Editorial: The Licensing of Wearables in Decentraland Could Lead to a Creative Bottleneck

Watching the various blockchain-based virtual worlds evolve, and comparing and contrasting their decisions on how they wish to operate with longer-established, non-blockchain-based virtual worlds such as Second Life, has proven to be quite interesting.

Many of the eager cryptoinvestors who have bought NFTs (non-fungible tokens) such as virtual land, avatar names, and avatar wearables in places like Cryptovoxels, Decentraland and Somnium Space like to tout that their possessions cannot be taken away from them, or censored, revoked or restricted by any central authority, even by the companies running the platform.

For example, they point out that if a user runs afoul of Second Life’s Terms of Service, they can have their account suspended and lose all their virtual possessions. In contrast, the adherents of blockchain-based virtual worlds claim that they can evade such restrictions by simply selling their items on the open market (one such example is the popular OpenSea collectibles marketplace).

Limited-edition wearables (i.e., avatar clothing) which are bought and sold on the blockchain are already proving quite popular both in Cryptovoxels and Decentraland, but the two platforms are taking distinctly different approaches in their implementation. While Cryptovoxels is using the open market approach already proven as successful in places like Second Life, Decentraland seems to be opting for a more restrictive licensing approach, which at first glance seems rather at odds with its “open, decentralized” advertising.

Forcing creators to sign licenses to be allowed to make and sell content, and having investors vote on who will and will not be allowed to create content, stifles the creativity of an free and open marketplace, and seems to go against the “decentralized” nature of Decentraland.

According to an announcement made Monday on the official Decentraland blog:

The creation of wearables for Decentraland is a complicated process requiring a lot of support. To ensure user-generated wearables look great and function properly in Decentraland we will need to make the tools to support this process.

It will take time to develop the workflow and build the equivalent of an SDK and Builder tool for wearables so during this process we will work with small teams of developers from the community that we are confident can deliver quality products and the feedback and communication we need.

Once the workflow is in place and the quality at the high level you’d expect, we’ll implement Stage 2 of the initiative.

This involves opening up the application to create wearables to the entire community. It will take the form of licenses being granted to teams and individuals by the community, through the DAO.

The DAO (short for Decentralized Autonomous Organization) is a relatively new mechanism to allow Decentraland’s investors to vote “on the policies created to determine how the world behaves: for example, what kinds of wearable items are allowed (or disallowed) after the launch of the DAO, moderation of content, LAND policy and auctions, among others.” (More information on the DAO can be found here.)

I have seen a lot of virtual worlds come and go in my time, and one thing that I can tell you is this: imposing any kind of licensing on the creative process can lead to a creative bottleneck, and potentially drive away content creators.

One reason that Second Life continues to be the most commercially successful and popular virtual world, is that Linden Lab had, very early on, decided to create a free and open market, where creators could set up stores and sell their content to whoever was willing to buy it, retaining the rights to their creations and earning income.

Linden Lab has never licensed stores or creators in Second Life, and never will. The workload associated with such an enterprise, in a market with many millions of items for sale, would be impossible to scale upwards as the economy grew. Yes, Linden Lab will step in if a DMCA copyright complaint is received from a competitor, and they will also shut down stores which sell illegally-copied content when it is pointed out to them, but otherwise, they very wisely stand aside and let the market decide what people want.

And while stores open and fold with astounding regularity in Second Life, the fact that they have approximately 900,000 regular monthly users means that they must be doing something right (even if it was all a happy accident which to date still has not been replicated by any other platform). Those virtual worlds that look on with envy at SL’s success, and wish to snatch that mantle of success for themselves, need to pay attention to what works, and what doesn’t.

It would appear that, going forward, Decentraland will be focusing on a licensing process for all avatar wearables, letting its investors vote, instead of letting anybody who wants to, simply create and sell avatar clothing and accessories for the DCL marketplace. While some see this as a necessary effort to impose and refine a high-quality workflow, others see it as a means to restrict market access, and reward those who have the deepest pockets and the best connections. (Some commentators have complained about the opaque process by which the initial five wearables creators were chosen.) Time will tell who’s right and who’s wrong here.

As I see it, Decentraland already has some daunting obstacles which stand in the way of attracting and retaining your average, non-crypto virtual world user to their platform: the many steps required to set up a crypto wallet and purchase ETH and convert it to MANA; the need to purchase even things as basic as a username; and the prohibitively expensive virtual land, its price driven up by speculators. Placing licensing restrictions on who can create items such as avatar wearables could become another such obstacle.

Decentraland should study the history of its competitors carefully, to glean a few pertinent lessons on how to run and grow a virtual world. There’s no need to reinvent the wheel here, folks.

Photo by Jon Cartagena on Unsplash
Liked it? Then please consider supporting Ryan Schultz on Patreon! Even as little as US$1 a month unlocks exclusive patron benefits. Thank you!