The rise and fall of Decentraland gives priceless classes for the way forward for digital worlds. From speculative land booms to missed alternatives for creators, here is what went incorrect—and the way the subsequent technology of digital platforms can keep away from the identical errors. Written by Matt Bond.
—
The metaverse was imagined to be the longer term. As an alternative, it grew to become a punchline.
In October 2021, Fb modified its identify to Meta, and abruptly the metaverse was in every single place. CEOs could not cease speaking about it, manufacturers could not cease constructing in it, and your uncle could not cease asking you to clarify what an NFT was.
Then, simply as rapidly because it arrived, it vanished – abandoning empty digital worlds, nugatory digital land, and a collective “what the hell was that each one about?”
Most individuals have filed the entire period underneath “bizarre tech fever dream we would somewhat neglect.” However not me. As somebody who was constructing in Decentraland – the main metaverse platform – earlier than the hype practice arrived and caught round lengthy after it left, I believe that is a mistake.
The story of Decentraland’s rise and fall is not nearly crypto hypothesis or metaverse mania. It is about elementary platform design ideas that matter greater than ever as we navigate the AI revolution and the continued progress of digital worlds like Roblox.
These are the reflections of any person who skilled DCL from the within – what actually went incorrect, why it issues, and what it may well train us about constructing the subsequent technology of digital platforms.
When Digital Worlds Really feel Extra Actual Than Zoom
Earlier than I break down what went incorrect, let me let you know why I fell for the metaverse within the first place.
Earlier than COVID, my firm Treble hosted a whole lot of creators at weekly occasions in New York and Chicago. These weren’t simply events – they had been dwelling, respiration ecosystems the place musicians discovered collaborators, manufacturers found expertise, and tradition was born in real-time. When lockdown hit, we pivoted to Instagram Dwell occasions. We even launched a “profitable” marketing campaign for Jägermeister constructed round digital Instagram Dwell concert events. However one thing was lacking.
Gone was the electrical energy of spontaneous connection, the fun of recognizing your subsequent collaborator throughout a crowded room, the joy of pulling as much as the perform in that new jacket you simply copped. A remark part simply is not the identical as a crowd.
Then I found Decentraland. Positive, it was buggy. The animations had been cartoonish. However strolling by way of these digital areas, I noticed one thing acquainted: folks forming circles to talk, exhibiting off their digital style, constructing micro-communities and subcultures. It was nonetheless in its infancy, nevertheless it felt alive in a method that endlessly scrolling feeds by no means may.
However the actual thoughts blower for me, the important thing to Decentraland’s brewing revolution, was its now-infamous calling card: digital land.
Sure, “digital land” sounds foolish. I get it. However the idea behind it, and the promise of freedom and fairness that it carried, was fascinating: Neighborhood members may buy everlasting “parcels” contained in the digital world and construct no matter they needed on them. Whereas Instagram and YouTube had been extracting worth from creators, Decentraland promised one thing completely different – an opportunity for neighborhood members to share within the platform’s success. As userbase and exercise grew throughout the platform itself, your digital actual property would achieve worth as a media property. You were not only a person; you had been an proprietor.
In these early days, it created one thing magical. Land house owners grew to become fanatically passionate evangelists for the platform – actually purchased into its success.
These digital pioneers gave the whole lot to assist the platform succeed, with a degree of devotion that cash may by no means purchase and engineers may by no means construct.
Each week, the neighborhood gathered for city halls to debate and vote on necessary platform selections and funding. Standing in these digital assembly areas, it felt like being one of many founding fathers of a brand new digital nation. We weren’t simply early adopters on another person’s platform – we had been settlers, working collectively to construct one thing unprecedented on pixelated soil.
The imaginative and prescient was stunning. The execution? Nicely, that is the place issues get fascinating…
The Digital Land Increase That Grew to become a Bust
The imaginative and prescient for digital land was all about possession, permanence, and fairness. The truth? A speculative gold rush that left the world barren.
