Decentraland recently wrapped its four-day virtual fashion week. It would be hard to argue it was a success.
While the metaverse platform attracted 108,000 “unique attendees" last year, the company said only 26,000 attended this year, a dramatic decline of 76% for the event that ran from March 28 through March 31. Despite top brands like Dolce & Gabbana, Tommy Hilfiger and Adidas all sponsoring shows, a Decentraland spokesperson said the most people signed in at one time barely eclipsed 1,000 people.
Decentraland has been valued at $1 billion, and its native token, mana, once had a market capitalization of more than $6 billion. Event planners tried to look for a bright side.
"Although attendee numbers were down, we had tens of thousands of new visitors to the metaverse," said Dr. Giovana Graziosi Casimiro, head of Metaverse Fashion Week. "For the second ever Metaverse Fashion Week, we believe that we improved upon the experience from last year."
The crypto winter is real and Decentraland’s struggles are not unique. Exchanges have collapsed, non-fungible token trading is a sliver of what it was during the bull run, and companies have been forced to lay off large numbers of employees. Blockchain-powered games and platforms like Decentraland, The Sandbox, Alien Worlds, and even Axie Infinity — which enjoyed a brief moment in the sun — are all failing to attract and retain mainstream consumers.
As a matter of comparison, popular gaming platforms like Roblox and Fortnite boast tens of millions of users daily. Roblox reported it had more than 58 million daily users during the last quarter of 2022. Fortnite’s daily active users surpassed 34 million last year.
Decentraland’s gameplay, design and reliability have all been criticized and may be why the platform is a disappointment for many.
“In practice it’s a bad video game made up of smaller, worse video games wrapped in real-estate scheme cosplaying as The Matrix,” said Dan Olson, an influencer who discusses a variety of issues on his YouTube channel called “Folding Ideas” that has more than 800,000 subscribers.
The platform, originally founded by Argentinian coders Esteban Ordano and Ari Meilich, officially opened to the public in early 2020.
Metaverse architect Hunter Swihart said he enjoys creating digital spaces for Decentraland but added that he has been disappointed by how many people are using the platform. “I thought because of how much people were talking about it that it would be popular,” he said.
Weekly trading volumes
Near the end of 2021, when metaverse, crypto and NFT hype was at its frothiest, one Decentraland plot of land sold to Metaverse Group for $2.43 million. Metaverse Group didn't immediately respond to a request for comment.
Now weekly trading volumes hover around a dismal $50,000 a week, a far cry from trading volumes that consistently exceeded $1 million per week through the end of 2021 and beginning of 2022, according to The Block research.
“Everybody saw prices skyrocketing with big businesses buying land for millions of dollars, which now in retrospect was a terrible mistake,” said Swihart. He also said he would not be surprised if the platform ceases to exist in the near future. “The real platforms will come in the next 5 years," he said.
Only between 20 and 30 people weekly are buying and selling Decentraland land NFTs — the digital certificates which act as proof of ownership — according to The Block research analyst Brad Kay. “It’s definitely worrisome … the number of traders has been decreasing since the beginning of 2022,” he said.
The total number of Decentraland landowners is also low, according to Kay, who said most NFT projects have a minimum of 30% unique holders (individual wallets that own the non-fungible tokens). In the case of Decentraland, of the 98,000 land NFTs in existence, only 8% are unique holders. That means about 7,800 people own all land on the platform.
This is “likely a result of big whales, insiders, or others hoarding supply,” said Kay, who pointed out it appears Decentraland still owns about 67,000 plots of land.
Decentraland’s native token, called mana, has also suffered to a large degree amid the prolonged bearish market which is casting a shadow of the entire crypto industry. After briefly surpassing $5.00 in late 2021, it now trades at about $0.60. Mana’s market cap has fallen from about $6.8 billion to about $1.1 billion.
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