Decentraland – Explaining the Most Active Metaverse of the Year

What is Decentraland?

Decentraland is a decentralized virtual world, or a metaverse, where people can sell, buy and build virtual property stored on the Ethereum blockchain. In this virtual world, people can own their digital assets and create anything in their spaces. In Decentraland, users can buy land, known as parcels. This land and virtual any property built on it is an NFT called LAND. On LAND, users can build casinos and social media platforms or offer services for education, tourism, and much more. Many large corporations such as Nike and Coca-Cola have already established their presence inside Decentraland. Fidelity Investments has also established a residence within the Decentraland metaverse.

Tokens

The three types of Decentraland tokens that fuel its digital economy are:

MANA
LAND
Estate

MANA is the currency of Decentraland, which can be used to buy or rent LAND and other goods and services. MANA is an ERC-20 fungible token.

LAND is a type of ERC-721 token. Each LAND token is a unique non-fungible token and represents a unique 16m x 16m parcel of digital real-estate within Decentraland. MANA is burned, or spent, in exchange for LAND parcels.

Estate is the third token and, like LAND, is also a type of ERC-721 token which is non-fungible and unique. Estates are collections of LAND parcels that are directly next to each other.

All three tokens are interlinked. Tokens are used to pay for the land, items, and entertainment. MANA can be traded on cryptocurrency exchanges. When LAND is bought in exchange for MANA, that latter is burned, which means there is a finite supply of MANA. Users store these tokens in crypto wallets.

How Does it Work?

Decentraland’s metaverse consists of three key elements: a decentralized ledger for ownership, a protocol to describe the contents of parcels, and a network for social interactions. The protocol consists of three layers:

The consensus layer tracks land parcel ownership through Ethereum’s smart contracts.
The LAND content layer is responsible for the happenings in each parcel and rendering the content in the virtual world.
The real-time layer provides peer-to-peer connections for user avatars.

How to Invest in Decentraland?

To invest, potential investors have to buy MANA using centralized exchanges. To do this, they can choose a cryptocurrency exchange, create an account and buy the token. Moving forward, investors can stake MANA and generate yield income on their staked investment.

Decentraland Governance

Decentraland is governed by MANA, LAND, and Estate holders instead of a centralized entity. These holders dictate what happens within the virtual space. This governance system is known as the Decentraland DAO (decentralized autonomous organization). Any changes in the space are voted by the users who hold wrapped MANA and LAND. Wrapping means that users cannot spend or transfer their MANA until the voting process is adjourned.

Users who own more tokens have more units of power. For example, each MANA has one unit of power. Decentraland also has a Security Advisory Board of five members who review governance proposals and supervise bug reports. The board makes decisions that positively affect Decentraland.

What is Decentraland Marketplace?

Decentraland Marketplace is like other NFT marketplaces in the digital ecosystem, but it works slightly differently as a metaverse project. The marketplace is where users trade and manage all Decentraland on-chain assets. Each transaction in this marketplace burns MANA. The value of burnt MANA is the fee charged for the transaction. The marketplace is tailored to users’ comfort, and the layout they see of the marketplace is what they want to see. For instance, when users select an NFT shown on the main layout, they would see specific information on that NFT, such as price, bids, and transaction history.

Users can then choose their actions, such as placing a bid or buying the NFT. Decentraland is different from other NFT marketplaces, especially regarding payment methods. Decentraland Marketplace does not support PayPal or credit cards. This means that users need to have MANA-tokens to navigate the marketplace. MANA can be obtained through bigger centralized exchanges.

What Companies Are Using Decentraland?

Many companies have seen the potential of investing in Decentraland and are making their marks in the metaverse platforms. Some of these companies include:

Samsung

Samsung 837X is Samsung’s metaverse store in Decentraland. Its design is based on the company’s flagship store in New York City, where users can experience all products virtually. Samsung hosted the unpacked event at 837X in the Decentraland.

Atari

Atari, the pioneer of gaming brands, owns virtual property in Decentraland, popularly the Atari Casino. Visitors can play Atari-themed games and attend branded events here.

Prager Metis

Prager Metis opened a virtual office building in Decentraland, claiming that businesses will need to use these when metaverse replaces the internet.

Nike

In 2021, Nike acquired the RTFKT (Artifact). The Artifact is a digital fashion brand in the NFT community which has launched wearables in the metaverse.

Coca-Cola

Coca-Cola launched their NFT collection in Decentraland, followed by a celebration in the virtual world where they auctioned the NFTs. Users attending this celebration won NFTs. A Coca-Cola friendship box NFT package was also launched during this auction to commemorate Friendship Day.

Sotheby’s

Sotheby’s has a virtual gallery in the Decentraland metaverse. The company auctioned its artworks in this gallery, and the work of famous artists was displayed there.

Future of Decentraland

Decentraland is unique in the market, but it is still in its developing stage. It has progressed through several stages, namely the Stone Age and the Bronze Age. There is no doubt that this virtual metaverse will gain popularity because of the current generation’s appeal to it. In the future, new features will continue to be added to allow users to explore the creativity of entrepreneurs and gamers worldwide.

The goal of Decentraland is to establish its own economy whereby people can trade their assets and entertain themselves inside the game. Decentraland’s worldwide acceptance will allow a change in the ecosystem of business and experiences.