State of Decentraland in Q1 2023 (2024)

Decentraland is a virtual world platform that offers users from different parts of the world to come together and own the land, interact with each other, and play games. There have been varying reports on its current user base. In one incidence, according to Decentraland, they have about 8,000 daily active users. At the same time, other sources report it has around 18,000 daily users and a monthly active user base of about 300,000. However, DappRadar reported significantly lower numbers, with only 38 active users in 24 hours.

Decentraland’s growth and future outlook are positive. In March 2023, its market cap is worth $1.19 billion U.S. dollars. The platform has a strong community, novel income streams, and a progressive governance model. Decentraland is an early mover in digitized real estate. It has a first-mover advantage against other metaverse platforms like Meta.

The 2023 Metaverse Fashion Week (MVFW) outcome by Decentraland was less successful than its 2022 edition. According to Decentraland’s admission, unique visitors dropped from 108,000 in 2022 to 26,000 in 2023. GEEIQ, a third-party metaverse analytics firm, reported even lower numbers, estimating less than 9,000 unique visitors.

During the event, users spent around $26,000 on wearable skins from fashion companies and claimed around 76,000 free wearables. The Metaverse Fashion Week featured significant fashion brands, such as Dolce & Gabbana, Balmain, Coach, and Tommy Hilfiger. Despite the decline in attendance, the event attracted tens of thousands of new visitors to the metaverse.

Overall, Metaverse Fashion Week 2023 experienced a significant decrease in attendance compared to the previous year, but it still managed to draw new visitors and generate sales from wearable skins.

On-chain analysis of Decentraland for Q1’23

Let’s look at the monthly land unit sales. There has been a significant dip of approximately 69% in the number of land units sold in Q1 23 (194) compared to Q4 22 ( 619). This can be interpreted as the shift of interest of people towards other platforms such as Otherside and Sandbox.

The Land price decreased for Decentraland in the last two months of Q1 23. Other metaverses have also experienced slow momentum in land sales. The drop in Decentraland is the highest amongst The Sandbox, Decentraland, and Otherside.

As compared to January ($0.56), the $MANA token managed to have a positive performance in the second month with 26% growth in February ($0.71), while it came down in March ($0.59) as the hype of Metaverse fashion week cooled down.

The number of active users was the highest in November in Q4 22 ( 50729 users), but since then it has declined with December having 35k active users, January having 38k, February 27k & March 27.6k being at approximately half the levels of November. However, the number of new addresses is still decent, with an average growth of 11.5k users per month in Q1 23. This was 18.1k for Q4 22( a 36% decrease quarterly). There were 802k registered users by the end of March, with 302k users having some balance in their accounts.

If we look at the correlation matrix for a period of 30 days between MANA and other cryptocurrencies. We can see that price of MANA doesn’t have much effect by legacy coins like BTC and ETH, but Uniswap and MATIC were closely correlated. Even during the period when major of the cryptocurrencies were down ( since they are closely correlated with BTC and ETH), MANA on the other hand gained in price. One can include MANA in their portfolio in order to diversify and reduce the drawdown of the portfolio.

Closing Thoughts

While Decentraland has been one of the key players in the field of Metaverse, there has been a decline in the user base. The shift in userbase can be attributed to the lack of any new elements in the metaverse and the launch of new metaverses that offer users an engaging experience. Otherside has been one such metaverse that has been attracting new users at a fast pace. Even the lackluster Metaverse fashion week even after the presence of some of the biggest names in the fashion industry is surely a big concern. In order to continue the title of the top 3 metaverse platforms, Decentraland needs to come up with new features and tactics to keep users engaged and it should be done in the shortest possible time.