What happened and what we can do with Decentraland Districts

Introduction

UPDATE (1): I’ve corrected the ‘51% contributors voting’ to ‘67% of all lands voted’ and added the link.

UPDATE (2): There may be small errors, I’ll try to correct them as the discussion continues. I have the best of the intentions. I’m trying to improve stuff in Decentraland, trolls only want to focus on nonsense stuff and find no solutions. Can we discuss on how to improve the current situation? 🙏

UPDATE (3): People were actually allocating MANA (which then was converted to land) to Districts before the Terraform event that took place on December 15 (proof, check the YT date, is before December: https://www.youtube.com/watch?v=XEwi2WtS1Yk). The chronological order is correct.

Hi. It’s publicly known that I won the last poll of the DAO COMMITTEE with the help of some whales and some people are questioning how I got my votes and what’s my relationship with Rob L.

First of all, I want to clarify that I don’t have any business relationship with Rob L. apart from just talking with him via Discord multiple times. I met Rob L in April 2022 when I was doing some research about districts for a video that I wanted to make. 

Second of all, I want to publicly say that I think districts were one of the worst decisions that Decentraland has ever taken and if you guys keep going down in the hole, you will see how most districts may be a mess.

A bit of context

Decentraland’s districts were one of the ways the original team chose to push content in Decentraland. Around that time, many people created low-effort GitHub proposals where they talked about which type of districts they wanted to create.

One of the most famous proposals was created by v1nc3nz0, a user who suggested building a ‘Red Light District’ that was focused on developing adult content for Decentraland. 

Between September and December (2017), Decentraland took all the GitHub proposals and added them to their website where people could contribute MANA for each one to become a reality. People contributed 1000 MANA to Decentraland for any project that they liked or wanted to support. Decentraland would internally reserve one piece of land for each project.

After December, there was no more relevant discussion about districts because all the attention went to the land auction. The land auction took place in December (after the district thing started) and ended in January 2018. 

In January, the authors of the GitHub proposals assumed the role of district leaders. Red Light District author never showed up and then a user called SAAM.I.AM self-appointed himself. 

SAAM.I.AM managed to create a team of seven people. One of the people he managed to put on his team was 0kCupid. After appointing himself, he had a falling out with Decentraland and they asked him to leave. He allegedly scammed Ari Meilich with money that he promised he would use for the district and he also allegedly went to one of the contributor’s homes with a handgun.

After the fallout, Ari Meilich reached 0kCupid (who was part of SAAM.I.A.M’s team) to take the lead because she had a technical background. Rob L. reached Ari Meilich offering help and Ari Meilich decided to tell him that 0kCupid may need help in the district with some business end. 

Ari Meilich connected Rob L. with 0kCupid and they agreed to go in partnership in a district (April 2018). Decentraland then came with a requirement that all districts had to create an initial startup plan (ISP) and submit it to Decentraland. Then, Decentraland took all the ISPs and put them into their Agora voting app (agora.decentraland.org) for contributors to vote. All ISPs from all districts were different from what was originally proposed on the GitHub proposal. Decentraland basically got the contributors to vote on what the new district plans would be.

The ISPs had to get >67% of all the lands that were voted on in order to be considered approved. DistrictX with Rob and 0kCupid got approved with an 85.7%. A few months later in December, 0kCupid reached out to Rob and Ari and told them that she got accepted in a position in a job with greater responsibility and had no time to devote to Decentraland. This basically made Rob L. the only owner of District X.

Rob L. reached Carl Fravel and asked if he would join District X as the technical lead. They pivoted the district from an adult-only-content district to a land rental and management company. They created a second ISP and submitted it to Decentraland and it got accepted. Decentraland then took that second ISP to the contributors to get a second vote. The result of that second vote was 99.5% of approval. 

Shortly after, Decentraland sent out land transfer agreements to all districts. Districts then contracted with Decentraland via these land transfer agreements and the land transfer agreements transformed 100% ownership of all land directly to district business entities. The land transfer agreements MADE NO mention of any obligations that district business entities HAD to any third parties including anyone who contributed to districts.

So…

• In short: people contributed MANA to Decentraland (in 2017) to reserve LAND for projects that later became districts. District business entities didn’t even exist until 2018. As such, district business entities WERE NOT a party to the transaction that took place in 2017. Districts have no legal contract between them and contributors. The only legal contract that District entities had was with METAVERSE HOLDINGS LTD (the company that used to be Decentraland before the ‘Decentraland Foundation’).  No districts had a legal contract directly with contributors to those districts. 

• District X  (nor any other district) can’t either say that contributors are his investors. Contributors gave 1000 MANA to Decentraland (for a project) and Decentraland gave the districts the land in 2019. That’s why it was very clear that contributing to projects was not an investment, because if it was, the SEC could go after Decentraland (it’s illegal to have investors that have not done KYC).
• Some of the districts that you think are paying their contributors may not be doing that. 
• Do you still believe that ‘Red Light District’ was something even legit? Check this

This applies to every district

Some of the districts that you think are paying their contributors may not be doing that (even the biggest ones). In other words, paying dividends is not something they can do legally since they technically have no investors. The SEC is always watching 👀

The idea for royalty payments could not happen because, IN THE END, Decentraland decided to transfer 100% of all land ownership and operation control directly to business entities (a royalty payment is a payment made by one party to another that owns a particular asset). Because contributors don’t own land in districts, districts cannot pay royalties on something they don’t own.

Who is guilty of this?

Sometimes we want answers that are black or white, but I don’t think I can provide any of these answers. In general, Decentraland was a very early product and made many mistakes. Districts are one of these.

I can also put myself in the place of contributors, seeing that they could have spent that money on land that they could now operate. It sucks. 

I don’t know how to position myself on this. I have mixed feelings. Hope the information I’ve provided allows you to make your own opinion.

Possible solutions

While district owners are not legally required to do anything of this, these are some ideas that could make Decentraland’s future better:

• Decentraland paying 1000 MANA back to the original contributors since they screwed up (not the best idea).
• Execute the plan of paying a percentage of profit into a grant system that would then be accessible to contributors (Rob has suggested doing this but contributors were not happy. I think it’s a good idea and he should ask his lawyer.).

and my favourite…. make a land network where we can give permission rights to the community so we can start deploying stuff!

Most districts have empty land. I’ve been talking with district leaders (including Rob) and they are happy to allocate some of it to the community so they can start their projects. This not only benefits districts (more traffic) but also empowers the community to give them space to create.

If we also execute this plan of paying a percentage of profit into a grant system, we may succeed.

What do you think?

P.S.: on the next blog post, I will address whale voting.

P.S 1:  there are good hopes!