Mario Gabriele Does a Deep Dive into the Start-Up History, Current Value, and Potential Future of Decentraland

Mario Gabriele (image source)

Mario Gabriele is the founder and editor of The Generalist, a self-described “free newsletter for deep thinkers, serious builders, and imaginative investors”, with over 53,000 subscribers. On January 9th, 2022, Mario wrote a long and wide-ranging article (what he calls one of his “briefings”) about one of the very first blockchain-based virtual world projects, Decentraland (which is, of course, of interest to me!).

I found what Mario had to say so interesting that I wanted to write this blogpost to bring wider attention to his article, which os titled Decentraland: The Metaverse’s Early Mover. One of things I found unique about this article is that Mario really does his homework, delving into the early history of Decentraland and interviewing many key people associated with the project in one way or another. Also, he isn’t afraid to level criticism of the project. This is not some breathless fan-boy take; I enjoyed his writing because it is a multi-faceted, critical inspection of the Decentraland project to date, combined with some analysis of what it all means, including a few educated guesses about the future. And even if you are not all that interested in Decentraland per se, he also touches on other worlds, such as The Sandbox. I learned a lot from reading this, and I suspect you will as well.

I’m going to suggest you to go over to The Generalist and read it in full, but I will pull out and comment on a few quotes which interested me. For example, Mario does a better than anybody else I know in painting a picture of what the early days of the Decentraland start-up were like:

In 2011, Manuel Araoz was a computer science student at ITBA, a university called “Argentina’s MIT.” As part of a cryptography class, he discovered Satoshi Nakamoto’s bitcoin whitepaper. Argentina’s past two decades had been marked by economic volatility and rapid currency devaluation, giving tangible power to Nakamoto’s words. Araoz was transfixed…

Araoz set about trying to make his dent in the new realm, launching “Proof of Existence” (POE), billed as the “first-ever non-financial blockchain application.” POE acts as a notary, allowing anyone to “prove” a document exists by adding an encrypted “digest” of it to the blockchain, where it is timestamped. As its site notes, this is the “first online service allowing you to publicly prove that you have certain information without revealing the data or yourself.”

Araoz also joined BitPay, then a bitcoin payments business. As a technical lead, his remit included opening an office in Buenos Aires. He picked a two-story house in Palermo Hollywood. 

Populated by BitPay engineers, friends from ITBA, and other early crypto obsessives, “Voltaire House” quickly became a place for deep thinkers to gather. In researching this piece, I got to speak to several former residents and visitors, including Esteban Ordano, one of Decentraland’s founders.

Voltaire House became the incubator for a number of blockchain projects. In 2015, Voltaire House’s resident purchased their first VR headset, an HTC Vive, which “opened their eyes to the potential of spatial experiences”. From this sprung the idea of Decentraland.

Mario discusses Decentraland’s crazy Initial Coin Offering (ICO), and in particular discusses how Mark Zuckerberg’s keynote address in October 2021 marked a significant turning point for Decentraland and countless other projects, writing:

From one month to the next, Decentraland’s MAUs nearly tripled. The price of MANA went very nearly vertical, jolting from $0.75 to $3.56 and eventually closing in on $5.50. 

(image source)

Decentraland’s fully diluted market cap jumped from $1.6 billion to more than $7 billion in four days, effectively increasing its size from 1-800-FLOWERS to The New York Times over the equivalent of a long weekend. Since that leap, MANA has retreated, along with many other tokens, but it is still multiples higher than before Meta’s announcement. 

One of the best parts of Mario’s article is where he creates an avatar and goes exploring!

Over the past week, I’ve used Sutherland [the name of Mario’s avatar] to tour as much of Decentraland’s world as possible. We’ve fallen down the fountain in “Genesis Plaza,” hit up the casinos in Vegas City, stumbled across a Pride Parade, mined fallen asteroids in exchange for gems, gone to the stables, gawked at swirling spiral homes, browsed art at a Sotheby’s gallery, and tried to fly a dragon. We made it about ten feet before crashing into a wall. 

