What is Decentraland and Why It Could Change Business as We Know It
Though Decentraland has recently entered the news cycle, this virtual world has been around for a while. Its development hit its first milestone in June of 2015, with the release of a 2D grid that allocated pixels via a proof-of-work algorithm called the Stone Age. Throughout the next two years, the project went through two upgrades, the Bronze and Iron Ages, before officially launching in 2017.
It lingered more or less in obscurity until January of 2021, when interest in NFTs (non-fungible tokens) spiked. Everyone is now left wondering if they should invest in virtual real estate and if Decentraland and similar platforms can disrupt world economies.
How Does Decentraland Work
The simplest way to explain Decentraland is to compare it to sandbox games. Popular titles in this genre include the GTA and Elder Scrolls series. However, the best comparison is likely Minecraft, as it also incorporates low-poly 3D graphics. So, users can roam a vast map, exploring, interacting, and transacting with each other. They can also create content which they can later monetize.
Decentraland runs on the Ethereum blockchain, whose coin, Ether, is likely the second most popular cryptocurrency on the market. The platform uses this blockchain to store information and maintain ownership records. Every transaction that happens in Decentraland gets validated through Ethereum smart contracts. Its protocol consists of three layers, and in the first one (consensus), ownership gets tracked via said contracts. The second one is the land content layer, which renders the world, and the third is the real-time one where peer-to-peer connections get established.
3D models used here get created in popular software like Blender and SketchUp, and the development team is working on a VR platform using A-Frame.
The Potential of Decentraland’s Economy
Decentraland’s scripting language enables the development of dynamic 3D scenes, applications, games, and even gambling software. The latter is particularly intriguing, as game developer Atari just announced that it signed a two-year lease for parcels in Decentraland so that it could construct the world’s first virtual gaming venue. Currently, the closest thing to an authentic casino experience internet users can get are live dealer games. However, in Atari’s venue, which launches in May, they will be able to wonder a 3D establishment, play games, and socialize. In many gamblers’ eyes, this is undoubtedly a game-changer for live dealer casinos, as it will elevate the genre to new levels.
Given that this platform’s user base is ever-growing, it has limitless advertising potential. Companies can promote their products and services here through methods not possible in the real world. Also, specific neighborhoods high in foot traffic could become virtual equivalents to Time Square or Downtown Los Angeles.
Digital collectibles are a hot trend, and trading assets via a blockchain should explode soon. Given that Decentraland lets users create content, which they can trade or sell, its financial possibilities mimic that of the physical world. Some may say that they are even more robust.
MANA Drives Decentraland’s Virtual Economy
Decentraland’s currency is MANA, a native ERC-20 token with a limited supply. Every time some purchases an NFT (non-fungible token), the platform burns a percentage of its MANA supply. Non-fungible signifies something unique. For example, an artwork is non-fungible, while currency, such as Ether or MANA, is fungible.
MANA traded at $0.08 in January. Thanks to the recent press, it hit $1.6 in mid-April. It has no use outside Decentraland. Its principal purpose is to facilitate the purchase of LAND parcels.
Decentraland Is Igniting a Virtual Real Estate Boom
When the platform launched in 2017, its developers sold LAND for around $20 apiece. A parcel is a 33×33 feet plot. During the initial auction, users spent over 161 million MANA on 34,356 LAND parcels, amounting to roughly $30 million. LAND gets sold at the Decentraland Marketplace and on secondary ones. It is an NFT, and such tokens have skyrocketed in popularity as of late.
Singapore entrepreneur Vignesh Sundaresan paid $69.3 million this year for a digital artwork titled Everyday: The First 5,000 Days. Celebrities such as Mark Cuban and Lindsay Lohan are also investing in NFT, and crowdfunding platform Republic Real Estate is now advising people to buy virtual land. They have also set up their digital investment fund.
For now, virtual metaverses are here to stay, thanks to their Generation Z appeal. The MANA price has jumped tremendously in 2021, and what was once a barren wasteland is slowly filling with content as the Decentraland’s user base grows each day.
There is also a slew of metaverse competitors out there that are also gaining traction. The most notable ones are Somnium Space, The SandBox, and Axie Infinity. The latter recently sold nine plots of virtual land for $1.5 million.
About the Author
Shelly Schiff has been working in the gambling industry since 2009, mainly on the digital side of things, employed by OnlineUnitedStatesCasinos.com. However, over her eleven-year career, Shelly has provided content for many other top interactive gaming websites. She knows all there is to know about slots and has in-depth knowledge of the most popular table games. Her golden retriever Garry occupies most of her leisure time. Though, when she can, she loves reading Jim Thompson-like crime novels.