What's driving the decentralised Metaverse drop?
As reported by CoinDesk on Wednesday, decentralised, blockchain-based Metaverses like Axie Infinity, The Sandbox, and Decentraland, are struggling to attract users in the same way as centralised Metaverses are.
Centralised Metaverses, like Horizon Worlds or Fortnite, are controlled by a central entity which, in these two cases, is Meta and Epic Games respectively. Decentralised Metaverses on the other hand are built and operated by the people that use them, the largest of these being Axie Infinity, Decentraland and The Sandbox. Decentraland, for example, prides itself on being a “full-decentralised world”, where users can submit proposals on Decentraland’s future direction, and vote on proposals submitted by others. In short, Decentraland is governed by its users.
The largest of these Metaverses is Axie Infinity, a partly decentralised token-based game, where players mint non-fungible (NFTs), which are represented in the game by axolotl-inspired digital pets known as Axies, and which players can battle, collect, and trade. Developed by Vietnamese studio Sky Mavis, Axie Infinity was initially launched in March 2018. By mid-2021, had reached one million daily active users, or DAUs. That is, one million people actively engaging in Axie Infinity on a daily basis. DAUs is a key metric, acting as a health check by asking whether or not people are actually using Metaverses. By November 2021, the number of DAUs was creeping toward three million. But since then it has dropped dramatically to under one and a half million users. So, what’s going on?
Between December 2016 and December 2020, centralised Metaverse Roblox was adding over 8 million users a month. Back in February, Meta’s Horizon Worlds VR Platform surpassed 300,000, averaging 100,000 new users every month since its launch in December 2021.
One key difference between centralised and decentralised Metaverses is their use of in-Metaverse currency. Axie Infinity, Decentraland and The Sandbox all use the ERC-721 tokenisation standard and Ethereum-based tokens in the form of AXS, MANA and SAND respectively. As such, these cryptocurrency based Metaverses require users to have a digital wallet. While Roblox, Fortnite and Minecraft and have Minecoins, V-Bucks, and Robux respectively, they are not considered to have fundamental impact on user enjoyment.
So, are cryptocurrency based Metaverses still too scary a proposition for the majority of people?A $600 million hack on Axie Infinity’s Ronin blockchain in March will not have helped.Have these decentralised Metaverses been riding the classic hype curve?Or are overbearing pay-to-win game dynamics simply unattractive to most gamers?Post-hack, Sky Mavis has launched Axie Infinity: Origin, a new free-to-play version.