Decentraland and the future of renting land in the metaverse
Imagine this. You own a hip fashion brand that sells funny t-shirts. You want to increase brand awareness among Gen Z and boost your sales. So, what do you do?
You rent a parcel of land in Decentraland and create a virtual shop. In your virtual shop, gamers can stop by, look at virtual representations of your t-shirt collection, and buy them for their avatar.
But, that’s not all. These real-life gamers can also twin with their avatar, buy the physical shirt, and have it shipped right to their doorstep.
All of this takes place in the metaverse, and it skyrockets your brand exposure and revenue.
After talking to Dan Reitzik, CEO of TerraZero, I learned this scenario isn’t a hypothetical. It’s a reality, and companies like Bacardi and Jimmy John’s are already off to a strong virtual-commerce start in the metaverse.
Here’s what I learned from Dan about land rental in the metaverse, opportunities that exist for brands, enterprises, and creators in the metaverse, and current metaverse trends.
This interview has been condensed and edited for clarity.
Banknotes: What is TeraZero and why did you decide to create it?
Dan: In March 2021, someone exposed me to the metaverse. I realized very quickly that, after crypto, the metaverse was the next use case of blockchain technology. So, we built TerraZero, a metaverse land developer, in May of 2021.
Our team learned very early on that in order for the metaverse to succeed as a destination, we needed to create tools that made it easy for businesses and people to move into the metaverse.
Our platform division creates products and technologies that bridge the gap between the real world and the metaverse. The first one is called Amadea.com, which allows people to buy, sell, and rent their metaverse land.
The reason why Amadea works so well is because most companies don't want anything that has to do with crypto on their balance sheet.
Typically, if they buy a piece of land in the metaverse, it’s represented as an NFT and, therefore, as crypto. To get around this problem, brands partner with companies like ours to rent the land they need to build their activation.
Banknotes: Can you give a brief overview of what the metaverse is? How can businesses and marketers leverage the metaverse?
Dan: The metaverse is a new way to interact with potential customers. The metaverse is not only a decentralized destination. It’s a merger of the real world and the virtual world.
For example, in Jimmy John's virtual world, you could go in and make a sandwich and get a coupon in return. You can later use this coupon in the real world to buy your sandwich at a discounted rate. In our experience with Jimmy John’s, users were able to create their own sandwiches, and submit them to be voted on by the community for a chance to become a real limited-time menu item. When that actual sandwich, “The Metasandwich” was chosen and debuted, the delivery of that limited-time sandwich sold out immediately. That shows an invested community and how Jimmy John’s uses the metaverse to drive customers to its real world stores.
A great way businesses can leverage the metaverse is by using augmented reality (AR). For example, brands like Nike will be able to use AR in the near future with a pair of smart glasses to play games created and curated by a brand like Nike working with a company like TerraZero.
In a few years, you’ll still be able to walk into a Nike store and make a physical shoe purchase. But, you’ll also be able to walk into a store, turn on your smart AR glasses, and purchase products for your metaverse avatar too. Plus, engagement in either the physical or virtual world will impact your experience in the other. It will be a continuous loop of engagement.
Banknotes: How can someone rent land in the metaverse? What does a company need in order to make a purchase and build digital real estate?
Dan: If you want to buy land on any of the platforms, you need to have a crypto wallet and an account at a crypto exchange like Coinbase. Completing the entire process is complex, and it’s not something that brands are typically interested in, so rental is the solution.
In terms of logistics, on the one hand, metaverse land owners don’t want to give land NFTs to other people or companies because they’re afraid of never getting them back. On the other hand, brands don’t want to trust individual owners in case they sell their land, or prematurely get rid of, or deface brand IP that is being hosted on that land.
To combat this issue, we are launching Amadea.com, which offers a trusted, vetted way for both parties to engage safely for rentals. Our agreements and smart contracts enable the NFT to be held on the blockchain until both sides of the agreement are completed, and then the NFT is returned to the owner.
This means the brand has the assurance that no one's going to deface their billboard or brand home in the metaverse, and the owner has the assurance that their land NFT property will remain theirs.
Banknotes: What sets the metaverse apart from the 2D world?
Dan: You can almost experience the metaverse like a video game. For example, we’re building a city in the metaverse which will have retail stores for our clients. We also plan to develop comedy theaters, bars for Miller, stadiums, etc. in the metaverse.
One way this differs from the 2D world is you can now put 20 million people in the metaverse for a Drake concert, which is a major upgrade from the 20,000 people Rogers Arena could fit.
Another benefit of the metaverse is you can also view events at a fraction of the cost. And the artists don’t necessarily have to travel worldwide either.
The metaverse brings people together. The metaverse is what social media was supposed to be, instead of what social media became, which is one massive data harvesting platform.
Banknotes: How does advertising work for events in the metaverse?
Dan: The metaverse brings customers from the real world using traditional forms of media in order to drive that traffic into the metaverse.
For example, in a recent campaign, Angel’s Envy sent a shout out on Twitter when its meta distilleries were released.
