To DAO or not to DAO: Must all metaverses be decentralized?

Join me in two metaverses: Walmart Land and Decentraland, as I attempt to answer the question: Must all metaverses be decentralized? Along the way, I’ll sus out the agendas behind each and weigh up the costs and benefits to structuring a metaverse via DAOs.

Christmas dinner invited a lot of talk (read: interrogation) about the space I work in, “Web3 gives power to the people,” I said, though its a bit cliche. “It’s decentralized. Imagine if everyone voted on how their social media operated rather than Mark Zuckerberg deciding what happens with Facebook.” A simplified example, I know, but some of these people are 80 years old with little context to the web3 universe. I’m trying my best. My point is clear: web3 aims to democratize everything.


Later, my grandparents asked me for a crash course on web3’s hottest topic: the metaverse. I involuntarily winced and my mom kicked my leg under the table; that’s how I found myself living the web3 twitter cliché, explaining the metaverse to my confused elders who might not really care. Stuffed between bites of roast and stuffing, I spent the remainder of the meal begging them to remember that episode of The Office where Dwight uses Second Life, the hours I spent playing Club Penguin as a kid, or even just what a VR headset looks like. “The Metaverse has been around for a longtime, I swear.” They patronizingly nodded their heads as I detailed one of the most difficult to understand parts of web3.

The Metaverse — an immersive virtual world part of a new iteration of the Internet — offers a (usually) decentralized network of virtual spaces where users can interact, transact, and create content. It offers a new form of digital ownership core to web3 commonly applied through gaming, socializing, and online marketplaces. It’s not difficult to find these real-world applications, ones that my grandparents might be able to understand, and with a long history of pseudo-metaverses like Second Life and Club Penguin, the Metaverse is more recently hitting the mainstream. In late September, Walmart launched a pair of “immersive experiences” — Walmart Land and Walmart Universe of Play — on Roblox.

Have the Walmart heads of state created a flaming bag of trash on Roblox and branded it as a metaverse? Or is this centralized metaverse experience going to set the bar for what’s to come?

Come to think of it, at this same Christmas dinner, my 8-year-old cousin shilled his seemingly life-changing experience using Roblox in more detail than I previously thought available in his nascent vocabulary.

I digress.

I love Walmart — their parking lots were home to me over many a road trip. And hey, it’s that odd time after the new year begins where no one is really back to work and I have some free time to expand on some ideas that have rattling around in my head.

So, using my experience in Walmart’s metaverse and a quick trip into decentralized metaverse Decentraland, I’ll investigate this question: Must all metaverses be decentralized?

Into Walmart’s metaverse

I download Roblox and I’m kind of excited. But similar to the New Year’s Eve party I attended, I deceived myself into thinking that Walmart Land would be somehow packed with people. I was one of 3 avatars enjoying the somewhat dystopian sights and sounds of Walmart Land — and someone copied my outfit. Damn.

We’re not off to the best start. The dudes sort of look like knock-off legos, and the prices of items remind me of my weekend in Zurich. I’m having trouble finding the loot box so that I can claim coins to board the blimp so I can get to the store to purchase a new fit. The UX is questionable, to say the least. I ask the chat for help but I fear their ages may prevent them from offering any real guidance. My fears are confirmed: the “employees” do not exist.

My 2018 MacBook Air is screaming the entire gameplay and I can’t figure out how to de-board the ferris wheel. Walmart Land’s page on Roblox’s game store is flooded with negative reviews. User feedback seems to be low on the priority list of Walmart’s attempt to “drive relevance in cultural conversation” (a direct quote from Walmart’s Chief Marketing Officer William White).

Eventually, I got off the ferris wheel (by restarting the game), picked up a few coins, and made my way to the store.

Finally: an OOTD reveal. (Please check your Roblox privilege before you judge — this was all I could afford.)

The truth about the Walmart metaverse

Walmart Land is sort of like if Second Life was a marketing pitch to children.

Officially, Walmart Land is what allows users to engage with the brand in a new and interactive way. Really, it’s an attempt to market toys to kids, or “young shoppers” as Walmart corporate has decided to label. Roblox has more than 50 million active daily users, ⅔ of which are under the age of 16.

Maybe this criticism is low-hanging fruit, it’s not like we haven’t seen this before.

It makes sense why Walmart wanted to join the hype in the metaverse — it’s a money-maker. Second Life, one of the first metaverse experiences to gain widespread popularity, peaked at over a million users. 20 years after its launch in 2003, the GDP of Second Life (over $500M annually) is larger than some countries.

