Built on Ethereum, Decentraland is a virtual world, also known as a metaverse, that provides a vast number of experiences to its visitors, all powered by the functionality of non-fungible tokens (NFTs).
Built on Ethereum, Decentraland is a virtual world, also known as a metaverse, that provides a vast number of experiences to its visitors, all powered by the functionality of non-fungible tokens (NFTs).
One of the original blockchain-based metaverses, Decentraland is made up of more than 90,000 individual parcels of LAND—the NFT representing digital real estate in its metaverse. Each LAND measures 16 meters by 16 meters, making up a total of 9 square kilometers of space in Genesis City, Decentraland’s first city. Users who own multiple adjacent LANDs can connect them to form ESTATEs.
Decentraland is split up into several districts that are each reserved for dedicated purposes. If you want to play a game, you might jump into the gaming district and find a community of people who share your passion. In a shopping district, you can find new NFT gear that perfects your avatar’s outfit. You can even play slots at a virtual casino like the one created by Atari in the Vegas City casino district.
Together, the combination of a metaverse and an NFT-based economy has attracted a lot of attention to Decentraland. Samsung created a version of its flagship store in the metaverse, and the British auction house Sotheby’s opened a virtual gallery. A concert celebrating the metaverse was even hosted in October 2021, headlined by Deadmau5, Paris Hilton, and Alison Wonderland.
The MANA cryptocurrency is an ERC-20 token on the Ethereum blockchain used to buy and sell NFTs like LAND, make transactions when in the metaverse, and vote on proposals to upgrade its software.
DECENTRALAND ESSENTIALS
- Decentraland is an Ethereum-based metaverse project comprising more than 90,000 parcels of virtual LAND
- Its metaverse ecosystem is powered by three types of NFTs: LAND, avatar NAMES, and wearables that can be created by users and traded openly on its marketplace.
- Decentraland consists of a burgeoning culture, including virtual events like concerts and fashion shows, storefronts of well-known brands, and even virtual casinos
- The MANA cryptocurrency, is used for transactions in the marketplace, interacting with in-world experiences, and governance of the metaverse
How was Decentraland developed?
Decentraland was founded in 2015 by Ari Meilich and Esteban Ordano.
The original version of the project, called the Stone Age, was a 2D grid of colored pixels. Through 2016, it developed into its current 3D form, and in 2017 the developers held an initial coin offering that raised $25 million. Later that year, the team held its first LAND auction (also known as the first Terraform Event) which saw approximately $30 million in MANA spent on parcels of digital real estate.
The metaverse is governed by a community-driven decentralized autonomous organization (DAO) and the Decentraland Foundation, a non-profit organization whose stated goal is to foster the decentralization of the network.
How does Decentraland work?
Decentraland has three primary user-facing products. The first is the metaverse itself, which provides a vast world to explore, all made up of LAND customized by users. Players in the same realm (similar to a game server) can interact with each other, attend virtual events together, and play the same in-world games. The builder visual editor tool helps users build scenes on plots of land. Lastly, the marketplace is where players can buy and sell NFTs such as LAND, gear for their avatars to wear during gameplay, and decentralized NAMES—NFTs that are integrated with the Ethereum Name System (known as ENS)— allowing users to exchange tokens between memorable addresses rather than the traditional 40-character found in Ethereum-based address.
Architecture
The metaverse’s protocol is built on three different layers, each of which provides a necessary function to the system.
- Consensus layer – Maintains a decentralized ledger that proves ownership of metaverse land and what has been created on it.
- Content distribution layer – Controls what happens within each LAND and allows for the downloading of files with details about that land, including files with audio information, peer-to-peer interactions, and more.
- Real-time layer – Allows for players to communicate within the metaverse through audio chat and text messaging, helping render a cohesive metaverse experience for its users.
Decentraland DAO
The Decentraland DAO governs the operations of its metaverse and other platform offerings. Members can create and vote on proposals based on their holdings of MANA, LAND, and NAMES.
In doing so, they have a say in how certain aspects of how the metaverse work. This includes determining which servers can join the network, providing developer grants to support building new metaverse experiences, and deciding which points of interest to highlight on the metaverse’s map (which can either be places to explore for new users or where certain events are taking place).
Voting takes place using a decentralized system called Snapshot, which makes governance a gasless (free) experience for voters.
How is the MANA token used?
MANA is primarily used to buy and sell LAND, NAMES, and wearables on Decentraland’s NFT marketplace. To that end, MANA is essential to the economy and allows anyone who owns the tokens to participate in its ecosystem.
MANA has also been used in the past as part of the Terraform Events to mint the LAND NFTs; tokens were burned, or destroyed, when used for this purpose.
Of note, MANA can also be used on the Polygon sidechain in order to achieve low-fee transactions.
Token distribution
The initial supply of MANA was just over 2.8 billion tokens. 270 million MANA were initially burned during the platform’s two LAND auctions. Some of the tokens continued to be burned with marketplace transactions until a governance vote reallocated 2.5% of the tokens used in these transactions to the community treasury instead. The total supply is now closer to 2.2 billion tokens.
During Decentraland’s initial coin offering (ICO), 40% of its tokens were sold to raise funds for the project. Another 20% was allocated to community partners, 20% to the team and early contributors, and 20% to the Foundation. This includes 222 million MANA that were put under the discretionary control of the DAO, which have a 10-year vesting schedule to support developers building its metaverse.
This webpage has been approved as a financial promotion by Bitstamp UK Limited which is registered with the UK’s Financial Conduct Authority. Please read the Risk Warning Statement before investing. Cryptoassets and cryptoasset services are not regulated by the Financial Conduct Authority. You are unlikely to be protected if something goes wrong. Your investment may go down as well as up. You may be liable to pay Capital Gains Tax on any profits you earn.