As land costs skyrocketed, it grew to become more and more tough for precise builders to entry property. In the meantime, lots of the individuals who did personal land did not have the time, expertise, or imaginative and prescient to develop on it. As an alternative of thriving digital neighborhoods, massive parts of Decentraland remained empty – digital ghost cities owned by buyers who by no means meant to contribute.
Maybe a greater strategy would have been to grant land to creators based mostly on imaginative and prescient and contributions, much like how MANA grants had been distributed. By tying possession to participation and imaginative and prescient somewhat than hypothesis, Decentraland may have ensured that those that constructed worth on the earth had been additionally those who owned it.
Or, maybe Decentraland’s product workforce may have prioritized a land leasing market or fractionalized possession instruments, in order that land house owners may join with motivated land builders. As an alternative, the platform ended up with the worst of each worlds: creators with out land, and landowners with out creations.
The Reverse Community Impact: How Decentraland Made Itself Smaller
Profitable platforms thrive on community results. The extra folks use them, the extra priceless they grow to be. Roblox, LinkedIn, Fortnite, Fb, Amazon, Spotify and each different class defining digital platform that you can imagine all comply with this sample: new customers create content material, which attracts extra customers, which inspires much more content material creation.
Decentraland, nevertheless, carried out insurance policies that actively labored in opposition to community results. Excessive land prices prevented new creators from getting into. Larger $mana costs meant costlier publishing charges for wearables creators on Decentraland’s market (extra on that later.) A scarcity of incentives for customers to construct connections on the platform meant fewer customers had been on-line at any given time. And since experiences weren’t centralized or curated successfully, new customers typically discovered themselves wandering aimlessly by way of empty areas. As an alternative of a self-sustaining flywheel of progress, Decentraland created a vicious cycle of decline.
A more healthy mannequin would have targeted on decreasing friction for brand new customers and builders. Offering incentives for engagement, reducing the limitations to creation, and making certain that new guests may simply discover energetic communities would have prevented the sluggish bleed of customers who tried Decentraland as soon as and by no means returned.
The UX Catastrophe: Dropped into the Void
Think about you are visiting a brand new metropolis for the primary time. You step off the practice, anticipating some type of steerage—indicators pointing you to completely different districts, suggestions on the place to go. Now think about as an alternative that you just’re dropped into the center of a chaotic rush-hour crowd with no map, no native suggestions, and no concept the place to begin. That was Decentraland’s onboarding expertise.
New customers had been unceremoniously dropped into Genesis Plaza, a chaotic hub that provided no clear steerage. There was no onboarding expertise, no curated suggestions, and no introduction to energetic communities.
Decentraland may have simply improved their onboarding by guiding customers towards bustling communal hubs, both contained in the platform and even on widespread DCL servers inside Discord. They may have provided academic assets on wearables and experiences by way of a information library, or created personalised onboarding journeys based mostly in your pursuits. On the very least, they might have scrapped Genesis Plaza fully, burned its reminiscence from the archives, and changed it by routing newly created accounts on to their occasions web page. As an alternative, new guests had been left to fend for themselves—and most by no means got here again.
All of this ladders again to 1 factor—dangerous product technique. From the soar, Decentraland’s dev workforce ought to have prioritized its efforts on discovering DCL’s magic quantity—the important thing motion or expertise that considerably elevated the probabilities of person retention. For instance, within the early days of Fb, their product workforce famously found that when new customers linked with seven pals inside ten days of signing up, they had been considerably extra prone to stick round.
This “seven pals in ten days,” magic quantity grew to become a guiding onboarding design precept for them. It grew to become their northstar that they targeted their product growth technique round. And consequently, they mastered their onboarding UX. In DCL’s case, whether or not it was attending a stay occasion, becoming a member of an energetic neighborhood, or customizing an avatar, figuring out this metric and designing the onboarding UX round it may have dramatically improved engagement and retention.
