Soon after the blockchain technology went mainstream and everybody knew what Bitcoin was, people started to talk a lot about virtual assets, tokenization and how this could all change the world. Many people, the famous doomsayers of always, have affirmed that it was all hype and that none of this would bear fruit.
They were wrong… sort of. While the hype train ended up in a trainwreck for many projects and whole tokenization and the digital thing did not work out as intended for more than half of the people who tried it, some companies did achieve a moderate level of success. The company that we’ll talk about today, Decentraland, has reached a high level of success.
What Is Decentraland And Why Should You Care?
Decentraland was often described as one of the most ambitious projects in the whole crypto space and this is not far from the truth. The company has created a market for VR-enabled parcels. The company has been often described as a blockchain and VR version of the Second Life game.
Second Life, which helped to pioneer virtual economies and to let players create their own lands and build homes while interacting with other players is certainly an inspiration for Decentraland. By using the virtual currencies in the game, you will be able to buy in-game digital goods.
This company tackles the main issue of ownership in a digital space. While you could “buy” assets in Second Life, they were actually owned by the company. The difference here is that by adding decentralization, Decentraland will let its players really own their goods.
This is the main difference. In this new program, you own your digital assets for real. Real estate, for instance, is sold and represented by LAND tokens. You can purchase LAND with MANA, the native token of the platform which also can be used for voting (see more at the end of the article).
All the ownership of LAND tokens is kept on the Ethereum network and you have full control over how you are going to use your LAND tokens. The terms of service from Decentraland even state that you are the sole owner of your tokens.
The Economy Of Decentraland
Sure, the idea is to take virtual assets to the next step. However, no market would work without a good economy. The Block Crypto has used data from NonFungible.com to analyze the economy of this new ecosystem.
From January 21 to October 22, 2018, Decentraland had 39,000 transactions which represented $23.5 million USD in MANA tokens. This, it should be noted, represent MANA spent to buy things, not the total volume of the economy.
On its analysis, The Block Crypto perceives that the economy had an initial boom and then it was slowly going down until August 2018, then it spiked in September for a record high and it went down (but not a lot) in October so far. However, they were not able to fully understand what caused this trend, as there is no proof that something internal or external caused the market to be revitalized.
Part of the reason, though have been the fact that one single address contributed to over 36% of the full activity in a month after spending $555,000 USD in MANA tokens over 312 transactions to purchase LAND.
Each LAND parcel represents a 10M² (33 ft x 33 ft) land in which you can build things, rent it or sell it. It was also noted that while the average price for a LAND parcel is $602 USD but the highest one was sold for the incredible amount of $175,000 USD.
Decentraland’s Polls Are Now Open
The company has also officially launched version 2.0 of its Agora voting platform, which lets the community have a say in the development of the ecosystem. Votes are based on the ownership of MANA tokens. The questions which are being voted right now are “Should we remove the ability to pause MANA transactions?” and “When should the next LAND auction be held?”
These questions will be relevant to understand if the current security system used for the ecosystem is popular and it should be maintained and about the 9,000 unowned LAND parcels that will be available for the community to buy.
At the time of this report, MANA tokens were worth $0.073 USD each, which made the project the 72nd largest token in the market with a market cap of $76 million USD.