Genesis City is evolving before our very eyes. Since the launch of the eagerly anticipated Decentraland Estates feature, enabling LAND owners to join their adjacent plots of LAND into one larger plot of LAND, it seems the Decentraland community have gone bonkers. Every man and his dog is creating a mini kingdom they can call home, but is this a good thing?
This article breaks it down to the good, the bad and the opportunity of Decentraland Estates.
Decentraland Estates – THE GOOD
1: The Map Evolution
As the community continue to form their Estates, the Decentraland map is changing and evolving, at the same time unearthing many new private projects and innovations that have been bubbling on in the background and yet to be seen by the community. Which leads nicely on to….
2 …The Creation of New Districts
Now that LAND owners can join their plots of LAND, new districts have started to appear, which in themselves will presumably house their own communities and in turn attract more users to Decentraland. Hidden Hill, Power To The People and The Muslim Quarter are just 3 examples of many popping up each day.
3: The Community is Alive & Well
The launch of the estates feature has quickly demonstrated that the Decentraland community is alive and well. This was clearly demonstrated by the fact that Decentraland Estates NFT shot to No#9 of the most popular NFT’s list within 24 hours according to Etherscan:
This really does show a deep interest and dedication from those already invested and owning adjacent LAND in Decentraland.
Decentraland Estates – THE BAD
Whilst there are many benefits to the existing community for having Estates, on the flip-side this could cause more barriers to entry when onboarding new investors to Decentraland.
1: Less Cheap Parcels For Sale
As if often discussed, LAND prices are currently high and can be barrier for new investors. Since the release of the Estates feature around 1500 parcels have now been taken off sale on the marketplace. Presumably, these are the parcels which have been used to create the Estates. If there is a decrease in the supply of plots of LAND for sale, then simple economics suggests that this will push up prices.
2: Marketplace Activity
As Estates cannot currently be bought or sold on the marketplace (this feature is coming soon) then that leaves less parcel choice for new investors to get onboard.
More importantly, Estates are LONG term investments. If too many Estate owners take a “buy, HODL and list for 10,000,000 MANA” approach and decide not to build, then this will be detrimental to the marketplace.
A flourishing and highly active marketplace is vital to Decentraland’s progress. LAND needs to be attainable.
The buyers’ market for Estates will lie with large businesses with big budgets, most of which will have little interest in investing large amount amounts of capital for an Estate in Decentraland unless the footfall from users is there. All the while, highly priced Estates (with nothing built on them) will do nothing to attract new users by just sitting there unbought. By not building and just ‘buying to flip’, Estate holders are literally harming their long-term chances at being able to sell.
3: Big Players
It has been made clear that there are some ‘LAND Whales’ with large LAND holdings. The Estates feature now further highlights this on the map with many Estates being owned by single accounts.
This can be seen as both a positive and negative. Coining a phrase which is often used for something else a bit more X rated, I guess “It’s not how big it is, but what you do with it that counts”.
Decentraland Estates – THE OPPORTUNITY
Addressing LAND investors: There is an obvious opportunity to buy LAND surrounding Estates. If any of the Estates succeed, then they will be looking to expand. The only way they can expand is by buying adjacent parcels. Parcels you will own.
Addressing Estate Owners: #BUIDL something special. You now have the power to build something amazing that adds real value to Decentraland. For Decentraland to succeed, it shouldn’t be about only building Estates to flip for higher profits. Thats all wrong and harmful to your long term goals (sell for profit).
It should be about using your asset as a platform to offer real value and help onboard new members by e.g. building smaller communities or providing a game or service which attracts new users. If done correctly, this approach will undoubtedly see higher returns in the long run, and consistent returns in the short term. A long term investment requires a long term strategy and vision.
The Estate feature is a necessary evolution for Decentraland, but one which should be used wisely by those who own them. Only time will tell whether Estate owners intend to make a quick buck and move on, or actually care about the success of the Decentraland project as a whole.