because there is a limit the price is driven up by speculators who want to buy the virtual land and hold it until they can sell it at a profit. Be it land out west in the 1700s or the housing issues today, scarcity leads wealthy speculators buying up all the scarce things to try to make a profit. Those are of course, you know, real tangible pieces of property, however, instead of land that can be created or destroyed with a few lines of code.

Now, I know what you’re thinking, why not just make an infinitely large map that people can go play around with. Even if plots on that infinitely large map require a few dollars to purchase, that would fix the artificial scarcity and allow those with the premium plots near the center of the map to retain some of their value. Going back to using Minecraft as an example, somebody probably came up with the genius idea of instead of only allowing say 90,000 accounts to be created and then requiring existing accounts to be bought and sold on a secondhand market, they could instead just allow the limitless creation of accounts for a fixed fee.

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Now to be fair, I want to point out the argument that the developers of Decentraland made in regards to artificial scarcity. They made the claim that with no artificial scarcity there would be a large number of abandoned and/or mass claimed plots. That said, since most plots are purchased with the intent of flipping them many of them appear to be abandoned anyway.

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The simple solution, at least in my mind, is to expand the map or create a second map that way the everyday individual can actually participate. Yes, the value of the properties would drop, but it with the ability for everyday people to join would also probably have a chance of strengthening the community to the point where the premium plots rise back in value to what they are now because they would be much more desirable than the infinite or near infinite number of second class plots.

Ultimately, though, I doubt that will change. Yeah, allowing anybody outside of your wealthy crypto speculators to participate would probably save the ecosystem, but doing so would – at least in the short to medium term – shred the entirely artificial value of the project’s land plots so I doubt they will do that.

That said, I could be wrong, I am known be wrong a fair amount. Additionally, however, eventually somebody could probably fork the project or build a competitor from the ground up that lacks this intentional scarcity and allows people to participate. Otherwise, however, if Fortnight, Roblox, and Facebook all release free products that are objectively better in many ways then I take it the crypto based projects like Decentraland are going to go the way of the beanie baby.

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So I apologies, I don’t usually make content solely to tear things down. Additionally, just because projects like Decentraland are the way that they are now does not mean that they cannot change into something different and they are far from a lost cause yet. Last, these are my opinions, and I could be very wrong.

Furthermore, this is a good time to point out that I don’t dislike the project, it’s community, or the vision of it’s creators. The proceeds from the initial plot auctions were burnt instead of going to the developers, so this is not a cash grab. The community seems nice, and were quick to answer my questions about the project on Reddit (apologies for using the information to criticize the project). Finally, in defense of Decentraland, I do like the idea, I just fear that it will not succeed due to the reasons I am pointing out.

That said, these are my opinions, and I feel they are based on objective observations and worth mentioning, regardless of whether they are positive or negative. Also, while doing some research on this topic to make sure I wasn’t missing important things, I came across two articles that discuss similar topics worth sharing: Decentraland: Why I Remain a Skeptic and Metaverse masters? How crypto can stop a Big-Tech virtual oligarchy.

Regardless, I hope you enjoyed this content.