What Is Decentraland?
Decentraland is a blockchain-based virtual reality platform built on the Ethereum blockchain. Like Minecraft or Second Life, there’s no real objective in Decentraland. Instead, users traverse a virtual world, buying non-fungible plots of digital LAND on which to monetize through tokenized, decentralized games, apps, etc. LAND is purchased using MANA, Decentraland’s native ERC-20 cryptocurrency token.
According to the Entertainment Software Association, consumers spent $36 billion on the video game industry in 2017 alone. And CCS Insight predicts 121 million mixed reality headsets will be sold in 2022, up from 22 million sold in 2018. The growing sector of virtual and augmented realities includes more than consumers too.
Decentraland lets you build anything on your plots of LAND, and we’ve already seen what happens when people are given such power. Minecraft servers, for example, contain exact replicas of fantasy worlds, working computers, and all levels of creations. The PlayStation-exclusive LittleBigPlanet has over six million community-created levels that include recreations of other games (Plants vs Zombies is a classic), a working piano, computers, and more.
Not only does Decentraland provide a digital VR land to build on, but it’s hosted on Ethereum’s decentralized servers. The world is rendered using BitTorrent and Kademlia DHT networks too, making it a combination of blockchain and torrent P2P technology.
Hosting game servers takes a large chunk of the ~$6 billion dedicated hosting market, and giants like Microsoft, Sony, Electronic Arts, Valve, Twitch, and Blizzard know it’s neither cheap nor easy keeping people happy in virtual worlds.
Is this blockchain-based VR world powered by cryptocurrency just a jumble of trendy buzzwords, or is this digital world the best blockchain-based OS IRL?
Let’s begin our exploration of Decentraland’s creative project by tapping MANA, the native ERC-20 cryptocurrency token of the Decentraland network.
MANA Cryptocurrency Summary
As of December 4, 2018, the circulating supply of Decentraland is 1,050,141,509 out of a total supply of 2,644,403,343 MANA. The peak price so far was $0.259307 on January 8, 2018.
The Decentraland ICO occured from August 8 through 26, 2017, raising approximately $24 million worth of ETH, BTC, and other altcoins. Of the initial supply:
- 40 percent was sold in the ICO crowdsale
- 20 percent was distributed to the community and partners
- 20 percent was distributed to the founding team
- 20 percent was retained by the Decentraland Foundation.
The money raised from the ICO will be used to fund research and development, marketing and community development, and business and legal operations.
MANA cannot be mined, and once it’s used to purchase LAND from Decentraland, it is burned. Because Decentraland is built on the Ethereum mainnet, LAND is stored in Ethereum smart contracts, and MANA is an ERC-20 token.
We’ll discuss the economics of LAND more below, but they basically work like real estate contracts, with the market adjusting similar to the real-life housing market.
Initial LAND plots sold by Decentraland cost 1000 MANA, but the secondary LAND market has gotten quite sophisticated over time, and single plots cost in the 10,000 to 100,000 MANA range. Plots are often merged into more expensive estates, with a 2,000,000 MANA estate of LAND sold in March 2018 holding the current record for most expensive digital real estate.
Decentraland’s first LAND auction was held in December 2017, and its second LAND auction occurred December 2018. Decentraland also partnered with Binance in December 2018 to allow LAND purchases with BNB for its December 2018 auction.
Aside from LAND, MANA is also used to purchase goods and services within the Decentraland ecosystem. It’s also traded on the open cryptocurrency market.
Approximately $8,500,000 worth of MANA is traded on a daily basis. Markets that accept MANA include Binance, LATOKEN, TOPBTC, Bittrex, and Huobi. MANA trading pairs include BTC, ETC, and USDT.
As an ERC-20 token, MANA is supported by any ERC20-compatible wallet, including MyEtherWallet and Ledger’s Nano hardware wallets.