Decentraland (MANA) Metaverse Fundamental Research Report

It’s been almost four decades since human beings started being digital on a large scale. No doubt that technology has changed the course of our generations. And the kind of innovation that has happened in the digital space is commendable. 

But the beauty of us humans is that we are always looking for something bigger and better. Today’s digital world is scattered across applications and platforms, and there is no one place to experience it all.

Therefore, the next step up for this Digital Age is a shared virtual world known as Metaverse. In this world, except for eating, bathing, and dumping, you can do anything that you do in the physical world. You can visit your office, conduct client meetings, do business deals, meet friends and family, go to parties and concerts, make new connections, etc.

Further, the cherry on the top would be the underlying technology these platforms would be built on, i.e., blockchain. With the security and decentralization of blockchain, Metaverse platforms would surely bring the already global world closer. 

Today we have brought the most popular blockchain-based metaverse project called Decentraland. So, let’s dive and understand what it’s all about.

What is Decentraland?

Decentraland is a decentralized virtual reality platform built on the Ethereum blockchain network. The platform can be used to experience, create or monetize an application or content.

The platform is governed by a Decentralized Autonomous Organisation (DAO), which is further run by the token holders of Decentraland. The whole platform is divided into more than 90 thousand parcels. Each parcel is a Non-Fungible digital asset and is accompanied by an NFT (Non-Fungible Token) called LAND.

In addition to this, Decentraland also has another in-house token called MANA which can be used to buy LAND and other digital goods and services on the marketplace.

In short, the project has created a whole virtual world with its own in-world economy, and MANA serves as a currency for that economy.

Now, let’s explore the project further with a brief history.

Brief History of Decentraland

A brief history of the Decentraland Metaverse project is as follows:

1. Decentraland Stone Age (2015-16)

The project started in 2015 as a proof of concept for allocating ownership of digital real estate to users on a blockchain. Back then, it was an infinite 2D Grid.

2. Decentraland Bronze Age (2016-17)

In late 2016, the development of the Bronze Age started. It was a 3D (Three Dimensional) virtual world divided into land parcels.

3. Decentraland Iron Age (2017 Onwards)

Decentraland has made a very apt video for its Iron Age. Just have a look.

Finally, the Iron Age introduced a platform for developers where they could build on Decentraland and create content or application to monetize them. The stage also introduced LAND and MANA tokens.

In 2017, Decentraland had its ICO, where it offered MANA tokens @ $0.02 per token to the public. Finally, the platform introduced a communication layer that could bring a complete social experience for a user.

Finally, the platform was launched to the public in 2020. 

Now, let’s find out who are the founders of the project and their background.

Who are the Founders of Decentraland?

The founders of the Decentraland Metaverse project are as follows:

Esteban Ordano – Twitter
Co-Founder and Ex-CTO

Esteban is based in Argentina. He is a software engineer with an experience of over 11 years and has worked in companies like Infosys, Google, and Bitpay.

W.e.f. April 2020, Esteban stepped down from the active management of the project and accepted an advisory role. In addition to this, Esteban also served as a Smart Contract advisor for the Polygon Network (MATIC).

Ariel Meilich – Twitter
Co-Founder and Ex- Project Lead

Ariel is based in Uruguay and has a Bachelor’s Degree in Neuroscience. Before co-founding Decentraland, Ariel worked in the Neuroscience domain.

Later he founded an IT Consulting firm, Benchrise. Till April 2020, Ariel was the project lead of Decentraland. Post that, he accepted an advisory role with the project and moved on to his next project called Big Time Studios.

It is worth noting that both the co-founders have retired from the active project management. Both of them currently serve in an advisory role. Further, the current development of the project is handled by Decentraland Foundation through a Decentralized Autonomous Organisation (DAO) which we will discuss in a short while.

Now, let’s understand the possible use cases of the Decentraland Metaverse.

What are the Use Cases of Decentraland Metaverse?

The use cases of Decentraland are as follows:

1. Applications

Decentraland platform can be used as a base layer to build various applications such as gaming, gambling, museum, showrooms, dynamic 3D scenes, etc.

A few examples of applications already built on the platform are as follows:

a) Decentral Games is a casino on Decentraland where you can bet on your luck. More importantly, casino staff is real people on the back end. You can check out our complete review of Decentral Games.

Thus, players can play and socialize on Decentral Games in a similar way to an actual casino.

b) Decentraland Grand Theatre is a movie theatre with an on-demand movie catalog and special events.

Thus, you can watch your favorite movies with your friends and social circle.

c) There is a Tram line which is like the public transport in the platform, to help you explore the Metaverse.

This gives you a real-world like experience where you travel from one place to another. 

d) There is an Amazon Specials showroom where Amazon is promoting the One Plus 10 Pro 5G phone.

