As digitization has spread, opportunities to connect with others online have grown exponentially. With additional social distancing restrictions in place due to COVID-19, more people are turning to the internet to interact with others, entertain themselves, and even seek out money-making opportunities.
Shared virtual spaces (or metaverses) like Decentraland are getting an increasing amount of attention because they are the next frontier for online entertainment and interaction. They enable the three branches of reality — physical, virtual and augmented -— to intersect and converge. Here is a practical introduction to Decentraland.
What Is Decentraland?
Founded in 2015 by Ari Meilich and Esteban Ordano, Decentraland is a 3D virtual reality platform powered by the Ethereum blockchain. On it, you can buy plots of land to build upon, monetize or simply explore. Users can create, experience, and trade content and applications. Unlike virtual worlds which are owned and managed centrally, both the platform and content are owned by their users.
Decentraland comprises a total of three layers: a consensus layer, a land content layer and a real time layer. What started off as a pixelated grid that allocated pixels to users through a proof of work algorithm evolved into a 3D world later on. Decentraland is most frequently likened to Second Life, a popular online game/world that was launched in 2003. However, it goes beyond the scope of a typical virtual reality game by allowing users more power and control to experiment with.
In 2017, Decentraland raised an Initial Coin Offering (ICO) of 26 million in just a little over an hour. It was officially opened to the public in February 2020, and is overseen by the nonprofit Decentraland Foundation.
What Is MANA?
MANA is Decentraland’s ERC20 cryptocurrency token. Decentraland users spend it to buy plots of digital land and pay for goods and services from other users. The MANA used to purchase LAND are burned, meaning those tokens are destroyed. For example, let’s say you paid 10,000 MANA for a piece of digital land. The 10,000 MANA are then sent to an address (a burn address) without private keys. After that, the tokens are lost forever and removed from the total supply of MANA.
MANA is limited to a total original supply of 2,805,886,393. As of August 17, 2021, the total Circulating supply is the number of cryptocurrencies or tokens that are publicly available and circulating in the crypto... is 1.8 billion MANA, with a market capitalization of $1,509,985,208.
What Is LAND?
LAND is a non-fungible token (NFT) representing virtual pieces of land in Decentraland, and is maintained using an Ethereum smart contract. An NFT is a completely unique token on the blockchain that cannot be exchanged.
Each digital land parcel measures 16 meters x 16 meters, and is identified by a unique set of Cartesian coordinates (x,y). It can be neither recreated nor duplicated. You can buy and sell LAND with MANA and create applications, games, dynamic 3D scenes, casinos and more.
The number of LAND parcels is capped at 90,000. You can purchase adjacent plots to create LAND estates. A district is a community of adjourning parcels of LAND with a shared theme, thus forming a community.
You can vote on issues concerning your community using Agora, Decentraland’s voting DApp. Your LAND holding in a specific district directly correlates with the weight of your vote. Agora gives you control over what happens in your district and enables you to provide feedback on the platform.
How Much Does MANA Cost?
According to Coinmarketcap, the price of one MANA as of Aug 17, 2021 is $0.8438.
How to Buy MANA
While you can’t buy MANA directly on most exchanges, you can typically trade Ethereum for MANA. You can buy MANA either with a limit order or a market buy. A limit order involves setting a price that you aren’t willing to exceed, while a market order will be executed at available prices in the order book.
Where to Buy MANA
You can buy MANA on most major exchanges — Binance, OKEx, Tokocrypto, CoinTiger and Huobi Global. Of these, Binance and OKEx have the largest trading volumes. You can pay with either Bitcoin or Ethereum.
If you want to buy LAND, however, you may need to look at the best NFT marketplaces to buy, sell or rent land.
How to Store MANA
Decentraland MANA is an ERC20 token built on the Ethereum blockchain, which allows it to be stored in a wide range of hardware or software wallets. Here are our top five crypto wallet picks:
Trust Wallet: Trust Wallet is a software wallet popular among investors and traders. It’s also officially supported by Binance. A convenient and safe place to store your MANA, it also provides backup options for greater peace of mind.
Ledger or Trezor: These encrypted hardware wallets are secure ways of storing MANA. They use high-end encryption technology to keep your funds safe from even the most sophisticated network attacks. Hardware wallets store your wallets offline, thus adding an extra level of security.
