A Promised LAND!
Updated: Jan 15, 2022
Virtual land has become a hot commodity with record money chasing it. It's estimated that the Metaverse will become a trillion-dollar industry, and at the base of all this lies digital land - over which the Metaverse will be built.
Let's analyze this fundamental asset of the Metaverse - LAND, and how the Earth 2 model compares to other leading platforms. For the sake of this discussion, we will limit the comparison to two of the leading and most talked about platforms - Decentraland and Sandbox. Decentraland and Sandbox have their land supply capped (see table). In contrast, Earth2 has an open supply, however with the exponentially rising price algorithm keeping a check.
'I need a home in the Metaverse'
There are some advantages of having relatively more landowners.
While limiting land supply creates scarcity, it also limits retail participation in the longer run. Think about how people feel about a real-life city where they own a home versus a place where they are just 'visiting'. Owning land in the metaverse may provide an anchor point to any user interacting with that platform. In other words, he/she has a 'home' there.
Compared to the pricier floor prices of land in Decentraland and Sandbox (starting at $10k upwards), Earth 2 has far lower entry barriers to owning land and its tiered land structure allows it to keep it that way. Further anyone with a credit card can buy Earth2 land, unlike Decentraland or Sandbox where you must own crypto to buy land. Thus anyone can become a landowner on Earth2 within minutes and with minimal investment, which I believe is great for adoption. Overall, land ownership builds skin-in-the-game, develops stickiness to where users can come back to check-in and most importantly creates a sense of belongingness - all great things for the long term.
Secondly, having a larger land footprint allows for more users in future. Consider a future scenario where millions of users would be logged on concurrently. They all need for their avatars to move around freely without bumping into crowds, or enjoy experiences without having to stand in a queue (think Disneyland). Consider that the Decentraland footprint is just 23 sq. km. while Sandbox is still 1,534 sq.km. For comparison, New York Metropolitan area is 34,494 sq. km and hosts about 24 million people - roughly 694 people per sq. km. Without going into more numbers, it's easy to see that a limited Metaverse land footprint would limit the number of people that can be 'inside' at any given time.
'I want to live that Metaverse experience'
The ultimate utility for Land lies in the digital experiences it hosts and maybe the traffic it generates in future. Land in Decentraland and Sandbox is limited, once this supply runs out anyone who wants to build a digital experience within them will either need to purchase it or lease it from others. Having more land available (like in Earth2) works against this, as the availability of cheap land allows the creators to be spoilt for choice - whether to acquire new land or buy/lease. This one factor seems to be priced in the premium attached to the price of land on Decentraland/Sandbox compared to Earth2.
Additionally, both Decentraland and Sandbox have an already functioning 3D environment filled with custom experiences and enjoy a massive lead over Earth2. Additionally, they have secured partnerships with several institutional participants who are committed to building experiences inside their respective platforms. Both have already provided their landowners with tools to design and create interactive digital experiences. While Decentraland is ahead, Sandbox recently went live with its gameplay, releasing its alpha version on 29th Nov 2021.
On the other hand, Earth2 is only getting started and is still some time away from releasing an open 3D world. Recently Earth2 acquired DRONE which is expected to be their first 3D experience. This acquisition will also provide access to technology and tools towards achieving an open 3D world. However, a full-blown 3D world on Earth 2 seems to be months away.
Another aspect is environment quality - while Decentraland and Sandbox environments appear 'cartoon-like', Earth2 has promised AAA graphics which we saw in their Terrain Engine Trailer. However many ask the question of whether such graphics can be scaled to the size of Earth, and what kind of hardware resources we need to host and experience such a world. Only time will tell how successful Earth2 is in pulling this off, however, the Earth2 team seems confident.
(Gameplay and Environment reference videos for Decentraland, Sandbox and Earth2)
Considering all the above aspects, it remains to be seen which model will flourish even as Earth2 catches up to Decentraland and Sandbox to launch its 3D gameplay.
Down the line, many are hoping that there will be some interoperability within the Metaverse across platforms - at least the platforms hosted on the same blockchain ecosystem (these three are part of the same Ethereum ecosystem). Therefore whoever provides for a great quality experience and creates value for both - creators and users alike, will be able to scale up faster and win. I hope there will be multiple platforms that will thrive - the Metaverse needs healthy competition, as it pushes everyone to innovate better and faster.