So, ultimately, the platform can be used to advertise products, services, and experiences.

e) SuperRare is an antique digital NFT platform that also has a showroom in Decentraland.

This is a testament to business opening their shops and showrooms in Decentraland.

2. Business Units

Businesses can build their offices for customers or employees. With a userbase and workforce scattered around the globe, companies can build a digital office on Decentraland to give a physical office-like experience to its stakeholders.

Further, Trade Centre or Business Plazas can be built to place all the virtual offices together. Below is an image of Manhattan District Towers in Decentraland.

A few examples of companies that have their business units in Decentraland are as follows:

• Atari
• Samsung
• Adidas
• PWC (PricewaterhouseCoopers)
• Heineken
• Absolut, etc.

3. Experience

If you guys have ever visited Amsterdam, then you can see the original Heineken brewery and experience how a Heineken is made. You can have the same experience in Heineken Brewery in Metaverse if you are too busy. How cool it is!

This is a pretty new domain but think about what all can be done! So, I grew up in 20th-century India. But what if I want to experience 16th-century India? Metaverse can make it possible.

4. Digital Collectibles

Almost everything on Decentraland can be owned permanently through Non-Fungible Tokens (NFTs). You can buy LAND, Domain names, and other types of collectibles.

Further, because of the various gaming and other user-centric applications on the platform, there is a complete marketplace for Digital Collectibles, which range from in-game items to digital wearables for your avatars.

5. Content Curation

Like any other city or district in the physical world, the users’ population of Decentraland would also be scattered. Some areas will have high traffic, and some will have low traffic. In high-traffic areas, creators can display and monetize their content.

It can be any type of content. Be it entertainment, sports, or advertisement content.

Further, because districts and plazas are distributed based on interests and categories of users, advertising would be very effective as it would cater to only a specific niche of customers. Some places would look like a virtual version of Times Square in New York City.

6. Social

Finally, Decentraland would become a virtual Social platform where you can meet people with similar interests and passions. You can explore the platform with them, play with them or chat with them.

Now, let’s explore the various components of the Decentraland Metaverse ecosystem.

What are the Components of Decentraland

The various components of Decentraland are as follows:

1. Digital Land

As already discussed, Decentraland virtual space is divided into 90,601 parcels. The size of each parcel is 16×16 meters. Each parcel is a Non-Fungible digital asset and is accompanied by a Non-Fungible token called LAND. LAND is an ERC-721 token, an Ethereum token standard for Non-Fungible Tokens. Currently, all LAND parcels have already been minted.

These LAND tokens can be purchased through the MANA token, which is the in-house token of the platform. However, in a secondary market such as OpenSea, you can also purchase LAND tokens by paying ETH tokens. Further, a LAND owner is the permanent owner of the parcel it represents.

When two or more adjacent LAND parcels are combined, then it is called an estate. An estate is generally used by bigger projects and companies. 

Further, some LAND parcels are organized into themed communities called Districts. These districts are shared spaces that can be used by people having common interests and uses.

Moreover, LAND is also a governance token for the Decentraland DAO (Decentralised Autonomous Organisation). This means that a LAND token holder can participate in the overall governance of the platform.

A LAND or estate can be bought on the Decentraland Marketplace.

2. Decentraland Names

Decentraland Names is a collection of Non-Fungible names that can be bought on the marketplace. Each name is accompanied by a Non-Fungible Token called NAMES. Like the LAND token, it is an ERC 721 token (Ethereum token standard for Non-Fungible Tokens).

NAMES token is also a governance token for the Decentraland DAO (Decentralised Autonomous Organisation). This means that a NAMES token holder can participate in the overall governance of the platform.

3. Marketplace

Decentraland has a complete marketplace to support its ecosystem.

You can buy various things such as:

• LAND parcels and estates,
• Domain names,
• In-Game items,
• Digital Wearables for your avatars and several other things.

Specifically, because of avatar wearables, Decentraland has become a hub for Digital Fashion. Recently, the platform organized a Metaverse Fashion Week where more than 70 fashion brands participated.

You can explore Decentraland Marketplace here.

4. MANA Token

MANA is the in-house token of the Decentraland platform. It is an ERC 20 token (Ethereum Token Standard for Fungible Tokens) and serves as the backbone of the whole ecosystem.

Now, let’s understand the use cases of the MANA token.

a) Use Cases of MANA Token

The use cases of MANA token are as follows:

• For buying LAND on the platform,
• For buying in-world goods and services on the platform, such as:
  • Buying a collectible
  • Buying an experience
  • Purchasing a service, etc.
• Governance of the platform

Note: Decentraland’s digital assets can be purchased through ETH tokens in secondary markets such as OpenSea. This sabotages the utility of the MANA token.

b) MANA Tokenomics

Particulars	Amount
Maximum Supply – Source	2.19 Billion
Total Supply	2.19 Billion
Circulating Supply	1.52 Billion (69% of the Total Supply)
Token Price (as of 17 May 2022)	$1.23
Market Cap	$1.84 Billion
Fully Diluted Value	$2.7 Billion
Trading Volume (24 Hrs)	$414.6 Million

MANA token has a Maximum Supply and Total Supply of 2.19 Billion with a Circulating Supply of 1.52 Billion, 69% of the Total Supply. The current token price is $1.23, making the current Market Cap around $1.84 Billion. Considering the platform’s potential, the value of MANA is relatively undervalued.

