Decentraland (MANA) is a decentralized 3D virtual reality platform powered by the Ethereum blockchain where users can create virtual structures such as casinos, art galleries, concert halls and theme parks, and charge other players to visit them. The traversable virtual space within Decentraland is called LAND, a non-fungible digital asset (ERC-721) that is divided into […]
Decentraland (MANA) is a decentralized 3D virtual reality platform powered by the Ethereum blockchain where users can create virtual structures such as casinos, art galleries, concert halls and theme parks, and charge other players to visit them.
The traversable virtual space within Decentraland is called LAND, a non-fungible digital asset (ERC-721) that is divided into 16m x 16m parcels. These parcels are permanently owned by members of the community and are purchased using MANA – Decentraland’s native cryptocurrency token. Some parcels are organized further into themed communities, called Districts, allowing users to create shared spaces with common interests.
Decentraland launched in 2017 following a $26 million initial coin offering (ICO). Forty percent of the tokens were sold publicly in the token sale, while the Decentraland Foundation held on to 20%, the founding members of Decentraland kept another 20%, and the remaining 20% was allocated to building the community and funding partnerships.
The virtual world launched its test platform in 2019 and opened the platform to the public in February 2020.
MANA is an ERC-20 token – a fungible token created using Ethereum smart contracts. Before the Decentraland platform launched, the project held two LAND auctions where prospective players could bid for plots. All plots had a minimum bid amount of 1,000 MANA and all MANA spent on LAND during the first two auctions were burned – meaning they were destroyed and taken out of circulation. Registering and reselling avatar names, selling LAND or wearables on Opensea or the Decentraland marketplace also involves burning an amount of MANA each time. The total amount of MANA burned to date can be found here.
In 2018, shortly after MANA made its debut on exchanges, the asset experienced an initial pump and dump as new investors flocked to buy the asset and ICO investors dumped their presale tokens. After that, MANA prices stagnated between $0.02 and $0.17 for about three years until Grayscale Investments (a sister company to CoinDesk) announced the launch of its Decentraland Trust product. Shortly after that update, MANA hit its all-time high of $1.63 in April 2021.
How Decentraland works
According to the official white paper, Decentraland’s protocol consists of 3 separate layers:
- Consensus layer: For tracking ownership of land and virtual items within the game.
- Land content layer: A decentralized storage system for uploading assets and content like audio files.
- Real-time layer: For allowing avatars to communicate and connect with each other in-game.
MANA plays a central role in the Decentraland world and is available to purchase across a range of centralized exchanges including Binance, Coindesk and Kraken. Players can buy and sell a range of in-game items using MANA, including costumes for avatars. Holders of the cryptocurrency can also convert their MANA into wrapped MANA (wMANA) and deposit it into a Decentralized Autonomous Organization wallet (DAO) in order to gain the ability to vote on the future development of the virtual world. 1 MANA token equals a single vote.
LAND owners – holders of tokens that represent a single plot of land in Decentraland – also have voting rights, however, they aren’t required to convert their tokens or deposit them into the DAO. The price of LAND varies considerably depending on location, with an average price of $3,000 to $60,000 on Opensea. In July 2021, a U.S-based investment firm Republic purchased 259 parcels of land for $913,228.20 – the highest recorded purchase on the platform to date.
Key events and management
The Decentraland Foundation, the organization behind the development of the Decentraland software, was founded by Esteban Ordano and Ariel Meilich in 2015. Both have stepped down from their positions at the project but continue to work on it as advisers. The Decentraland Foundation holds the intellectual property rights and maintains the Decentraland website.
According to Crunchbase, investors in Decentraland include venture capitalist George Burke, venture capital firm Fundamental Labs, Genesis One Capital, Fabric Ventures, Boost VC, Animoca Brands and Digital Currency Group, which also owns CoinDesk.
In June 2021, famed auction house Sotheby’s opened a virtual gallery, its first ever, in Decentraland.