Original article by EVALUAPE
All information in this article is provided for reference only and does not constitute investment advice.
Decentraland is a virtual reality platform powered by the Ethereum blockchain. Users can create, experience, and even monetize content and applications on the platform.
· The project has been of high popularity since the financing period. It also provides a variety of community activities and has established lots of third-party partnership.
· High update frequency
· Future developments are very likely to get out of control, with the VR platform filled with negative content.
· Threshold can be increased as the price of lands gets higher, which makes the platform less friendly to ordinary users.
· The development cycle is too long.
According to the report by Statista, in 2018, the revenue generated by global online games reached 11.6 billion, with an estimated annual growth of 2.6%. All this indicates a huge volume in the online game market. In addition, Statista’s report also states that the virtual reality industry has also seen rapid growth in the recent years. The market size of VR hardware and software was $2.2 billion in 2017, and is expected to surpass $19 billion in 2020. We can see that VR game is also a huge potential market. The same applies to the blockchain industry as game-related projects are developing at a very high speed. Currently, among the 1,300 Ethereum-based dApps listed on DappRadar alone, there are nearly 400 games.
Among all the blockchain-based sandbox games, the competitors of Decentraland include NeoWorld, Evolution Land and etc. At present, NeoWorld seems to be the one with the most advanced progress and has clients for users to download. In NeoWorld, players can collect resources and create content, but it is based on a centralized mode. Its tokens are the currency in circulation. In blockchain-based non-sandbox games, the best like of Decentraland is VRChat. VRChat was launched in February 2017. According to Steam, it has received 23,000 likes among a total of 25,000 comments so far. Besides, as shown by SteamSpy in January 2018, Steam’s third-party data platform, it has accumulated over 2 million users. Its daily active user number also reaches over 10,000 and surpasses 20,000 at peak times. The game has successfully attracted a large number of users with the interactive feature brought by VR and the inherent strong social attributes of the game itself. Users can customize their figures via SDK, create special effects and even a world on their own servers. Decentraland is very similar to VRChat apart from its financial attributes.
By contrast with these products, the decentralization feature of Decentraland is a main selling point. By leveraging blockchain technologies, the platform enables the confirmation of ownership of virtual assets. As long as there are enough players and the game itself is sufficiently recognized, it will be able to develop in the long run. But through horizontal comparison, we can also see clearly the problems of Decentraland. Firstly, the development cycle is too long compared with the centralized ones like VRChat and NeoWorld. Secondly, Decentraland is plagued by the grey area of content. Previously, Altspace VR, a main competitor of VRChat, encountered a very serious problem of sexual harassment, and VRChat itself also had many improper comments. While all this is relatively easy to solve on centralized platforms, it can be devastating for Decentraland. (8)
Decentraland is a distributed virtual reality platform. On this platform, users can create and experience content, as well as interact with other users and entities. Users can also claim ownership of virtual property — LAND through a blockchain-based ledger of parcels of LANDs. Each parcel of LAND is identified by a set of cartesian coordinates (X, Y), covering an area of 10m x 10m and containing information of owners. Owners can decide the content to be published on their LANDs, ranging from static 3D scenes to interactive systems such as games. All this can be developed through Decentraland SDKs which are now available with tutorials attached. LAND is a non-fungible, transferrable digital asset stored in an Ethereum smart contract. Users can pay an ERC20 token called MANA in exchange for LAND. MANA can also be used to buy the digital goods and services in the virtual world. For the time being, Decentraland has performed two rounds of LAND auctions. Lands in the Genesis city are almost sold out. MANAs spent on the auction will be burned. To accelerate the development of the network in the early phases, the stores established by developers and content creators in Decentraland will be rewarded, and the Foundation also plans to attract various talents to participate in the network through all kinds of competitions.
