What’s happening in the metaverse these days, you may ask? Considering two of the largest firms with about $1.3 billion valuations, consumers may not return daily. The Ethereum-based virtual world Decentraland had 38 “active users” in the last 24 hours, whereas its competitor, The Sandbox, had 522 “active users” in the same period.
According to DappRadar, an active user is defined as a unique wallet address interacting with a platform’s smart contract. For instance, logging into The Sandbox or Decentraland to purchase with SAND or MANA, each platform’s native utility token is considered “active use.”
Active users in metaverse and PC games. Image: DappRadar, Steam
This implies that DappRadar’s compilation of daily “active users” does not include those who only check in and communicate with other users on a metaverse platform or drop in temporarily for an event, such as a virtual fashion week. It also indicates that fewer transactions, such as purchasing or selling a non-fungible token (NFT), occur on these platforms than the number of visitors.
According to DappRadar, the active users on Decentraland were 675, while the figure for The Sandbox was around 4,503 higher.
Sam Hamilton, Creative Director of Decentraland, contested DappRadar’s daily tracking methodology. “DappRadar doesn’t track our users, only people interacting with our contracts,” he said, adding that the platform had had an average of 8,000 users each day, without specifying what constitutes an “active use” vs. a passive engagement. While the number of visitors to Decentraland peaked in March, the number of “tourists and spectators” decreased.
According to Hamilton, the number of Decentraland users can be more correctly determined using a dashboard by the platform’s community. The statistic measures “unique visits per day” and examines periods between 7 and 90 days. From October 3 to October 9, the website averaged 6,999 unique visits each day. The same data collection instrument analyses the number of “parcels visited per day” and “marathon users,” defining users as users who spend the most time online.
After this story, Decentraland tweeted that 1,074 people interacted with smart contracts in September. It also recorded 56,697 transactions as “monthly active users,” stating that the Decentraland Foundation defines an “active user” as “people who log in and then move out of a parcel.” The report showed that there might be differences between DCL Metrics and Foundation statistics.
Let’s have a look at some of September’s data:
1,074 Users interacting with smart contracts
1,732 minted Emotes
6,315 sold Wearables
300 Creators received royalties
161 created Community Events
148 DAO Proposals
— Decentraland (@decentraland) October 7, 2022
The Sandbox also contested the metrics used by DappRadar to calculate the number of daily active users on its platform. Arthur Madrid, DappRadar’s CEO and co-founder told CoinDesk that the indicator only shows transactions between users or a major NFT sale and not other types of meaningful involvement. In addition, The Sandbox evaluates active users based on various factors, such as their usage over time and retention.
“An ‘active user’ is a user that connects over a period of time,” he explained. “A daily ‘active user’ is someone that connects at least once a day.”
“Imagine you only track the number of people paying for something at a cashier at a shopping mall,” he said. “That doesn’t mean there aren’t a lot of passersby.”
In a subsequent tweet, Madrid clarified that monitoring on-chain transactions does not account for the number of platform users.
Both Decentraland and The Sandbox have significant valuations. According to Messari statistics, both Decentraland and The Sandbox have around $1.3 billion in market capitalisations.
Although the metaverse may be sufficiently a buzzword for firms to rebrand their names around its concept, widespread adoption may take some time, according to others.
Sasha Fleyshman, portfolio manager at the digital asset investment firm Arca, stated that metaverse platforms benefit consumers when they function as planned. “Anyone who tells you that a working metaverse exists now is lying through their teeth.”
In August of last year, Snapple’s pop-up bodega in Decentraland aroused worries about the mainstream applications of promotional content in the metaverse. Tony Hawk introduced his virtual skatepark and avatar collection in The Sandbox in July to attract fans of his $1.4 billion “Tony Hawk Pro Skater” video game to a new, more participatory platform. Virtual skaters may outnumber customers purchasing Hawk’s NFTs in SAND during the event from October 19 to 23.
Fleyshman stated, “In my opinion, we’re leaning towards a lack of product-market fit on that side … irrespective of their valuation.”