Decentraland Is a Billion-Dollar Sinkhole

User counts and market value don’t line up in Decentraland: there are only 23 avatars in the billion-dollar metaverse.

User counts and the market value don't line up in Decentraland: There are only 23 avatars in the billion-dollar metaverse.

A year ago, as Facebook moved to rebrand itself as Meta, the Metaverse idea generated a lot of buzz. Talk of dream factories, virtual worlds would be created—promising prospects in a lockdown-dominated era. But so far, what’s been achieved is underwhelming. Decentraland’s user figures also reveal that the blockchain metaverse is glaringly empty.

Not Much Is Happening in Decentraland

"Push the boundaries of your imagination"—the marketing slogan is on point, but probably not as intended by Decentraland’s developers.

The amount investors will spend on a virtual parcel in Decentraland could surpass most people’s imagination. For example, the $913,000 paid for a virtual parcel about the size of ten football fields.

When it comes to user numbers, the imagination limits are still being tested. There are currently only 23 users in Decentraland, but according to Dappradar, there were 516 in the last 30 days: an average of 17 per day.

Even if you count only users who also interact with smart contracts—for example, trading items—and Dapp.com reports 280 users per day, the numbers still lag behind expectations. And also below market value.

Fully Overvalued?

The market cap of Decentraland's cryptocurrency MANA is $1.2 billion—only The Sandbox is currently slightly larger among Metaverse projects.

The market cap wasn't driven so much by the 23 active avatars. Mostly due to media-savvy investments by firms looking to establish a digital foothold in the virtual 3D world, retail interest in the cryptocurrency rose.

Samsung has opened a branch, JPMorgan a lounge, Barbados an embassy, and Times Square has also landed in Decentraland: From the outside, it looked like the blockchain metaverse would become one of the virtual hubs where culture, commerce, and social life merge.

So far, Decentraland hasn’t been able to meet these expectations—and neither have investors, not to mention gamers.