Digital transformation continues to provide great opportunities for pioneering companies. Technology has come a long way from static websites to today's 3D navigation, generating higher quality web experiences. But this is just the beginning. The real Internet revolution is yet to come and we are absolutely sure that it is going to be brought by the Metaverse.
Despite the fact that, what is currently being considered as Metaverse uses, in many cases, the same technology that we already had 10 or even 15 years ago, it has become a concept that is generating a lot of repercussion and is attracting the interest of digital companies since the pandemic, and more specifically since November 2021 when Marc Zuckerberg announced the name change from Facebook to Meta.
Following this, all industries have been trying to establish new forms of on-screen interaction with their customers and their community through the virtual environments of the Metaverse, as a new source of revenue and visibility for their businesses. A way to innovate and differentiate themselves to position themselves above their competition.
And one of these virtual environments that companies, from multiple sectors, have entered is Decentraland. In this article we are going to show you everything you need to know about Decentraland; its economics, its business possibilities and examples of companies like Repsol, Samsung or Coca-Cola to inspire you.
What is Decentraland?
Decentraland is currently the most popular and decentralized Metaverse virtual environment with the greatest impact among the public, achieving one of the highest market volumes in transactions per day. In addition, its decentralized nature has also attracted a large number of companies that intend to use the 3D platform as a new method of promotion with young audiences.
We can say that Decentraland combines many disciplines; we can consider it a game due to its gamified nature, we can consider it a community due to the large number of users it has managed to mobilize and, in turn, we can even consider it a business due to the companies and brands that are taking advantage of the opportunity and investing in it.
It is a virtual environment in which major events have also been held, managing to attract the attention of important and influential personalities. In addition, it is an open, open source and decentralized platform that lives on the Ethereum blockchain. And for this reason, it has its own cryptocurrency, NFTs, avatars, plots, cities, stores, embassies, and everything you can imagine.
The ungoverned platform is sustained thanks to the economy that is generated through the buying and selling of NFTs or Tokens, which are used as exchangeable or saleable objects in Decentraland's own Marketplace. In this aspect, within Decentraland you can find objects such as accessories for the avatar, predesigned skins, and even emoticons to interact with other users.
For there to be a solid and sustainable economic flow in this ecosystem it is essential that there is a purchase and sale or exchange of objects with the environment's own currency, in this case MANA, but we can also introduce other types of currencies that the platform accepts as DAI.
The most interesting thing about this ecosystem is that the users themselves through the Decentraland Foundation are the ones who manage and drive the Metaverse platform autonomously, they are the owners of the open standards of the virtual environment, its rules and its evolution.
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History of Decentraland
The project to create Decentraland began in 2015 from the hand of a group of Argentine engineers led by Esteban Ordano, Manuel Araoz and Yermel Jardi.
However, it wasn't until 2017 when they released their first Beta version which boosted the economics of LAND which cost at that time up to $20. These first years were sustainable thanks to the ICO (Initial Coin Offering), with which $26 million was raised and exchanged into MANA tokens. This exchange of value drove the development of the Decentraland Foundation making it a reality and thanks to which the platform was able to retain 20% of the initial token offering, the intellectual property rights and the Decentraland website.
After the start of the ICO, Decentraland launched its own DAO (Decentralized Autonomous Organization) which hands over to the users the management of the project, thus the platform took the step towards a system that would operate completely autonomously.
The official worldwide launch of version 1.0. of the platform was in 2020, and since then it has advanced by leaps and bounds thanks to the most relevant events such as the "BOOM" of the NFTs between 2020 and 2021, the "discovery" of the Metaverse at the end of 2021 or the celebration of events with great repercussion such as the Metaverse Festival, which lasted 4 days and where you could see world-known artists such as, Deadmau5, Aluna George or Alison Wonderland, or even the Metaverse Fashion Week, in which companies such as Dolce& Gabbana or Estée Lauder.
These factors influenced the environment getting that currently in 2022 have been sold all of the 90,601 plots, coming to cost some around $ 100,000. This means that the only option to buy land now is on the secondary market, through transactions between the users themselves.
Metaverse economy in Decentraland
The power of the token economy allows us to move from the real world to the virtual world any type of value, as well as decentralizing its control.
Decentraland hasthree differentiated tokens to manage its economy. The main one is the MANA token, created as a governance token with the ideal power for the purchase of all virtual objects in the virtual environment, including the 90601 parcels.
The token was created following the ERC-20 standard of Ethereum, so it has the easiness to adapt and integrate into the DeFi, DEX and other Apps platforms within Ethereum. The amount of these coins will always be limited, as this way, the value of the coin is made to increase due to its scarcity.
The second token is called LAND and is a Non-Fungible Token (NFT) that follows the ERC-721 standard. This token is used to identify each of the 90601 parcels uniquely and give them value and ownership for users who purchase them. To finalize the purchase of the parcel using the LAND token it is necessary to make an exchange of MANA tokens to LAND tokens. By this action, the user burns the MANA tokens, making the token more scarce and valuable.
Lastly, we have the token LAND ESTATE, the third token that we can use in Decentraland and that serves basically to make it possible to associate two or more LANDs that are owned by the same owner and that are together. This token facilitates the management of large properties and allows for larger constructions by combining several parcels.
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How does Decentraland work?
Governance and evolution of the virtual environment
The governance of the Decentraland project is done through a Decentralized Autonomous Organization (DAO). This means that the Decentraland community itself controls and directs the direction of the platform's development and decides how the virtual environment is updated through referendums and voting.