Another metaverse, Fortnite, while free-to-play, has made $20 billion doing something pretty similar to Walmart Land — marketing items to children — albeit with a far better UI. The outfit that I spent so long in Walmart Land earning coins to buy could’ve been bought in Fortnite in 30 seconds with $20 off my mom’s credit card. I could also buy dance moves and items to help me succeed in the game. And then there’s the fact that it seems less icky purchasing things in Fortnite’s metaverse than in Walmart’s. Why’s that?

DAOs and the metaverse

DAOs can help solve the issues present in centralized organizations, especially in the Metaverse, which is by definition “decentralized.” DAOs can govern and manage virtual assets within the Metaverse through a variety of on-chain tooling and can be used to fund and manage virtual reality projects in the Metaverse, such as the development of new virtual worlds or the creation of virtual goods and services. And they do. Let’s venture into what is widely cited as web3’s greatest example of a decentralized metaverse: Decentraland.

Branded as “the virtual world in your hands,” Decentraland is a virtual world built on Ethereum that is powered by voting with its native governance token, $MANA, which can be earned through gameplay. $MANA holders, who are widely Decentraland players, or at the very least retail buyers with investment in the space, retain full control over the Metaverse.

Through the DAO, you use $MANA to control the policies that govern how the world behaves. So what can you actually control?

  • What kinds of wearable items are built, allowed, and disallowed

  • Specifics and dates of LAND auctions

  • Size of marketplace fees (in $MANA that gets burnt)

  • Allocation of $MANA grants to development efforts

  • Members of the Security Council, Decentraland’s governance leadership team

  • Addition and replacement of community-run content servers

  • General protocol upgrades

Into the (decentralized) Metaverse I go

Immediately, I’m making an avatar from scratch and it doesn’t have blocks for body parts. Big up. It’s interesting that every single one of these clothing and item options was voted on by the DAO to include. There is a notable prevalence of millennial clothing trends, which I can reason back to the player base.

Everything, from parceling out a new category for “Hands” in order to not flood the accessory category with items for hands, all the way to debates over delegation mechanisms available to MANA holders, is available in proposal form on Decentraland’s governance forum.

The big positive: better UI. Better UX, too. I’ll say it: it’s also cool to see players determining the specifics of their game. It brings back some fond memories voting which color pseudo-metaverse Club Penguin should begin offering for penguins before I’d even hit double-digit age.

In other aspects, the decentralization of the metaverse seems micro-manage-y to a massive fault. The aforementioned “Hands” proposal is a no-brainer, one that would theoretically be sorted out by Walmart Land’s devs within minutes. But the proposal on Decentraland is 800 words and notes that it has been in talks “for nearly a year now” (their words, not mine). There is something concerning about it taking a year to separate out a category.

Criticisms against DAOs related to speed of action (or lack thereof) are common. Even so, Metaverse tokens are the best performing sector in crypto thus far in 2023, with MANA up nearly 38% in the last few weeks. Other major metaverse tokens have jumped since the start of the new year, too, with The Sandbox’s $SAND up by 31.3% and Gala Games’s $GALA doubling in price.

Walmart Land vs. Decentraland

The ethics of the metaverse align with those of web3, the same ones I explained to my extended family over the dinner table: users should control and own the content they create.

Walmart Land doesn’t really represent what the metaverse is about — decentralization of the Internet. Noting the authoritarian-style leadership of the way Walmart Land operates, now and forever, it is impossible to ignore the alternate agenda (“please buy our toys, children”) apparent in every aspect of the game. It is extremely evident these corporations view web3 as an opportunity to exploit a powerful trend in a younger, more economically enabled generation & that won’t work. Digitally native generations will call BS from a mile away. MBA types still don’t understand the power of DAOs, not just from a technical perspective, but from a cultural level that is hard to teach.

This is why DAO-run metaverses lack undertones of corporate exploitation.

DAOs allow users to influence their metaverses of choice to a degree proportional to their involvement. Metaverses run by DAOs are designed by the metaverse users, for the metaverse users. It seems like the perfect system: the people that spend the most time in a given metaverse get to contribute to its development the most; with this decentralization comes a bit of red tape as a tradeoff. Decentraland debating over the addition of a Hands category may seem tedious, but regardless, it certainly elucidates a clear departure, at least in terms of vibes, from Walmart Land, which bombards users with pleas to purchase whatever items the Walmart elite decide should be included.

DAOs and the metaverse have the potential to revolutionize the way we interact and transact in the digital world by providing more transparency, security, and decentralization. The combination of these technologies can create new opportunities for innovation and growth in the digital economy. Comparing Decentraland and Walmart Land, it’s easy to see the benefits of DAO-run metaverses over those created by a centralized entity with a deep and well-documented history of prioritizing the maximalization of shareholder value over the voice of its users.

The best user experience comes from a metaverse that is decentralized & activates the voice of its community.

So, wen WalmartDAO??

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