Meet Decentraland: the VR platform powered by the Ethereum blockchain
Decentraland (DCL) is a decentralized, virtual reality platform powered by the Ethereum blockchain technology. It is founded by Ariel Meilich and Esteban Ordano. Meilich, the CEO of the platform, was previously an analyst at Charles River Ventures, a leading Silicon Valley venture fund, and CEO of Benchrise, a big data company whose product helped find software engineers for technology companies. Ordano is the CEO and he was previously CTO at Po.et, a blockchain-based publication tool. Decentraland launched the Market place on March 19. Below is a Q and A with Ariel Meilich who shared Decentraland’s story.
Q: How does DCL platform work and what is its mission?
Meilich: With our platform, users will be able to create, experience, and monetize content, games, and applications, all hosted on the parcels of virtual LAND that make up Decentraland’s three dimensional, traversable space.
Decentraland’s mission is to create a virtual world that is owned by its inhabitants. Once complete, the infrastructure and governance of Decentraland will be fully decentralized and free from the control of a corporate entity. This is being achieved through tools and platforms like Ethereum and the InterPlanetary File System (IPFS). The very LAND that makes up Decentraland is represented by non-fungible tokens and can be bought and traded like any other unique digital asset, placing ownership of the metaverse in the hands of its users.
Q: Would it be fair to consider DCL’s business model to be similar to that of The Million Dollar Homepage?
Meilich: Our business model resides on driving demand for our token, MANA. The company holds a reserve of these tokens and is incentivized to drive its demand. The token will have several use cases. Firstly, similarly to the million dollar website, we are creating a market for users’ attention: what we mean by this is that people are willing to pay over 500 times more for LAND parcels that are close to the spawning areas ($120,000 USD for the most expensive ones, versus $150 for the cheapest and farthest away), since they will have considerably more traffic. However, being in VR, we can have developers integrate their content right on the LAND and generate revenue with their creations. In that sense, the LAND is very different from the MDHP, since it enables all sorts of interactive applications.
MANA is also the in-game currency, and in our upcoming LAND marketplace. sellers will be able to burn MANA to promote their LAND listing and reach more buyers. So ultimately the business model of Decentraland is that of creating a rich ecosystem where developers can grow the business of their choosing, publish their content without intermediaries and keep 100% of the revenue they generate.
Q: When would you complete Silicon Age development?
Meilich: We are currently in private Alpha. We are planning to launch Iron Age towards the end of this year. However, in the next couple of weeks we are releasing tools for developers so that they can begin building content and applications on top of their LAND, which can now be bought from other users in the LAND marketplace. The Silicon Age should be released sometime next year.
Q: How different are you from Voxels?
Meilich: Decentraland is a shared single world. Because of this, the other ancient users remain inside of the world, allowing for their discoverability of neighboring experiences. Also, we are focusing on creating an economy inside of the world. People will be able to buy and sell crypto assets inside of Decentraland, converting some LAND parcels into virtual showrooms for digital assets, and industry that currently represents over USD 80 billion.
Q: What are the advantages of having instant access to diverse content in DCL virtual world?
Meilich:Building Decentraland on WebVR was a strategic decision. While their performance and graphics are still not as good as those you can achieve on native clients, being web based allows us to tap into a user base that is at least 10,000 times larger than the number of people that have high quality VR devices. This way, while our experience will be available in VR, it will enable anyone who has a computer to access Decentraland
Q: What is the profit model (economic incentive) for DCL content developers?
Meilich: We are the first open platform that takes no fees from sales made by content developers, giving them complete control over their revenue stream. The most successful business model so far for Ethereum-based games is one where the development team sells some rare digital assets to the public. The fact that players now actually OWN the assets is a game changer. Even if the publishing company goes out of business, you get to keep your property.
For instance, CryptoKitties sells their Generation 0 cats to users, having already made millions of dollars this way. While this may have been driven by a primacy effect, true ownership opens the door to completely new dynamics. Think of items that can be re-utilized for different purposes, or that can be used across different games or applications. In the case of many other Ethereum games, when users trade these assets, the game developer receives a small percentage of their price of the sale. This is also innovative from a business model standpoint because the content creator can monetize with this sort of “royalty” regardless of where the item gets traded.
Additionally, Ethereum game developers may charge a fee to do certain activities, such as dueling in the case of Etheremon, a game where MonSeekers battle their EtherMonsters. While some early examples of blockchain gaming are following similar models, we’re currently working with multiple development teams globally to push the boundaries of what blockchain gaming means, as well as the business models. I believe a lot of innovation is yet to be seen. On the one hand, traditional gaming companies will turn the ecosystem upside-down as they join this nascent genre with their decades of expertise. On the other, we will see the possibilities expand to new levels as the blockchain scales and its throughput increases by orders of magnitude. We’re in active conversation with a lot of gaming development teams. We wish many Chinese developers will join this exciting journey with us.
Q: VR growth is lower than expected. What are the advantages of the VR Ethereum platform currently?
Meilich: Market research has shown that the VR market will grow tremendously over the years. However, it is true that the meaningful mass market is not here yet. The market has been fragmented by multiple major HW/SW platform players and it is uncertain which of those existing platforms will sustain the current policy and business structures. In the meantime, VR developers are struggling to find monetization models.
As previously mentioned, Decentraland is an open platform for the developers, and due to the nature of blockchain technologies, the platform will be governed by the Decentraland participants not by a single dominant player or business entity. As we all know, the surge of Cryptocurrency and Blockchain interests have brought about new capital market and industry leaders who are interested in both VR and Blockchain. They have started to show interest in Decentraland as THE platform for content and investment opportunities by establishing VC funds.
In addition, Decentraland is more than VR. VR is only one of the ways to access the platform: the other two, Desktop and Mobile, will probably be how most users experience the world over the next few years, until VR becomes better and more widely available.
For the time being, web and mobile are king, particularly for accessing Ethereum DApps. This is why we’re relying on WebVR.
By the way, we are going to be hosting the first blockchain gaming conference this summer in Hong Kong. We hope a lot of Chinese developers join us on this exciting journey.
(Top photo from Decentraland)