Building Blocks: How Two Visionaries Laid the Foundations of Decentraland

Decentraland was co-founded in 2015 by Ari Meilich and Esteban Ordano. The project started in Argentina, where both founders were based, and it has since expanded globally. Decentraland is notable for being one of the first decentralized virtual worlds fully owned and governed by its users through a decentralized autonomous organization (DAO). 

Ari Meilich 

Ari Meilich is an influential figure in the blockchain and Web3 gaming space, known for his work in founding and leading innovative virtual platforms. Currently, he is the CEO of Big Time Studios, which he founded in January 2020. He served as CEO and later as an advisor from April 2020 onwards, dedicating seven years to Decentraland’s development. Before Decentraland, Meilich co-founded Benchrise, Inc., a project he led from January 2016 to August 2017. Earlier in his career, he worked as a Market Research Analyst at CRV in San Francisco.

Meilich’s research background includes neuroscience, where he contributed to notable labs, such as the Phelps Lab at New York University. He also contributed to a Nature Neuroscience review on race-related biases while at the Glimcher Lab at NYU. Academically, Meilich holds a Bachelor of Science in Neuroscience from Hunter College of the City University of New York, graduating summa cum laude. He was part of the NIH-funded BP-ENDURE neuroscience research training program. (Ari Meilich)

Esteban Ordano

Esteban Ordano is a well-known figure in the tech industry, particularly for his pioneering work in blockchain and virtual worlds. Ordano’s professional background includes several notable positions. He served as an advisor to Matic Network (now known as Polygon) from April 2019 to January 2021. Before these roles, he worked as a Software Engineer at BitPay, Inc., where he contributed to open-source projects like Bitcore, a JavaScript Bitcoin library, and the Copay Bitcoin Wallet. 

His academic background includes Software Engineering and Information Technologies, from Instituto Tecnológico de Buenos Aires from 2009 to 2014. Ordano also gained hands-on experience as a Software Engineering Intern at Google in early 2014, where he focused on developing tools for multi-device automated testing. Additionally, he spent over four years as a Teaching Assistant at his alma mater. (Esteban Ordano)

The Founding Story

Decentraland’s journey began as a prototype called “Stone Age” that offered users the chance to occupy parcels of 2D land on the blockchain. With the blockchain as a secure and transparent foundation, Decentraland evolved into a fully 3D world by 2017. It was the first platform to use blockchain technology for ownership of virtual property, with parcels of land represented as non-fungible tokens (NFTs) on the Ethereum blockchain. This unique approach attracted significant attention, setting Decentraland apart from other virtual worlds and solidifying its place in the growing metaverse sector. Today, Meilich and Ordano continue to support Decentraland as advisors while the Decentraland Foundation manages operations and strategic initiatives​.

The Meta-Morphosis: A Market Set for Virtual Growth

The metaverse market is experiencing explosive growth, driven by rising demand for virtual experiences in industries like entertainment, gaming, education, and social media. In 2024, the market was valued at approximately $116.74 billion and is expected to grow substantially, reaching an estimated $669.96 billion by 2029. This expansion translates to a compound annual growth rate (CAGR) of 41.83% over the forecast period​. (Mordor Intelligence)

Several factors fuel this rapid growth. The adoption of augmented reality (AR), virtual reality (VR), and mixed reality (MR) technologies has transformed the way people interact with digital environments, making virtual experiences more immersive and lifelike. These advancements have encouraged industries to use the metaverse to offer innovative services, from virtual shopping and gaming to social networking and education​. 

Geographically, North America and Europe are leading in metaverse adoption, with the U.S. being a significant player due to its strong technology sector. However, Asia-Pacific countries, including China, Japan, and India, are quickly catching up, supported by investments from tech giants like Tencent and Alibaba. This trend underscores the global reach and appeal of metaverse platforms​. (Fortune Business Insights)

The market also faces challenges, including the high cost of metaverse hardware and cybersecurity concerns. Despite these hurdles, the momentum behind digital assets, blockchain, and cryptocurrencies promises a robust future for the metaverse as more industries and users adopt this transformative technology​.

Reality Check: How Decentraland Redefines Digital Dreams

Decentraland’s mission is to create a decentralized virtual reality platform where users can create, explore, and trade digital assets in a completely open environment. Its vision is to build a fully immersive metaverse, governed by its users, where they control the rules and experiences within the virtual world. By utilizing blockchain technology, Decentraland ensures true ownership of digital real estate and assets, empowering users to engage in various experiences, from gaming to social gatherings, education, and more​.