Failing the Creator Economic system: A Missed Alternative
Decentraland’s biggest asset was its scene, a bustling neighborhood of builders, designers, and occasion organizers. However as an alternative of nurturing this ecosystem, the platform persistently sidelined them.
Throughout main occasions like Metaverse Vogue Week, Decentraland’s single primary focus was recruiting, servicing, and spotlighting big-name manufacturers. In some ways, it appeared like they seen the very presence of those world corporations in DCL as the last word validator of their platform’s success, and consequently, they offered their branded activations as the principle points of interest of those tentpole occasions. Nevertheless, their activations had been typically static and uninspired.
In the meantime, community-driven style reveals—which featured the creators and collectors on the coronary heart of the platform’s rising style scene—had been pushed to the outskirts, invisible to most guests. The identical factor occurred with the Metaverse Music Pageant: main acts had been booked, however the neighborhood artists and expertise designers who had been the lifeblood of Decentraland had been handled as an afterthought.
To be clear, I’ve no problem with massive manufacturers. Fairly the alternative. In actual fact, I really helped oversee a few of the largest Decentraland campaigns and activations over time. And with out exception, essentially the most profitable ones at all times tapped creators and neighborhood leaders who had been invited to collaborate with the model as a real accomplice in creating their expertise. In instances like Metaverse Vogue Week, Decentraland missed an enormous alternative to collaborate with its prime neighborhood creators, integrating them into high-profile model occasions.
As an alternative, it selected to cater these essential moments completely round outdoors firms that did not perceive the tradition—and in doing so, it alienated the very individuals who had made the world really feel alive. On the flipside, manufacturers who had been investing within the platform throughout these tentpole occasions missed out on large potential ROI by way of connecting with the tradition and precise scene that inhabited it.
Newcomers getting into the platform for the primary time spent their go to awkwardly wandering round these 3D branded areas, realizing nothing of the digital ragers on the DollHouse, elaborate builds crafted by DCL’s premiere builder neighborhood, Final Slice, or the numerous inventive minds designing digital style and artwork throughout the platform.
The Wearables Market: A Monetization Misstep
Digital style is a multi-billion-dollar trade. It was a very powerful asset in DCL’s financial system. Decentraland had the chance to construct a thriving market for digital wearables, however its strategy was deeply flawed.
As an alternative of taking a share of gross sales, Decentraland charged creators upfront charges within the a whole lot of {dollars} simply to checklist their objects. This discouraged new designers from collaborating and created an pointless monetary barrier to entry. Worse, {the marketplace} had no efficient curation system. This resulted in an oversaturated inefficient discovery expertise. There was no homepage that includes the most effective work, no method for newcomers to gauge what was priceless, and no structured discovery expertise.
Different platforms, like Roblox and Fortnite, have excelled in digital style by specializing in accessibility and visibility. They take transaction charges somewhat than charging large itemizing charges, making certain that the most effective creators aren’t priced out of collaborating and the most effective content material rises to the highest organically. Decentraland did not comply with this mannequin, and consequently, its wearable financial system by no means reached its full potential.
The Takeaways: Tips on how to Construct a Thriving Digital World
Decentraland was an enormous stunning experiment. On reflection, it’s a cautionary story for all future metaverse platforms. As AI-driven digital worlds like Hyperfy and platform giants like Roblox proceed to develop, there are key classes to remove:
1. Do not let hypothesis kill participation. Reward creators based mostly on contributions, not simply monetary funding.
2. Community results are the whole lot. Make it straightforward for brand new customers to have interaction, create, and share.
3. Onboarding issues. Information customers into related communities and experiences earlier than you lose them for good.
4. Assist your creators. In case your platform thrives on user-generated content material, deal with your greatest creators as companions, not afterthoughts.
5. Monetize well. Transaction charges encourage progress; excessive upfront prices discourage it.
The metaverse is not lifeless. It’s simply early. However the subsequent technology of digital platforms must study from Decentraland’s errors—or danger changing into a digital ghost city.
