The year 2017 was pivotal for the universe of Non-Fungible Tokens. These special tokens allow you to obtain title deeds to all kinds of digital objects and trade them on decentralized marketplaces. The most famous was LarvaLabs and their CryptoPunks (some of which are now trading for several million dollars).
But that was without counting on Decentraland: on August 18th, the project raised $26 million during their ICO with the aim of creating a virtual universe where each parcel of land would be an NFT and where the owners could have total creative freedom.
Decentraland uses a token as its main currency, $MANA. In a few words, the project consists of creating a “metaverse” (or virtual world) accessible to anyone and hosted on Ethereum.
There are still steps to be taken, but Decentraland has already overcome many, here is their story..
In the beginning, there was only a simple virtual map on which you could reserve small plots of Land, the $LAND.
Except at that time, the ERC-721 standard (NFTs) was not yet approved. Decentraland was forced to create a smart contract that could be modified postproduction in anticipation of the arrival of NFTs on Ethereum.
Produced on a tight schedule and with fixed hope in the rapid development of the ERC-721 standard, Decentraland concluded its first LAND presale in less than an hour with the promise of distributing the land to investors a few months later.
Decentraland is composed of a total of 90,000 LAND, each plot representing a 16×16 meter space with 34,356 individual plots sold during the pre-sale, the rest were reserved for the common infrastructures created by the projects team. These can be seen today as roads or communal areas like Genesis Plaza, the zone where players spawn on arrival. The other zones are often used to host quests during special events like Halloween and Christmas.
One of Decentraland’s great strengths and also challenges was in allowing community groups to propose project ideas in a kind of crowdfunding system. A project would be proposed and then voted on by the community by using contributions of 1000 $MANA.
Each 1k $MANA would reflect one plot of LAND contributed towards creating various sized Districts, each one with their own identity and individual governance. The district leaders then had many months of complex structuring of their individual governance systems, some became privately held businesses others would be run as not-for-profit community spaces.
Districts are distinct from Private Estates: although these two terms refer to a grouping of individual land plots, Districts have a system of governance and Estates do not. There is for example the Vegas City District which is run as a private limited company with the space hosting casinos and other similar games and it’s also possible to bet with crypto, with and without real value.
At that time, the crypto industry was experiencing the end of its previous bull run. CryptoKitties, known to be the first major NFT experiment, at that point was using 20% of the Ethereum network. Decentraland had just completed the implementation of what was to become one of the most well-known metaverses in the ecosystem.
It’s January 2018 and the distribution of LAND from the first presale has just been completed. The crypto market has collapsed over a few week period and it is no longer party time but rather time for the discovery of solid benchmarks.
Decentraland will succeed in providing these benchmarks to its community throughout the year by building the foundations of its metaverse. The project is a big challenge because everything has to be built from scratch: a pleasant marketplace for investors, the creation of a governance system, the second sale of the remaining LAND and especially, tools for developers.
The step that followed the distribution of the LAND was the implementation of the final version of the marketplace to exchange land so investors could speculate on the future value of their digital assets. Which district will be the most popular and attract the most people? Which road will be the most travelled? What will be the terrain offering the most exposure and visibility? Which audience will be attracted to this or that “District”?
While investors were asking themselves all these questions, the developers announced on April 23rd the release of the SDK (development kit) alpha to start building and modeling scenes according to their wishes.
Developing and programming takes time, even more so when the decision-making processes are as horizontal as possible. With the marketplace for investors and traders running and the SDK for developers, the next step to take was the governance of Districts.
To achieve this, Decentraland opened the discussion space, Agora on July 4. Initially this was open to the communities belonging to Districts in order to facilitate communication and decision-making, mainly around the design of the SDK and management of the “Districts”. It took almost 4 more months for Agora to be open to all Decentraland users.
To conclude 2018, a second sale of 9331 LAND took place on December 10. These plots were not created out of nothing but were not distributed during the initial presale. It was certainly enough to end the year in style before being able to open the metaverse up to everyone!