Problems Decentraland Solves

Decentraland addresses the issues of centralized control and lack of ownership that are common in traditional virtual platforms. It offers a solution for creators, developers, and users to have full control over their content and property through non-fungible tokens (NFTs) tied to virtual land. The platform allows for peer-to-peer interactions without the need for intermediaries, providing a seamless experience for users to trade assets, host events, or even build businesses​.

Business Model

Decentraland operates primarily through the MANA token, an Ethereum-based cryptocurrency. The platform earns revenue by selling virtual land (LAND) and allowing users to buy and sell assets within the ecosystem. The business model also includes monetizing events and experiences, as well as offering services like advertising and digital collectible sales. The platform sustains itself through a decentralized autonomous organization (DAO) structure, which allows the community to vote on key decisions, ensuring that the virtual world evolves according to the collective will of its users​.

Behind the Screens: How This Digital World Revolves

Decentraland is a blockchain-based virtual world that lets users build, own, and monetize virtual experiences on decentralized land parcels known as “LAND.” Unlike traditional online games, Decentraland operates without a central authority. Instead, it leverages Ethereum blockchain technology to support ownership, transactions, and user control over the virtual world.

The Decentralized Autonomous Organization (DAO)

Decentraland operates as a DAO, meaning that it is governed by its users rather than a centralized company. The DAO oversees major decisions about Decentraland’s future, such as platform updates and changes to the LAND and MANA token ecosystems. MANA holders can convert their tokens to a wrapped version called wMANA, which grants them voting rights in the DAO. LAND owners automatically receive voting power, with each LAND token equating to two thousand votes. By decentralizing governance, Decentraland ensures that community members have a direct say in its evolution​.

Decentraland’s Ecosystem and Activities

Users can create and monetize a wide range of experiences in Decentraland. Many build games, set up digital art galleries, and even hold virtual events. The platform’s scripting language allows developers to design interactive elements within their LAND. The marketplace facilitates buying, selling, and trading LAND, digital collectibles, and wearables for avatars, enabling a virtual economy driven by user creativity. Notably, Decentraland’s open, decentralized nature encourages users to experiment, build communities, and participate in its vibrant economy.

Playing by New Rules: How Decentraland Gives Power to the Players

Key Features

• Virtual Land Ownership: Decentraland divides its virtual world into parcels called LAND, each represented by a non-fungible token (NFT) on the Ethereum blockchain. Users can purchase, develop, and trade these parcels, creating a dynamic and user-driven environment.
• MANA Cryptocurrency: The platform utilizes MANA, an ERC-20 token, as its native currency. Users use MANA to buy LAND, virtual goods, and services within Decentraland. When LAND is purchased, the MANA used is burned, reducing the total supply and potentially increasing its value.
• Content Creation Tools: Decentraland offers a suite of tools for users to create and customize their virtual spaces. The Builder tool allows for drag-and-drop scene creation, while the Software Development Kit (SDK) enables more advanced development using scripting and external APIs.

Governance Structure

Decentraland operates as a Decentralized Autonomous Organization (DAO), empowering its community to influence the platform’s development and policies. MANA and LAND holders can propose and vote on various initiatives, including policy updates, future LAND auctions, and content moderation.

The governance process involves several layers:

• Proposal Submission: Community members submit proposals through the governance interface.
• Voting: MANA and LAND holders cast their votes on proposals. Voting power is proportional to the amount of MANA or LAND owned.
• Implementation: Approved proposals are enacted by the DAO Committee, a group of trusted individuals selected by the community. This committee ensures that decisions are executed on the Ethereum blockchain.

This decentralized governance model ensures that the platform evolves according to the collective will of its users, maintaining transparency and community involvement.

User Experiences

Decentraland offers a diverse range of experiences, driven by user-generated content:

• Gaming: Users can create and participate in various games, from simple puzzles to complex multiplayer adventures. The platform supports interactive gameplay through its scripting capabilities.
• Social Interaction: The virtual world serves as a social hub where users can meet, chat, and collaborate. Events such as virtual concerts, art exhibitions, and meetups are regularly hosted, fostering a vibrant community.
• Commerce: Entrepreneurs can establish virtual businesses, selling digital goods and services. The marketplace facilitates transactions of LAND, wearables, and other assets, enabling users to monetize their creations.

By combining these features with a robust governance structure, Decentraland provides a unique and immersive virtual environment where users have control over their digital experiences and assets.

