UPDATED! Decentraland and Somnium Space: A Tale of Two Auctions

Today is officially the last day of the week-long land auctions for the blockchain-based virtual world Somnium Space. You can check out the status of the auctions using their up-to-date land auction map (which might take a minute or two to load on slower computers).

Red parcels were those which were claimed before the auction as an incentive for investors in their previous crowdfunding initiatives (approximately 500 parcels in total). There are 4,500 parcels up for grabs this week to the highest bidder. Yellow parcels are those which have bids in the auction. Green parcels are those which have not been bid on.

Here’s what the map looks like (in two sections, top half and bottom half), as of today around 2:00 p.m. Central Standard Time:

As you can see, there’s a veritable sea of green parcels on the Somnium Space map, and not a lot of yellow ones. Compare this to the bidding frenzy that occurred in both of Decentraland’s previous land auctions, in which almost every single parcel of land was sold.

The team over at Somnium Space must be feeling a little surprised by the (relative) lack of response from bidders, and I must admit that I am feeling somewhat surprised myself.

The cost of the Somnium Space land parcels currently up for auction varies from 0.3 ETH to 3 ETH (US$54 to US$540), compared to the cheapest parcel of LAND available on the Decentraland LAND Marketplace at 12,900 MANA (US$412). If course, some LAND is much, much more expensive than that!

And let’s compare feature sets between the two products: what you can do in Somnium Space compared to Decentraland. You can actually build using the in-world building tools in Somnium Space, which offer you much more functionality than the somewhat limited Decentraland Builder, which is not really an in-world building tool at all, but rather an external website. (Someone has already built an experimental in-world building tool in DCL, but it is rather primitive.)

You also have better, more realistic graphics in Somnium Space than in Decentraland. Let’s compare two scenes, one of Somnium Space, and one of Decentraland:

Somnium Space
Decentraland

You can see more pictures of the new Somnium Space 2.0 here. Decentraland is hobbled by the significant content constraints placed on its builders, and cannot currently hope to match SS’s scenes.

So, why aren’t people (yet) flocking to Somnium Space as they did to Decentraland? Why aren’t people choosing to spend their money on cheaper virtual land that offers much greater creative possibilities?

One of the issues may be timing. Decentraland started off with an Initial Coin Offering (ICO) at the height of the cryptocurrency mania, which generated a lot of money (millions of dollars) and a lot of interest because it raised so much money. Somnium Space started off with less of a bang, as a non-blockchain project which had blockchain added afterwards. At the time of Somnium Space’s land auction, the bloom has definitely come off the rose for blockchain and cryptocurrencies, which might explain the relatively sedate pace of bidding compared to the frenzy over Decentraland in their two previous LAND auctions.

Another reason might be that Somnium Space is still a relatively new and untested platform (particularly the new, contiguous version 2.0 landscape), and potential investors might be cautious, wanting to wait and see what the early pioneers are going to do with the land they bought. As someone said on the RyanSchultz.com Discord channel in talking about thos week’s Somnium Space auction:

Unless the worlds become bustling with life and events and creators and MONEY, nobody will ever want to buy more land (only if they are still sick with blockchain hype). Buying an abstract piece of “land” in some obscure world that might or might not become popular is a gamble, and the only winning party here is the House, aka the creator.

Decentraland may not compare that favourably to Somnium Space in terms of technical features, but it does hum with money—the millions of dollars that MANA and LAND speculators invested ensure that DCL gets the white-hot spotlight of more attention, including mainstream news media coverage from places such as CBC Radio and the BBC. Once a project gets that level of coverage, it almost takes on a life of its own. And Somnium Space will likely need to get that kind of attention, that kind of coverage, in order to succeed. (I mean, I’m covering it, but I’m just a niche blog with 600-6,000 viewers a day! That’s peanuts.)

And, as we have seen with failed blockchain-based virtual world projects such as Virtual Universe, simply having better features alone does not guarantee success. Virtual Universe supported VR, had simply stunning realism in their world, and some truly innovative in-world creation tools, but the company was simply unable to entice the public to invest in their project’s cryptocurrency, and they folded.