By contrast with centralized VR platforms, users can completely own and enjoy the value generated by their own efforts on Decentraland. In short, higher profits can be achieved through content creation on decentralized platforms, rather than being charged a fairly high fee on the centralized ones. In addition, on decentralized platforms, the content will not be restricted or deleted, while centralized platforms own absolute control over the content. If a centralized platform closes its business, the third-party content will no longer exist. But unrestricted content creation is a double-edged sword. As the platform grows, there is a high probability that there will be a lot of pornography, advertising and other spam. In Decentraland, there is now a gray area, including a gambling area and an adult-only area. In the adult-only area, there are adult-only online chat, VR porn services, and an adult-targeted online shop. In the future, it is very likely that the gray area will flood the entire network, bringing irreversible and serious consequences, for example, a VR crime city. But there is also a great probability of a VR-version Silk Road. Although developers mentioned in a BBC interview that a filter layer will be developed to screen improper information, the application of the filter layer is not mandatory, which means that the consequences of a decentralized model can be devastating. (8)
The protocol of Decentraland is composed of three layers, including a consensus layer, a content distribution layer and a real-time layer. At the consensus layer, Decentraland employs an Ethereum smart contract to maintain the ledger of ownership of the land parcels in its virtual world. Users will be connected to the Ethereum network to receive updates to the states of the LAND smart contract. At the content distribution layer, Decentraland uses a decentralized storage system to distribute the content needed to render the world. For each parcel of LAND, a reference to file with the description of the parcel’s content is retrieved from the smart contract. The current solution uses BitTorrent and Kademlia DHT networks by storing a magnet link for each parcel. The project hopes that as the IPFS technology matures in the future, it can turn to IPFS and Filecoin to support the network, which is not very feasible so far. IPFS may lead to the same performance problems as BitTorrent and Kademlia DHT networks. How to ensure game performance, enable synchronized game download, handle a large number of transactions and carry out content construction under the Ethereum network + IPFS architecture can be a difficult point. At the real-time layer, users can communicate with each other by establishing peer-to-peer connections with the help of servers hosted by landowners or third parties. Those who maintain the servers will also be rewarded. The communicational content between users includes avatars, the positioning of other users, voice chat, messaging and interaction with the virtual environment.
At present, the project is advancing at a relatively normal speed, which is evidenced by the code update rate on GitHub. However, from the perspective of the overall project planning, the development speed is still slow. According to the roadmap, Decentraland was founded in 2015 and would be developed in four phases, namely the Stone Age, the Bronze Age, the Iron Age and the Silicon Age. Currently, the project is still in the phase of the Iron Age. The team is determined to allow users to create new applications in the Iron Age and complete the development of payment systems and scripting systems. However, judging from the current development progress, there is still a long way to go before the completion of the Iron Age. The entire VR world will only be completed in the Silicon Age when users can communicate with each other through VR in the public blockchain. Although the progress of the team is in line with the goals in the past three years, its development speed is still relatively slow. (7)
Twitter — Account opened in May 2015, with 684 tweets and 42,500 followers. The update frequency is relatively high recently; Discord — 8,278 members. Discussions are active between ordinary members as well as developers; Facebook — 6,396 followers, the content posted is basically in consistency with that on Twitter; Reddit — 5,900 followers. Update frequency is very high. The monthly traffic of the website also maintains at 150,000+ in recent months, and has not been impacted by the fluctuation of the broader market. Decentraland’s entire ecosystem is very active, and has kept a high popularity among players. (Data as of December 29, 2018)
In terms of content cooperation, Decentraland has already partnered with several games, such as Battle Racers, Ethermon and CryptoCarz. Players can access to all games through VR on its platform. For the time being, the scenes of monsters in Ethermon can also be seen in the demo posted on the official website. Decentraland also announced in August 2018 that it would invest $5 million to boost blockchain-based games on the platform.
In the fourth quarter of 2017, projects and institutions such as Aelf, FBG Capital, Okex, and Firecoin participated in the Terraform auction launched by Decentraland and teamed up to build an encrypted digital city called Crypto Valley. In addition, it has also established partnership with blockchain projects like imToken and district0x. (9)
Two members are listed on the project’s official website, while there are 40 members on Decentraland’s LinkedIn page, and 22 developers on GitHub. Ariel Meilich, project leader, specialized in neuroscience research before working in the technology sector. Then he worked as a market research analyst at Charles River Ventures in Silicon Valley, and later founded Benchrise, an Argentina-based CRM technology services company. Esteban Ordano, technical director, did several internships at Google before graduation. After graduation, he started to work in the blockchain industry. He became Bitpay’s software engineer in 2014 and participated in the development of Bitcore and Copay Bitcoin wallets. Then he founded a blockchain company named Zeppelin Solutions. The well-known ERC20 is based on its OpenZeppelin framework. Esteban has rich experience in blockchain development. The advisory team includes the founder of CoinFund Jake Brukhman, the founder of Aragon Luis Iván Cuende and cryptocurrency advisor Giotto De Filippi. Li Xiaolai was also one of the advisors but has been removed. Decentraland has a comparatively all-round team and sufficient development capability to finish the whole project. (8)
Decentraland is a virtual reality platform powered by Ethereum blockchain. It has attracted great attention with the unique concept and kept a relatively high popularity since the financing period. It also frequently holds activities within the communities. At present, the project is plagued by problems such as long development cycle and uncontrollable content. The strong financial attributes of games also help attract a large number of investors. However, too many investors can also bring big problems to the ecosystem. How to attract more ordinary and VR players to join the game as well as to lower the threshold will be the key to keep the platform operating in the long run. After all, if the virtual city becomes an investment center, the only purpose of everyone will be to profit from real estate speculation, which is completely meaningless.
Total Score: 8.15