Decentraland is a 3D virtual reality that brings humanity one step closer to realizing a unified and sophisticated Metaverse. As a virtual world that runs on the Ethereum blockchain, it enables participants to possess digital property, interact with others via virtual events and activities, play games, create, own and trade art or other assets and more. Members are strongly encouraged to contribute to the evolution of the platform by being active and designing or customizing their own in-world assets. Although it is not the Metaverse, Decentraland strives to recreate the dynamics of the real world.
We’ve already explored other Metaverse-like projects like Sandbox in detail. Although similar, Decentraland has its unique features and properties. Let’s find out more about them.
How blockchain powers Decentraland
Decentraland’s reliance on blockchain is precisely what enables it to become an advanced world with a decentralized internet. As a blockchain-powered solution relying on smart contracts, it is fully decentralized and governed by its members as opposed to a single entity or company.
The virtual space has its own digital economy, with the native token MANA at its core. MANA is Decentraland’s ERC-20 token and is used to buy or sell virtual land, in-game assets, and other NFTs. It also gives voting power to members who can participate in the governance of the virtual world’s decentralized autonomous organization. MANA can be purchased on a number of exchanges for crypto or fiat.
Members can take part in the Decentraland DAO, where MANA and LAND holders are given voting rights and empowered to participate in shaping the virtual reality’s future. This essentially gives the power to members and eliminates risks of corporations or interested parties manipulating the development of the platform in their own interest.
The utilization of blockchain also enables Decentraland to provide full ownership of assets via the use of non-fungible tokens. Users can collect, create, and trade NFT items like land parcels, art, wearables, and other digital assets on the Marketplace. Ownership of these digital certificates of authenticity allows users to play a role in the way the virtual space operates. It also monetizes assets, as they have a financial value in the form of cryptocurrency.
Despite offering a myriad of opportunities, barriers to entry in this economy could be costly as gas fees remain high and NFT prices can be unaffordable for many.
Similarly to other Metaverse-like projects, Decentraland has built its digital world around certain features.
We already mentioned MANA as the native token used in this blockchain-powered gaming platform. It’s the virtual world’s currency, which can be used to purchase assets like in-game wearables, art, digital property, names and other valuables. It also gives voting power to members who want to participate in the DAO decision-making process. Decentraland uses a DAO voting mechanism that requires users to convert their MANA into wrapped MANA or wMANA. Wrapped MANA is locked in the DAO and has the power of one vote in governance proposals.
Originally, a total supply of 2.8 billion MANA was created. However, at the start of 2021, 1.49 billion MANA tokens were in circulation. A significant portion of the MANA tokens were burned during LAND auctions.
LAND in Decentraland is an NFT that portrays digital plots of land that are possessed by community members. Although LAND can be used for a multitude of purposes which we’ll explore in the next section, it’s also used alongside MANA for voting power. Unlike MANA, LAND doesn’t have to be wrapped and locked into the DAO to be used. One LAND token is equal to two thousand votes. Decentralanders who own many separate plots can merge them into a unified Estate token. The voting power of the Estate token is based on the number of plots it consists of.
The Decentraland world is made up of 90,601 LAND parcels. Every LAND slot is independent, holds the size proportions of 16m x 16m (256 square meters) and possesses its own coordinates. The Decentraland space is divided into separate districts, which usually share a common theme. They are a result of MANA token crowdsales and what’s specific for these districts is that their LAND cannot be traded.
The Marketplace enables players in Decentraland to manage their on-chain assets. They can trade with other users, sell or buy virtual parcels and LAND Estates, virtual wearables, unique names and other NFTs. They can also interact with other members, transfer in-game assets, explore the map of the virtual world, name their virtual property, permit other users to explore their LAND and more. In a nutshell, the Marketplace is the place to be. As defined by the Decentraland website, it’s a “one-stop-shop for the very best digital assets”.
Earlier, we mentioned that Decentraland members are encouraged to contribute to the virtual reality by creating their own assets. Decentraland’s Builder is designed to make this process easier, by offering an easy to use visual editor tool. It enables members to create and publish Decentraland scenes. Scenes are simply virtual experiences created on virtual parcels, like games, art galleries, shops or other interactive experiences. They encourage other Decentraland members to engage with your creations.
What can you do in Decentraland?
With the ambition to recreate the world as we know it, it’s only natural that Decentraland strives to offer its members a vast diversity of virtual experiences and opportunities. Although still not in its fully-fledged form, today Decentraland comes with a multitude of activities and use cases.
Buy, sell or rent land
Virtual land is a unique digital asset that is the foundation of the Decentraland virtual space. Users can become LAND owners, they can sell their LAND to others, or rent it, generating a recurring financial income for the owner. For example, EnterDao, a project incubated by LimeChain, created LandWorks. The product is an Ethereum-based Metaverse land renting marketplace that enables period-based renting of virtual property.
The existence of virtual property in Decentraland indicates that it can be a lucrative option for investors. However, LAND is not all that can be invested in. Users can invest in valuable NFTs like art, wearables and other assets as part of a long-term strategy.
Perhaps the most attractive element of Decentraland is the ability to create and share your own virtual creations. The platform encourages the development of an open, shared, and integrated metaverse, where members can express their personalities and help shape the future ahead of Decentraland. Creations can be in the form of buildings, avatars, art and more.
Visit events and participate in activities
Decentralanders can also explore different virtual events like virtual concerts, art exhibitions and others. They can participate in social activities and visit casinos, play games, take part in fashion events, organize virtual meetings, and even visit digital nightclubs.
The availability of virtual property also gives rise to another opportunity in Decentraland – advertising. Brands can rent virtual land or buy their own to create billboards with advertising messages on them. The traffic that passes through the digital spot will become familiar with the brand, leading to more brand visibility that originates from the virtual world.
What is the outlook for Decentraland?
Since its official launch in 2017, Decentraland has grown to become an attractive, infant-stage version of the Metaverse. There are ongoing changes to the platform, thanks to the contribution of members and the evolution of blockchain. Some of the major concerns around its Ethereum-based nature and high gas fees are also approached with the transition from proof-of-work to proof-of-stake.
However, Decentraland is still challenged with evolving to the state of becoming part of a unified, interconnected and sophisticated Metaverse.
At LimeChain, we have contributed to the creation and advancement of a number of blockchain-based projects. If you are looking to start a revolutionary blockchain project and need reliable experts by your side, get in touch and let’s talk about how we can help.