What is Decentraland?
Founded in 2015, Decentraland founders are Ari Meilich and Esteban Ordano. Decentraland operates from San Mateo, California. In its initial days, the Decentraland platform was divided into pixelated grids. The allocation of these grids was done through the Proof of Work algorithm.
Decentraland is a virtual world built on the Ethereum blockchain. It enables users to purchase land in its virtual world known as a parcel. When anyone purchases land on the virtual world of Decentraland, the details about the deal is recorded on the blockchain.
Decentraland has raised $25.5M in funding from six high-profile investors. It includes Animoca Brands, Boost VC, Fabric Ventures, Genesis One Capital, Fundamental Labs, and George Burke.
What Problem Does Decentraland Solve?
The founders of Decentraland believe that centralized platforms like Facebook and other platforms hold too much control over the content and data. Centralized platforms have developed a large community of users. They leverage it to extract revenue from them. That is the problem that Decentraland aims to solve.
The idea behind developing Decentraland was to create a network where content creators will have full control over their content and not some centralized body. With Decentraland, content creators and users can transact directly without the involvement of any third parties. It will enable a low-cost payment mechanism that will alter the way how the world of internet commerce operates today.
How Does Decentraland Work?
As described, Decentraland is a virtual world. You can compare it to popular games like Skyrim and Fallout. But in Decentraland, you aren’t playing on a 2D screen. Instead, you are actively participating in a 3D world of Decentraland.
On Decentraland, you can buy land, build content on it, visit places, buy goods and services, all in a virtual world powered by Ethereum blockchain. Each plot of land is 33 × 33 feet, and there can only be 90,000 parcels of land in Decentraland. Whenever a user buys land, the Decentraland app tracks it through LAND tokens. To track the ownership of the land, the Decentraland application relies on the Ethereum blockchain. Landowners are free to build applications on the land they own and monetize it.
The architecture of Decentraland is multiple-layered. It means that it consists of multiple components. These are the consensus layer, content layer and the real-time layer. The details about ownership over land are stored in the consensus layer. Just like the real world, every land on the Decentraland also has unique coordinates. The consensus layer also contains the description representing the type of content the land hosts.
The content layer, on the other hand, has full control over what is happening on the land, known as a parcel in Decentraland terminology. It also hosts the content meant to be shared in exchange for payments. The last layer of Decentraland is a real-time layer. It enables users within the virtual world to communicate with each other through voice message and chats.
There are two tokens on Decentraland. The first one is LAND, which is an ERC721L non-fungible token (NFT) denoting the ownership right over the land bought. The second token is known as MANA, which is an ERC-20 token. You can use MANA to pay for services in the virtual world and also buy land on Decentraland.
MANA powers the economy of Decentraland, and every product and service there are priced in MANA tokens. The maximum number of MANA tokens is capped at 2.6 billion. Just like any other ERC-20 token, you can buy and sell it.
Currently, the market cap of MANA tokens is almost $2.3 billion, with a circulating supply of 1,578,089,913 MANA. LAND Tokens, on the other hand, are not currencies. Hence, they are not interchangeable. They indicate ownership over virtual land on Decentraland.
How is Land Valued in Decentraland?
The valuation of land on Decentraland follows the same pattern as to how land valuation works in the real world. Just like in the real world, the location of your land will play a crucial role in deciding its price. The other crucial factor is the development of the land. So, a combination of the location of your land and development on it will influence its prices.
If you have built something really interesting on your land, like a virtual art gallery or a very engaging game, more users will visit your land. Any land near the districts like Crypto Valley or Dragon City, or others will fetch higher prices. If you are a buyer, you will have to pay higher prices to buy land near the districts. The prices are also high near Genesis Plaza, from where the users enter the virtual world.
To earn more MANA on your land, you can purchase a parcel adjacent to it. If you own two or more adjacent lands, it will be known as an estate. Owning an estate in Decentraland means you can develop larger projects on your virtual land holding, and thus, you will fetch higher prices for your land.
How to Buy Decentraland (MANA)
Decetraland (MANA) is available on the following exchanges:
Kraken is the best option for USA residents.
Binance – Best for Australia, Canada, Singapore, and most of the world. USA residents cannot purchase MANA here. Use Discount Code: EE59L0QP for 10% cashback off all trading fees.
How to Store Decentraland (MANA)
If you seek to make a major investment in Decentraland (MANA) or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support Decentraland (MANA).
Decentraland – The Leader of Virtual World Space
In today’s age and time, when the world is rapidly moving towards digitization, Decentraland has successfully managed to monetize the virtual 3D world. There are other virtual world platforms operating today, but none have succeeded to stand out like Decentraland.
The price of MANA tokens stands the testimony to the success that Decentraland has achieved. From the lows of $0.007883 on 3 October 2017, MANA has achieved its highest price of $1.63 on 17 April 2021, all within four years. With land prices soaring on Decentraland amid increasing interest in buying land in its virtual world, further growth in the demand for MANA tokens is almost guaranteed.