Atomic Wallet: Atomic Wallet is available in Android, iOS and several desktop versions. You can store your MANA and 300 other cryptocurrencies in it. Atomic Wallet also offers atomic swaps and a built-in exchange that users can utilize to swap back and forth between supported digital assets, including MANA.
MyEtherWallet: MyEtherWallet is a web-based wallet that allows you to store all ERC20 tokens, including MANA, on the Ethereum blockchain. You won’t have to download any clients or software to use it.
Exchanges: You can store MANA on any exchange which supports it. This is the least secure way to keep MANA, and it’s not what we’d recommend. However, for active traders who need quick access to funds at any time, exchanges are always an option for storing the MANA token. Try to choose larger exchanges that have a proven record of security and reliability. A few of these include Binance, Kraken and Kucoin.
Is Decentraland MANA a Good Investment?
As real estate in the physical world heats up in popularity, Decentraland has also gathered hype in virtual space, gaining significant coverage from traditional news outlets. Investing in Decentraland could come with a highly lucrative payoff. But what are the factors that give rise to such an optimistic outlook? Let’s look at some of the reasons for the bullish sentiment behind MANA.
Pros of Decentraland (MANA)
Unique digital property rights
Decentraland gives users a gamified experience that is unique, scarce, and without constraints from a centralized authority. Users are in control of creating their experiences, and benefit from the value that’s generated. To ensure decentralization, the smart contracts are governed by a decentralized autonomous organization where users can vote on changes. Users truly own their collectibles within the metaverse.
Strong momentum in 2021
MANA’s volatility also presents opportunities to profit by trading its sharp rises and dips.
Largest virtual land sale
Republic Realm, a division of the online investment platform Republic, bought 259 parcels of virtual land in Decentraland for $913,228.28. This single transaction is the largest LAND acquisition in the history of Decentraland. It removed 1,295,000 tokens from the total MANA supply.
More MANA will be taken off the market with further LAND purchases in the future. This will decrease the circulating supply of MANA, while also decreasing the number of tokens that can be bought. Scarcity could drive the price of MANA to new all-time highs.
Prominent institutional investors
On Wednesday, March 17, 2021, Grayscale Investments, the largest digital currency assets manager, launched Grayscale® Decentraland Trust alongside four new digital currency investment trusts. Grayscale currently has $14.8 million of MANA assets under management. Even more impressive, their return on investments (ROI) stands at 218.73%.
These numbers are in the public domain and could encourage other institutional investors to choose the token. Sizable investments by well-established companies are often influential drivers of asset price and could support MANA long-term.
Digital Coin Price predicts that MANA could trade at $1.22 by year-end, and $3.54 by 2028.
Valuation with room to grow
Due to an abundance of tools, software engineer and developers are coming up with an increasing number of interactive 3D games and applications. Decentraland (MANA) ranks third in market valuation of NFT crypto trading assets after Chiliz (CHZ) and Enjin Coin (ENJ).
MANA is assumed by many traders to be trading at a price lower than its intrinsic value. This makes the MANA token a good investment for value investors, who can take advantage of the gap between market value and intrinsic value.
While there are many good reasons to buy MANA, it’s important to keep in mind the risks associated with doing so.
Cons of Decentraland (MANA)
As with the rest of the cryptocurrency space, regulation can negatively impact pricing. Cryptocurrencies have attracted increasing regulatory attention, which in the future could translate to bureaucratic requirements or a limit on the trading of cryptocurrencies.
Stiff competition in the NFT and virtual world spaces
Decentraland has been growing quickly because it’s also an NFT marketplace. However, it’s not the only player in the NFT field. Marketplaces such as Axie Infinity (AXS), Crypterium (CRPT) and Algorand (ALGO) are giving Decentraland a run for their money. For example, in market valuation, Decentraland still trails AXS and ENJ.
The virtual reality space is also growing, with other virtual worlds like NEOLAND and High Fidelity vying for a slice of the crypto markets pie.
Decentraland is a virtual reality platform for users to take full ownership of their digital real estate: essentially the owners, you can buy land, build tools, play interactive games, trade and experience virtual reality in many forms. Banking on your imagination, you can then create experiences as you wish. New users will be surprised by how versatile this shared virtual world can be.
Participating in a metaverse provides an exciting glimpse into the future. Do note however that no investment advice guarantees returns. As with any cryptocurrency, be sure to trade with proper risk management in place for the best possible experience.