MANA Matters: The Virtual Economy That’s Changing the Game

During its initial coin offering (ICO) in 2017, Decentraland raised $26 million by selling MANA tokens at $0.024 each. The total supply of MANA was capped at 2.8 billion tokens. Over time, the supply has decreased due to token burns from LAND purchases and marketplace transactions. Decentraland features a marketplace where users can trade LAND, wearables, and other digital assets. Transactions are conducted using MANA. A 2.5% fee is applied to each transaction, which is burned, further reducing the MANA supply.

The platform’s economic model incentivizes content creation and participation. Users can monetize their LAND by developing attractions, hosting events, or offering services. Developers can earn MANA by creating and selling digital goods or experiences. MANA holders participate in Decentraland’s governance through a Decentralized Autonomous Organization (DAO). 

They can propose and vote on policy changes, development initiatives, and fund allocations, ensuring community-driven decision-making. By integrating MANA and LAND tokens, Decentraland fosters a self-sustaining virtual economy where users have control over their digital assets and experiences.

Tech Talk: Unpacking the Code of a New Digital World

Decentraland is built on the Ethereum blockchain, providing a secure and decentralized infrastructure for virtual land ownership and transactions. Here’s how blockchain supports the platform’s structure:

1. Ethereum-Based Infrastructure

Decentraland uses Ethereum’s decentralized network to ensure that ownership records of LAND (virtual real estate) and MANA (the platform’s currency) are transparent and tamper-proof. Since Ethereum operates as a public ledger, all transactions in Decentraland are easily verifiable, promoting transparency.

2. Smart Contracts for Land Ownership

Each LAND parcel in Decentraland is represented by a non-fungible token (NFT), secured on the Ethereum blockchain. NFTs uniquely define each LAND parcel with specific coordinates and properties. Smart contracts manage these NFTs, maintaining accurate ownership records. This structure ensures that once a user owns LAND, it cannot be altered or taken away by anyone, not even Decentraland itself. This decentralized ownership is a core feature of the platform, giving users full control of their assets.

3. MANA Token on Ethereum

MANA, Decentraland’s native currency, is an ERC-20 token, meaning it follows a standardized framework within Ethereum. Users use MANA to buy LAND and other virtual goods. When MANA is used for purchases, it’s burned, reducing the token supply, which can help increase the token’s scarcity and value. The Ethereum-based nature of MANA ensures compatibility with wallets, exchanges, and other Ethereum-based applications.

Three-Layer Protocol

The platform’s architecture comprises three layers:

1. Consensus Layer: This layer tracks land ownership and its associated content through Ethereum smart contracts. It ensures that each LAND token corresponds to a specific parcel in the virtual world.
2. Land Content Layer: This layer utilizes a decentralized distribution system to store and retrieve the files necessary to render each parcel. Technologies like the InterPlanetary File System (IPFS) facilitate this decentralized storage, ensuring content availability without central servers.
3. Real-Time Layer: This layer enables users’ clients to connect and interact with each other in real-time. It supports peer-to-peer communication, allowing avatars to interact, chat, and participate in shared experiences within the virtual environment. 

Content Creation Tools

Decentraland provides a suite of tools for users to create and customize their virtual spaces:

• Builder: A user-friendly, drag-and-drop editor that allows users to design scenes without coding knowledge. It offers a library of pre-made assets and templates to streamline the creation process.
• Software Development Kit (SDK): For advanced users, the SDK enables the development of interactive content using TypeScript. Developers can create complex applications, games, and animations, integrating external APIs and libraries to enhance functionality. 

Winning Big: Decentraland’s Trophies in the World of Tech

Decentraland has significantly influenced the virtual real estate and metaverse sectors. In November 2021, a virtual land plot in Decentraland sold for approximately $2.4 million, highlighting the platform’s economic potential, underscoring the growing value of digital assets and the platform’s role in the expanding metaverse economy. (Grayscale)

The platform’s native cryptocurrency, MANA, has also seen substantial growth. In late 2021, MANA’s market capitalization surged to around $6.5 billion, ranking it among the top 30 cryptocurrencies by market cap at that time. Also their user base has expanded, with approximately 800,000 registered profiles by late 2021. (The Fool)

Awards and Recognitions

Decentraland has hosted and been recognized in various award events:

• NFT Awards: In January 2022, Enjin held the second annual NFT Awards within Decentraland. The event celebrated achievements in the NFT space, with nominees selected through community voting and submissions. (App Developer Magazine)
• Art Week 2024 Awards Gala: In March 2024, Decentraland hosted its first-ever Art Week Awards Gala, announcing winners of the Decentraland Prize for Art. The event featured a live DJ set chosen by the community, highlighting the platform’s commitment to fostering digital art and community engagement. (Decentraland)

Power Pairs: How Partnerships Propel Decentraland

Decentraland has established several strategic partnerships to enhance its virtual ecosystem and expand its user base.