It will be interesting to watch as both Somnium Space and Decentraland evolve and adapt to circumstances in future. I wish both companies every success in their endeavours, and good luck! They will both need it. (Remember, Facebook is planning to launch a social VR platform and a cryptocurrency next year. Don’t think for a moment that they haven’t considered combining the two in some fashion.)

UPDATE 7:34 p.m.: I wanted to add a time-lapse video of Somnium Space’s in-world building tools in action, since not a lot of people have had an opportunity to try them out yet:

I find this to be pretty impressive!

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Decentraland’s Second Land Auction Has Started

Decentraland 14 Feb 2018

Decentraland has announced that the unsold plots of land left over from their first auction are now up for grabs to the highest bidder, between now and Christmas. The virtual parcels of land are 10 metres by 10 metres square, and called, simply, LAND. In the past, prices for LAND have gone as high as US$120,000 each in frenzied bidding wars, the prices being driven up by eager cryptocurrency speculators hoping to make a profit.

In an announcement posted on Dec. 10th, the company states:

The LAND Auction will run until Sunday, December 25th, 2018.

Ever since the first LAND Auction last December, people have been eagerly anticipating the opportunity to claim some of the unsold, unowned LAND remaining in Genesis City. Even with the 34,356 parcels sold last year, there are still over 9,000 up for grabs!

We are extremely excited to kick off this next auction, and want to thank the entire Decentraland community for your continued support and enthusiasm. This is an exciting next step for the platform, and we look forwarding to building something incredible, together.

For additional details, and answers to some of the common questions we’ve received, keep reading!

Where do I access the auction?

The auction will be held right in the Decentraland Marketplace, at market.decentraland.org/auction. It’s also easy to access the auction through our partner’s mobile dApp browsers, like StatusimToken, and Trust!

How do I participate?

Simply create a wallet with MetaMask, Mist, or use a Trezor hard wallet, and ensure that you have sufficient funds in either MANA or one of our partner project’s ERC20 tokens.

You can also use a variety of mobile wallets, like Coinbase WalletTrust Wallet, and imToken!

We have two video tutorials showing how to log in, manage your tokens, select the parcels you want to buy, and complete your transaction! Check them out here:

Can I bid for multiple parcels at once?

Yes! In fact, the second auction is a wonderful opportunity to secure an estate, or expand your current holdings to include some of the adjacent unowned space.

Contiguous estates make it possible to host larger, more complicated scenes and experiences. You will be able to purchase up to 20 parcels per transaction.

When will I receive the parcels I buy in the auction?

Once the transaction for your purchase has been processed, you will receive your LAND immediately. The transaction must still be mined by the Ethereum network which may take several minutes, as with any normal LAND transfer on the Decentraland Marketplace.

Virtual land will be sold in the fashion of a Dutch auction:

How is the price for each parcel determined?

We are using a Dutch auction, in which all available parcels are started at the same price of 200,000 MANA. This price is continuously and progressively lowered, until a final price of 1,000 MANA is reached on the last day of the auction. You can read more about how the price is set, and the rate at which it’s lowered in this blogpost.

Only two days into the auction, there’s still lots of LAND available to bid on, as prices are still pretty high (currently, 48,479 MANA each, which works out to US$2,613). Bids can be placed using Decentraland’s own cryptocurrency, MANA, or any of the following ERC20-compliant tokens:

  • Maker (MKR)
  • Dai (DAI)
  • Binance Coin (BNB)
  • Kyber Network (KNC)
  • Zilliqa (ZIL)
  • Riplo Credit Network (RCN)
  • Aelf (ELF)
  • Status (SNT)

(Don’t ask me to explain any of this to you; it’s all just gobblegook acronyms to me!)

As I have warned before, do all your homework before investing a single cent in any cryptocurrency and any blockchain-based virtual world. Caveat Emptor!