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Recently a plot of land sold for almost 1 million dollars, however, you will not find this land in the United States or even on Earth. Instead, this land lies within the decentralized virtual world of “Decentraland”.
Debuting in February of 2020, Decentraland quickly entered the news cycle when it was discovered that users were making 500% returns buying and selling digital property on the platform.
What is it?
Everything in Decentraland with the exception of some pre-established roads and plazas can be bought, sold, and developed upon by users. All ownership of this virtual land and property is documented on the Ethereum blockchain allowing them to be easily transferable and fraud-proof. Landowners have built a plethora of structures including simple buildings, casinos, art galleries for NFTs, and digital shopping malls.
LAND and MANA
The world of Decentraland is divided into 90,000 16m x 16m NFT parcels called LAND. This 90,000 cap and the aspect of scarcity is one of the main features investors point to when speculating their value as the Decentraland platform grows. LAND can be purchased either on third-party NFT platforms like OpenSea or through an in-game marketplace with Decentraland’s native cryptocurrency MANA. MANA can be bought on exchanges like Coinbase.
What brings people to Decentraland?
The success of Decentraland will be dependent on the community building a set of robust features and experiences for virtual visitors to enjoy. Just like in real life, the value of your LAND is a function of its location and the properties built upon it. Things like casinos, NFT art galleries, virtual concerts, and games bring more and more users into the metaverse. Real-world brands like Atari are interacting with and providing experiences to users with more brands expected to join.
The community of Decentraland is already vibrant and growing. Different in-game areas like Genesis Plaza, Vegas City, and Dragon City have become meeting grounds and represent the highly desirable real estate. There is even a virtual Silicon Valley where users can visit to pitch to potential investors. These cities host conferences and virtual adaptations of real sporting events. The events cause users to gather and LAND owners can even rent out their properties to attendees for MANA.
Investing
The two assets related to Decentraland, LAND and MANA, will grow as more users join the platform. Owning LAND will cost over $5,000 on average and MANA is currently trading at around 70 cents. Evaluating an investment in LAND will work very similarly to buying real-life real estate as investors should closely consider location and surrounding experiences. MANA price appreciation should more closely track the active users of the platform.
Decentraland is an interesting and fun concept built on Ethereum. It gives those who participate a somewhat unique way to interact with others online, display NFTs, and gather. You could argue that it is a very expensive MMO game, as it has certain features that you may find in an MMO. No matter how you look at it, Decentraland provides its users with ways to express themselves and their wealth and is a cool example of the kind of products that can be built on blockchains.
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