Atari Collaboration

In 2021, Decentraland partnered with Atari, a renowned gaming company, to bring classic games into the virtual world. This collaboration allowed users to enjoy Atari-themed experiences and games within Decentraland, blending nostalgia with modern virtual reality.

Polygon Integration

To address scalability and transaction speed, Decentraland integrated with Polygon (formerly Matic Network). This partnership aimed to reduce transaction costs and improve user experience by leveraging Polygon’s layer-2 scaling solutions. 

Chainlink Partnership

Decentraland collaborated with Chainlink to incorporate real-world data into its virtual environment. By using Chainlink’s decentralized oracle network, Decentraland enabled dynamic experiences that respond to real-time events, such as weather changes or sports scores.

Samsung Blockchain Wallet Integration

In a move to enhance accessibility, Decentraland integrated with Samsung’s Blockchain Wallet. This partnership allowed Samsung users to store and manage their Decentraland assets directly on their devices, simplifying the process of participating in the virtual world.

Binance Collaboration

Decentraland partnered with Binance, a leading cryptocurrency exchange, to provide liquidity and facilitate transactions of its native token, MANA. This collaboration aimed to make it easier for users to acquire and trade MANA, thereby boosting economic activity within the platform. (Blockchain Industry Group)

RCN Integration for LAND Mortgages

In 2018, Decentraland teamed up with the Ripio Credit Network (RCN) to offer smart contract-based mortgages for purchasing virtual land. This initiative enabled users to acquire LAND parcels through decentralized loans, lowering the barrier to entry for new participants. (Decentraland)

Hanson Robotics Collaboration

Decentraland collaborated with Hanson Robotics, the creators of the AI-driven humanoid robot Sophia, to launch SophiaVerse. This partnership introduced a gamified world where users can learn about AI research and development, enhancing educational experiences within the platform. (Decrypt)

Funding the Future: How Decentraland Fuels Its Virtual Economy

Initial Coin Offering (ICO)

Decentraland’s journey began with a successful Initial Coin Offering (ICO) in August 2017. The ICO raised $27 million, providing crucial funds to develop the virtual reality platform. During this ICO, Decentraland sold MANA tokens, which are used for transactions within the virtual world. This early funding enabled the team to build and expand the platform, attracting a community of early adopters and developers interested in blockchain-based virtual environments. (Tracxn)

Series B Funding

In October 2018, Decentraland secured an additional $25 million in a Series B funding round. This investment came from Animoca Brands, a prominent player in the blockchain and gaming industry. The support from Animoca Brands also brought valuable strategic guidance, helping Decentraland navigate the evolving landscape of the metaverse and blockchain industries.

Revenue Streams

Decentraland generates revenue through multiple channels, centered around its native cryptocurrency, MANA, and the virtual real estate market. The primary revenue source is the sale of virtual land parcels (LAND). Users purchase LAND using MANA, and each transaction burns a portion of MANA tokens, which helps maintain token scarcity.

Additionally, Decentraland earns from transaction fees on its marketplace. The platform charges a 2.5% fee on all transactions, such as buying and selling LAND, digital wearables, and other virtual assets. This fee is also burned, reducing the total supply of MANA, potentially increasing its value over time. Decentraland’s business model also benefits from user-generated content and in-world activities. 

Dream, Design, Decentraland: Your Invitation to the Metaverse

Decentraland is a pioneering virtual world where users own, build, and explore in a decentralized metaverse. Powered by the Ethereum blockchain, this platform offers true digital ownership with its unique LAND and MANA tokens. Users can buy land, create interactive environments, and participate in a community-driven economy. Decentraland stands out because of its focus on decentralization, putting control of the virtual world in the hands of its users.

Through Decentraland, creators and developers can build experiences, from games to virtual marketplaces, and monetize their creations. The platform’s marketplace enables the buying and selling of virtual assets, while its governance structure allows users to shape the platform’s future. This user-driven approach encourages innovation and empowers individuals to bring their ideas to life in a virtual space.

If you’re inspired by Decentraland’s vision, now’s the time to start working on your ideas. The metaverse offers endless possibilities, whether you want to create art or design a game. Platforms like Decentraland make it easier to bring unique experiences to a digital audience.

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