Twitter followers received a notification that they could experience the distilleries in the metaverse.
Banknotes: What are some of the most recent interesting metaverse trends you’ve seen?
One of the things I find most fascinating is the social aspect of the metaverse. In the metaverse, people can congregate in the Miller Lite Bar, and they can talk to each other, send chat messages, or simply just hang out together in this virtual world.
The other thing that excites me is there are going to be hundreds and hundreds of different metaverse worlds, which will be connected through interoperability.
As impressive as these trends are, the most interesting thing about the metaverse is how we can expect to see a change in the office environment. Organizations working from different parts of the world can now have office buildings in the metaverse.
Banknotes: What should we expect in the near future in terms of what will be happening in the metaverse?
Dan: The most impressive attribute of the metaverse is how it can be an entirely new creator economy for the next generation.
We can also expect our daily lives to change with the addition of this virtual world. For example, in the future, the next evolution of the Jimmy John’s experience is one where you can create your sandwich, pay by credit card, and then the sandwich will be delivered to your doorstep.
Another aspect of the metaverse is how it will seamlessly incorporate augmented reality. I already know various manufacturers that are launching some cool and inexpensive goggles, through which you can see augmented reality. So, instead of just going to experience your favorite artists and brands in Decentraland and interacting there, you can see metaverse activations in the mall, like Pokemon Go. Your favorite brands and artists will come to you. Blending the digital world and the real world will become easier than ever.
Banknotes: What are the most common complaints you've heard about the metaverse?
Dan: One of the biggest misconceptions is that Decentraland will never have the same gameplay feel as your Sony PlayStation 5 until everybody has a supercomputer through which they can access a blockchain.
But, not being as advanced as Sony is an advantage. It allows us to have basic games like Minecraft and Roblox. Your metaverse is not going to look like a TV commercial, but it will improve over time.
Another misconception is that the graphics are not sharp enough or defined enough. Yes, at this time, it is not, but it will improve over time, just like the internet did. I mean, remember the internet when we couldn't stream a movie in the ’90s? Right? It takes time. Many, on the contrary, will always prefer simplistic design and high contrast colors. The nature of the graphics, right now, removes the anxiety of a hyper-realistic experience. Mobile games with simple graphics have millions of devout users.
Banknotes: Can you tell us more about the social aspects of the metaverse world?
Dan: There will be thousands and thousands of metaverse worlds for different uses. Some of them would be for only socializing, like Decentraland and Sandbox (this is still in beta). Some of these worlds would purely be B2B, where a business would demonstrate how its product works to another business. The metaverse is evolving to slowly replace Web2.
In other words, instead of going to Walmart.com and picking all of your items off a webpage, in the metaverse, you can walk into a virtual Walmart, enjoy the whole shopping experience, and the products will arrive at your doorstep just the same.
Banknotes: What are some unique things you’ve seen brands and retailers do?
Dan: Interactive billboards are highly unique and creative. Upon touching them, you can hear the song, and be transported to events that showcase the artists.
We also were involved with Estée Lauder’s campaign for Metaverse Fashion Week—and they gave away thousands and thousands of digital wearables to their customers..
This wearable made their character glow with radiance, which channeled the identity and themes of the Estéee Lauder product.
Banknotes: How can businesses use the metaverse?
Dan: We're currently helping enterprises strategize their next year’s worth of activations in the metaverse. Some of them are looking at the metaverse to host conferences (either exclusive conferences, or as an add-on to real-world conferences).
And some of them want to use the metaverse to conduct business and to train their other business clients on different products or devices.
We’re seeing the beginnings of an entirely new economy and the evolution of the internet as we know it. It’s becoming a more interactive internet.
Banknotes: Do you think brands will leverage creator influence in the metaverse?
Dan: Yes, creators are just as important in the metaverse as they are in Web2. I also believe they’re going to have their own headquarters in the metaverse where people can come and visit them.
Instead of reading their tweets, you can hear them talk and interact with their avatar. At the same time, influencers are also essential for educating their audience on the ins and outs of Web3. Accessibility will be key, and more open than ever.
Aside from creators, there’s also a huge space for design. Our studio is mainly comprised of 3D modelers and designers, with a few programmers. Since the metaverse is all about the design work and gameplay, I think a lot of artists are going to find a new revenue stream and a new way for them to gain fans.
Banknotes: What is one of the biggest challenges in the metaverse?
Dan: Because the metaverse sometimes has overlap with some of the ways crypto is used, there is a speculator type of mentality in some cases. I mean that people buy land and are sitting on it, hoping it will appreciate over time.
We are huge proponents of renting land. I have no issue with someone owning the land and waiting for it to appreciate in value over the next 10 years, but at the same time, these lands should be used—imagine if every third web page on the internet was empty.
In Decentraland, land is finite, and only 90,000 parcels of these worlds exist. As opposed to this, in a centralized world, the CEO can double the amount of land at any time.
The option of rentals allows brands with even the smallest budget to create something and allows owners to earn cash. It’s a win-win for everyone.