While the metaverse isn’t new, interest in its groundbreaking potential has skyrocketed so much during the past year that even the most popular social network in the world rebranded itself to capitalize on it.
This growing interest in online virtual worlds that incorporate 3D holographic avatars, virtual reality, augmented reality and other modes of communication have naturally extended to metaverse platforms like Decentraland, one of the largest available, which has a market capitalization of $5.45 billion in 2022. Valued at around $4.09 billion, Decentraland’s MANA coin is among the biggest of the metaverse cryptos, next to The Sandbox (SAND).
Here’s a closer look at the Decentraland token and whether it’s a worthy investment.
What Is Decentraland (MANA)?
Decentraland was launched in 2017 by Ari Meilich and Esteban Ordano. Running on the Ethereum blockchain, the 3D virtual world platform includes customizable activities, art and land. It aims to incentivize global users to participate in a shared virtual world, combining virtual reality and blockchain technology.
In Decentraland’s virtual world, players buy and sell real estate while playing games and interacting with other users. The platform uses non-fungible tokens — or unique, non-interchangeable units of data stored on a blockchain — and these NFTs represent Decentraland’s 90,000 plots of land.
The platform’s MANA coin is the cryptocurrency that’s used to buy virtual goods and services, while LAND is an NFT token that defines ownership of land parcels that represent digital real estate.
How Many of Decentraland’s Mana Coins Are in Circulation?
Around 1.82 billion MANA tokens — or 82% of the total 2.19 billion supply — are in circulation in 2022. Trading between $2.79 and $2.93 on average, the MANA coin’s market cap stands at around $4.09 billion, making it the 31st largest crypto.
During Decentraland’s $24 million initial coin offering in 2017, 40% of the MANA coin’s 2.8 billion supply was sold. Of the remaining amount, 20% was reserved to incentivize the Decentraland community, 20% was reserved for early contributors and development teams, and the remaining 20% was held by Decentraland.
That original 2.8 billion in MANA tokens was reduced, though, after more than 600 million of them were burned due to LAND auctions. There’s potential for further burn mechanisms to reduce the current marketplace.
How Does Decentraland Work?
The Decentraland app tracks LAND tokens that define real estate parcels. The platform uses the Ethereum blockchain to track this digital land and requires players to own MANA tokens that must be kept in Ethereum wallets if they want to participate in the ecosystem. Developers can innovate within the platform to design interactions and animations on their virtual real estate.
Here’s a closer look at how Decentraland works.
Decentraland maintains a ledger tracking the ownership of its land parcels. Each LAND token has unique coordinates in this metaverse, referencing a description file that represents the content within the LAND parcel.
The platform also has a content layer that controls what happens within each LAND parcel, including script files that define the behavior and placement of referenced content and content files that specify visuals and static audio. This layer also includes the interaction definition file, which delineates peer-to-peer interactions like messaging, gesturing and voice chat. Lastly, the real-time layer enables social interactions through messaging, voice chat and user avatars.
Marketplace and Builder
Decentraland also has a marketplace and a drag-and-drop editor that players use to access build scenes. Within this marketplace, players can exchange and manage their LAND tokens. Players can also use them to buy in-game items such as unique names and wearables. All transactions that players execute are settled between Ethereum wallets, with the blockchain verifying and logging these exchanges. Decentraland’s extensive builder tools allow users to create a unique experience within their LAND parcels.
Is Decentraland a Good Investment?
As stated said earlier, the Decentraland coin is one of the top cryptocurrencies in terms of market capitalization. This past year, it’s been one of the best performing tokens, with returns of up to 5,300%. Its growing popularity has been fueled by luxury brands like Gucci, Burberry and Louis Vuitton entering the metaverse via NFTs.
Does Decentraland Have Any Other Competitors?
While it does face competition from other virtual worlds like The Sandbox, Decentraland’s more user-friendly, with the ability for players to become real-estate moguls by purchasing cheap land NFTs and selling them for profit. Moreover, since the game is free to play and can be run in a browser window, it has the potential to become a major virtual reality platform like Second Life.
Is It Worth Investing in Decentraland?
All of these factors make Decentraland one of the best crypto investments. It’s already attracted large institutional investors such as Grayscale, and its growth potential is massive. Moreover, with the metaverse gaining even further traction, Decentraland may well be one of the best ways to profit from this growing trend.
However, just like other cryptocurrencies, Decentraland is subject to the volatility of cryptocurrencies. This means that its price can change rapidly and at any given moment, which will make it difficult for you as a trader to predict what the future looks like. It also suffers from regulatory risks since most countries have yet to establish laws for virtual currencies.
Although there are several risks associated with investing in Decentraland, it’s still one of the best ways to profit from the metaverse trend right now. How it performs in the future depends on how it’s adopted, which is determined by demand. As more people join Decentraland, the value of MANA will likely skyrocket, making it a good investment.
Decentraland (MANA) FAQHere are the answers to some of the most frequently asked questions about Decentraland (MANA).
- How do I buy Decentraland?
- You can buy the Decentraland coin MANA through most major crypto exchanges like Binance, Coinbase, and eToro. All you need to do is sign up to one of these trading platforms. The signup process often requires you to verify your identity by submitting your address, driver's license picture and Social Security number.
- Most trading platforms accept ACH deposits, allowing you to start trading immediately. Once you deposit your funds, you can choose the trading pair you want, like MANA to the pound sterling, GBP. Set the price you'd like to purchase the crypto at and complete your transaction. It's a good idea to transfer your crypto to your Ethereum wallet as quickly as possible for maximum security.
- Is Decentraland safe?
- Decentraland has a good reputation for security due to its use of the Ethereum blockchain. Since transactions are recorded on-chain, they're also verifiable and trackable. In addition, transactions are stored in a decentralized ledger, making them difficult to hack.
- However, since it's an ERC20 token built on Ethereum's blockchain network, its security is still subject to that of Ethereum. If the blockchain were to suffer a successful attack, it could spell disaster for Decentraland's network as well.
Decentraland has managed to create a unique blockchain platform that allows users around the world to freely buy and sell virtual real estate. Whether it’s going to maintain its status as top crypto or not depends on how it’s adopted by the virtual reality community. No matter what, Decentraland is one of the best ways to profit from the growing metaverse trend right now.
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