Decentraland Real Estate Prices Plunged Nearly 90% In One Year

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Photo Credit: Raluca Seceleanu

Once a corporate darling in the metaverse frontier, Decentraland is a ghost town as investors abandon the metaverse.

Decentraland was hailed in 2021 as one of the first instances of an actual metaverse for users (ignoring the existence of Second Life entirely). Now, the metaverse hype-bubble is popping, with Decentraland popping with it. Just this week, mega-players like Disney, Microsoft, and more slashed their metaverse divisions amidst broader layoffs—with the once-hyped locales like Decentraland sinking into ghost town status. 

In March 2022, Decentraland hosted its own Fashion Week with virtual art, music and fashion on display. Brands like Esteé Lauder gave out 10,000 free NFTs to attendees featuring glowing wearables for their avatars. Dolce & Gabbana hosted a parade within the blockchain-based world, hocking its new digital couture. Even Grimes performed a DJ set at the Decentraland Fashion week as an avatar designed by Auroboros. 

The Fashion Week event took place in Decentraland’s Fashion District, where parcels of land were selling for $15,000 per 16-square meter blocks. The hype was there until the virtual hype crashed—leaving Decentraland a virtual ghost town. In fact, some of the actual mining ghost towns in California, Nevada, and Oregon probably have more visitors annually than the Decentraland platform now

Decentraland got its start in 2017 as a way to challenge Facebook, according to foundation leader Agustín Ferreira. “Big corporations like Facebook are taking advantage of all our data. With Decentraland, we have a better way to shape the reality of how we treat users.” 

It was one of the first metaverse projects to incorporate blockchain technology. Its founders envisioned a user-governed virtual world where people could develop experiences (not unlike Roblox) on plots of pixelated land. Utilizing the Ethereum blockchain, the developers created a special governance token for Decentraland called Mana. All decision-making about the platform, from creating new districts to banning offensive terms are carried out by votes in a decentralized autonomous organization (DAO).

In 2021, when Facebook rebranded as Meta—interest in the metaverse exploded. Decentraland benefitted from the increased interest as tech companies like Microsoft, Samsung, and Nvidia were throwing their hats into the metaverse ring. The value of the Mana token rose 287% the day after Facebook’s rebranding, reaching a price of $5.48 in November 2021. Suddenly, investors were interested in Decentraland and the promise of blockchain-based digital real estate. 

Soon people were creating virtual real estate companies to buy up digital land to rent out. Because voting power in the DAO is determined by how much Mana a group controls—voting favors the rich with the Mana to back proposals they want to see implemented. 

“[The voting system] does not represent the wider community of creators; it represents speculators who dumped a ton of money in early,” one early Decentraland user told Rest of the World in 2022. Because voting proposals on the platform that would ease the barrier to entry for new people are met with negativity from those with Mana—these proposals rarely pass. The result is that in 2023 Decentraland is a gated community ghost town. 

In October 2022, Decentraland tweeted it has around 8,000 daily active users. Ouch. As The Verge points out, that DAU count puts it behind the 14 year-old co-op zombie shooter, Left 4 Dead 2. If a new web3-based metaverse can’t attract more attention than a decades-old game then what hope does it have? Disney and Microsoft have both reportedly cut their metaverse divisions amid broader layoffs. 

In the words of professor Edward Castronova, “The metaverse is El Dorado for internet startups. They chase it into the jungle and die.”