I have also walked around empty lots and whole neighborhoods without a soul in sight. At around noon on a Tuesday, I stood in Frankie’s Tavern, a virtual dive bar, watching a music video alone. After hearing about District X, Decentraland’s red-light district, I fruitlessly searched for brothels that apparently exist. I hoped to interview the most modern members of the world’s oldest profession. (How does this work? What do people buy? Is VR involved? Is the money good?). Though a failure, I did stumble across “Waifu HQ,” a confusing monument to female anime characters featuring a scantily clad breakdancer.

I had a good chuckle at Mario/Sutherland trying to find escorts in Decentraland! Oh, honey, if you are looking for sex in Decentraland, you are going about this all wrong! 😉

He goes on to write:

Were these outings enjoyable? Sort of, though spending time in Decentraland feels more interesting than fun, per se. Despite spending several hours in the world, I didn’t find a game or activity that captured my attention for more than a few minutes. There is no addictive dopamine vortex pulling me back in against my better judgment. 

I suspect I would feel differently if I were an enthusiastic or competent gambler. Across my various visits, Decentraland’s casinos were almost always the best-trafficked locations. Decentral Games run many, a startup that has raised a reported $5 million from investors like Digital Currency Group and operates as a DAO. Its locations include Chateau Satoshi, The Aquarium, and the Bored Ape Yacht Club, a riverboat casino. 

The result was that I experienced Decentraland similarly to Las Vegas, interesting as an anthropological study even if not a true pleasure trip. 

The comparison between Decentraland and Las Vegas is very apt!

Mario also talks about companies such as Ed Radion’s Squiggle School, which was founded to help teach people how to create content in both Decentraland and The Sandbox. Ed is quoted by Mario: “We’re all-in on The Sandbox. Their no-code game engine and design tool are easy to pick up, meaning the ecosystem will have more fun experiences than Decentraland…Decentraland struggles to engage non-landowners because their experiences have to be built in production-grade tools (Blender, Unity). Most people don’t have a clue how to do that or have the time to learn how.”

Mario also looks under the hood, talking about Decentraland’s three-layer protocol and peer-to-peer architecture in an accessible, easy-to-understand way. He also discusses the project’s Decentralized Autonomous Organization (DAO):

In early 2020, Decentraland completed one of its initial goals – to hand control of the project over to its community. It did so by formalizing a DAO and handing it power over the essential smart contracts controlling LAND, wearables, the marketplace, and more. If these were ever to change, it would be because the community voted for it, not because a single developer decided it was a good idea. 

Near the end of his report, Mario compares Decentraland to Roblox, talks a bit about Meta, and even namedrops a few competitor platforms already (or soon to be) in operation, mentioning The Sandbox, Cryptovoxels, and Somnium Space (all of which I have written about previously). He adds:

A score more is on the rise, with some oriented explicitly as games and others going after multipurpose use. The first category includes Ember Sword by Bright Star Studios, Meilich’s Big TimeFaraway, and Defi Kingdoms. The second includes NFT OasisNFT WorldsNifty Island, and those that adhere to our real-world maps, like SuperWorld and Upland. Each new project can bring fresh ideas to the task of constructing the metaverse. 

Which means, I have a whole new bunch of blockchain-based virtual worlds to explore and write about!

In summary, Mario Gabriele has provided a well-written, insightful deep dive into the past history, current value, and potential future of Decentraland. If you want to learn more about Mario and his thoughts on a variety of tech topics, you can join his free mailing list via his website The Generalist, or follow him on Twitter (I just did!).

I do have a number of other thinkers whom I have been following on various social media in the virtual worlds, social VR, and metaverse space, and I hope to introduce you to more of these people over time (as well as any new metaverse platforms I come across in my travels!).

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