In order to participate in voting, users will need to have in their possession MANA or LAND tokens, in order to exercise their vote. The Decentraland DAO was created using Aragon Network Token (ANT) technology, a platform that works on the Ethereum blockchain, specifically designed to create this type of decentralized governance systems.
Accessibility and compatible devices
The construction of Decentraland is built on WebGL and Web3.0. technology, so its virtual environment is specifically created to be able to be executed directly in web format. This means that any user can access Decentraland from any computer with minimum requirements and a recent web browser, without the need for downloads or installation of external programs or software.
In addition to web access, not long ago, the Decentraland Foundation launched a first beta version in desktop format. This version can be downloaded from the official Decentraland website and its use solves some performance problems of the virtual environment by allowing the computer to use its GPU resources more efficiently.
What if we want to access Decentraland from mobile devices? At present there is no mobile version of Decentraland although according to the 2022 manifesto of the Decentraland Foundation it is being worked on and it is expected that during this 2022 we will have news about the first beta version for smartphones and tablets.
And not only this desktop version and the mobile version are being worked on, but it has also been announced from the foundation that it is experimenting with the possibility of developing a version for Virtual Reality, although this version is less of a priority and there is not even certainty that it will finally see the light for the public and the Decentraland community.
Technology and Architecture
The Decentraland protocol is composed of three types of layers differentiated by the functionality they perform:
- Consensus Layer: the consensus layer tracks land ownership or (LAND) and the content of it through a smart contract on the Ethereum blockchain.
- Content layer: the content layer uses a decentralized distribution system to visualize the 3D content of virtual worlds.
- Real-time Interaction Layer: as its name suggests, it provides P2P or peer-to-peer network connections (reference for communication between applications, without servers in between) so that users have the option of interacting with each other.
Categorization of collectibles in Decentraland
Another key point of the Decentraland virtual environment platform, is its categorization of collectibles, which can be classified into:
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Commons: for quantities equal to or greater than 100. 000 Units.
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Rare: for quantities not exceeding 10. 000 Units.
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Rare: for those with a stock no greater than 5. 000 Units.
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Epic: for quantities not exceeding 1. 000 Units.
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Legendary: for those with a stock not exceeding 100 Units.
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Mythical: for quantities with a stock not exceeding 10 Units.
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Single: for those where only one unit exists.
Examples and success stories of companies in Decentraland
Heineken Silver Digital Brewery
The brewing company from the Netherlands created the first brewery in the Metaverse in Decentraland. A virtual space in which, in the form of a parody, the company claimed to have created the first digital beer, Heineken Silver.
This action became even more relevant some time later, since the introduction of Heineken in Decentraland was part of the campaign to advertise this new beer, but this time in the real world, under the slogan: Straight from the Metaverse.
Repsol Tech Summit 2022
Samsung Store 837X
Samsung, the South Korean brand manufacturer of technological devices, launched earlier this 2022 its new virtual space in Decentraland.
This first step of Samsung in the Metaverse was dubbed "Samsung 837X", and originated as a reference point to connect the brand with the more digital audience through virtual items and NFTs.
The Samsung virtual space is divided into three distinct scenarios. On the one hand, we have the Connectivity Theaterwhere Samsungmakes presentations and exhibits the brand's new products.
On the other hand, we have the Sustainability Forest which consists of a nature stage that reflects and collects the company's sustainable initiatives.
Finally, this virtual space also features the Personalization Space in which Samsung allows to acquire 3D objects and wearables to customize our Decentraland avatar.
Coca-Cola Virtual Experience
The world-class company Coca-Cola, has also introduced its most recognized products and items in the virtual world.
In this way, both its logo, badges and bottles, transport trucks, coolers and even vending machines have been converted into 3D objects and some of them have even been offered for sale in NFT format on the Decentraland marketplace.
At the launch of this virtual space, the brand held an event on the rooftop of its own building in Decentraland. A new example of how the paradigm of the brand-consumer relationship is changing, giving the possibility for any user to participate in this type of exclusive events through the Metaverse.
Subsequently, in a similar way to the Heineken Silver, Coca-Cola decided to launch a new product "created" in the Metaverse and transferred to the real world. This is how the new Coca-Cola Zero Sugar Byte was born, with pixel flavor and 0% sugar.
Santander X Global Challenge
Decentraland Metaverse Fashion Week.
The first Metaverse Fashion Week concluded the participation of some of the best fashion brands and designers worldwide, such as Dolce&Gabbana or Estée Lauder. This type of event embodies the rise of the virtual market within the fashion industry, which step by step continues to innovate, relying on the most innovative formats.
According to the creative director of the Decentraland Foundation: "Decentraland has been at the forefront of digital fashion since the launch of the first virtual clothing collections. Since then, creators and brands have explored all technical boundaries as well as different clothing styles. Together, they have created a booming economy, which we can count at over $1 million in avatar clothing sales, over the past year."
Virtual Amnesia Ibiza
Amnesia Ibiza, in collaboration with Decentraland Games, created the first virtual nightclub in the virtual world of Decentraland. This virtual space has three zones to interact.
The first of the recreated zones is the iconic club terrace, where users can enjoy the music and live sessions of the DJs of the real disco located in Ibiza.
The second area created within the virtual club is outdoors and has been named Amnesia Arena. A place created for concerts and other special shows.
Finally, the third area has a museum where users will find information about the history of the club, exclusive NFTs and merchandising.
The virtual space, in addition, has a place exclusively aimed at the exhibition and sale in NFT format: the store is full of flyers, industry releases, DJ autographs and clubber clothing.
To finish, the club also has its own token called DJenerates in NFT format, hosted on the Ethereum blockchain. This token serves as digital artwork and as a method of membership to Amnesia Ibiza's virtual community.