At the end of this first year, 38 ‘Districts’ were active to begin in 2019. Nineteen of them were then later dissolved, mainly due to lack of activity. This dissolution of Districts resulted in the refund of 1k MANA per contribution back to the original investors and then that LAND was transferred to the Community Reserve.
The latter is the official reserve of the Decentraland DAO (Decentralized Autonomous Organization). It is responsible for rewarding the community for their different creations and financing initiatives to promote the project.
After a change of their website’s interface and updated logo, a new tool appeared in March: the Builder. This feature makes it very accessible to easily assemble 3D scenes from a library of predefined objects without having to own LAND or have extensive 3D building skills.
This step marks the first turning point for users who don’t know how to code or have no access to LAND: through using the builder users could participate in the construction of the metaverse in a concrete and free way. Several competitions were held in the following months to reward the most creative builders and also allow for development tests on a larger scale.
Before, these tests had been permitted to arrive during the closed beta stage, in June, an important detail was born in the Builder: when it became possible to import ‘Collectible’ NFTs held in your wallets scenes. Even though this was first just limited to a flat image of CryptoKitties, it was nevertheless the first external NFT project to be integrated into a virtual universe held on Ethereum.
The only condition to be able to participate in the closed beta was to create an avatar and above all, to give it a name for the sum of 100 MANA. Throughout the month of July, many invitations were sent so early users could try Decentraland before anyone else and participate in the finalization of its development.
The year 2019 ends with two updates offering interactions in the setting and with objects, allowing simple quests to be created directly from within the Builder itself.
The year 2020 was extremely rich and diverse for Decentraland in terms of openness, decentralisation and partnership development. In February, the project went into open beta and then set up its governance in the form of a DAO.
To celebrate the opening and welcome the many new arrivals, a virtual festival was organized where $MANA was up for grabs, as well as exclusive accessories giveaways for avatars to wear. This first wave of distribution for NFTs to personalize a virtual character may seem innocuous, but it marks the launch of a market rich in virtual clothing collections and accessories of all kinds.
With a DAO created by an independent service to the project (Aragon) and the integration of Matic as a parallel blockchain, facilitating transactions and hosting content on the 13 Decentraland community owned servers, everything was set in place so this metaverse owned by players could now present itself as fully decentralized.
Therefore, the most important smart contracts of this metaverse, such as the management of LAND, Estates, wearables and the marketplace, now belong to the community and $MANA holders can vote for the changes they want.
Like with the rest of the world, Decentraland also experienced a slowdown in its development during the 2020 lockdown, in an expression of solidarity, the crypto community pulled together with donation campaigns and Decentraland was not left out. Very quickly, life resumed its course in the virtual universe and many events were organized to help developers create more games.
Indeed, the construction of the metaverse content is intended to originate from its users but also, thanks to partnerships with artistic marketplaces such as Opensea and Mintbase, museums exhibiting the works of crypto-artists were built.
In the preceding months, Decentraland stepped up its collaborations with the arts sector, unlocking its marketplace to MakersPlace, SuperRare and Known Origin. The climax was reached in December when DJs 3LAU and the American-Portuguese band RAC offered live performances in the metaverse.
Continuing its momentum and taking advantage of the public’s new interest in cryptocurrencies, the year 2021 began with the landmark announcement of a partnership with Atari in January to create a space dedicated to the various historical games of the retro brand. By completing simple tasks or solving puzzles, it is possible to get rewards not only from Decentraland, but also from external projects that have built buildings and developed games to promote their ideas or projects.
In March, like the rest of the NFT ecosystem, Decentraland experienced a huge spike in activity. The consequences were positive financially for traders (many LAND were sold for more than 200,000 dollars, including one at 913,000 dollars) but rather negative for users because of the many bugs that took place during certain events.
Even if it was part of a more global context, this unexpected performance test raised questions about the scalability and adoption of Decentraland among the general public.
If the point of comparison is Steven Spielbeg’s film “Ready Player One“, it is still a little early before Decentraland can claim to look like it.
However, with industry leaders like Sotheby’s creating their own virtual auction house and organizing the “Natively Digital”’s sale in June, it’s certainly one step closer to it.