Further, w.e.f. February 19, 2020, Decentraland DAO has been granted 222 Million MANA tokens which will be vested every second for the next ten years.

c) MANA Token Distribution (18 August 2017)

Particulars	Token %age	Number of Tokens
Initial Coin Offering (ICO)	40%	1.124 Billion
Decentraland Foundation	20%	0.562 Billion
Development Team	20%	0.562 Billion
Community Reserve	20%	0.562 Billion

d) Where can you Buy MANA Token?

You can buy MANA tokens on the following crypto exchanges:

Centralized Exchanges	Remarks
Binance	Available for all parts of the world except the US and sanctioned countries. US Residents should use Binance.US
Coinbase	Available for all parts of the world including the US.
ByBit	Available globally. Not available in US and Singapore.
Kraken	–

Decentralized Exchanges	Remarks
Uniswap	Ethereum gas fee will be charged in addition to the trading fee.
Sushiswap	Ethereum gas fee will be charged in addition to the trading fee.

e) Best MANA Wallets

Wallets, where you can keep your MANA tokens safely are as follows:

Type of Wallet	Name of the Wallet
Hardware Wallet	Ledger
Hardware Wallet	Trezor
Mobile Wallet	Metamask
Mobile Wallet	Trust Wallet
Mobile Wallet	Rainbow

5. DAO (Decentralized Autonomous Organisation)

DAO is a reasonably new approach to organizational management and decision-making based on smart contracts.

Decentraland DAO is empowered to take decisions related to:

• Funding a community project
• Adding a node to the network
• Banning someone from the platform
• Governance proposals

The DAO also controls the LAND and Estate smart contracts. Further, w.e.f. February 19, 2020, DAO has been granted 222 Million MANA tokens which will be vested every second till next 10 years.

As on 14 April, 2022, the DAO balance is as follows:

In addition to this DAO has other sources of income as follows:

• 2.5% transaction fee from Decentraland Marketplace Sales, and
• A part of secondary sales on the OpenSea marketplace

Following token holders have the right to participate in the governance of Decentraland through DAO:

• MANA
• LAND
• NAMES

You can read more about Decentraland DAO here.

Now, let’s see the future roadmap of the project.

Roadmap

For 2022-2023, Decentraland is mainly focused on improving the user experience and adding more features to the platform. To give an overview of this, Decentraland has issued a Manifesto with the following agenda:

1. Launch of Desktop client for Windows, Linux, and MAC operating systems

2. Mobile application to allow access to users on the go.

3. Virtual Reality functionality to give an immersive user experience.

4. In-world experience improvements. Specific improvements in the
   • Voice chat system
   • Decentralization and scalability of chat systems

5. Personalizing Avatars
   • Users would be able to use their NFT (Bored Ape or Cryptopunk) as the head of their Avatar,
   • NFT emotes can be used to give new moves to your Avatar, and
   • Smart Wearables would also be available for the Avatars

6. Protocol and SDK (Software Development Kit) enhancements

You can refer to the Decentraland 2022 Manifesto here.

Further, for a roadmap beyond 2022-2023, you can refer to the Decentraland Trello Dashboard.

Now, let’s find out who are the competitors of Decentraland.

Competitors

The possible competitors of the Decentraland Metaverse project are as follows:

Name of the Platform	Token Name	Project Description
The Sandbox	SAND	Metaverse gaming platform built on the Ethereum Network
Somnium Space	CUBE	Virtual Reality Metaverse platform available on Ethereum and Solana Network
RFOX	RFOX	Metaverse platform available on Ethereum and BNB Chain
Star Atlas	ATLAS	Metaverse gaming platform built on the Solana Network
Dvision Network	DVI	Metaverse platform built on the Ethereum Network

Now, let’s consolidate the pros and cons of Decentraland.

What are the Benefits of the Decentraland project?

The benefits of the Decentraland Metaverse project are as follows:

1. Adoption

The adoption of the Decentraland Ecosystem is commendable. Many corporates have already launched their virtual business units on the platform, and many are in the process.

2. Polygon Network Integration

Decentraland is fully integrated with the Polygon Blockchain Network. This means that users can use Polygon Network to bypass the high gas fee of the Ethereum Network. Further, upto a specific limit, the Decentraland platform would bear the user’s gas fee. This means that you can buy, sell or transfer your assets free of cost.

3. Future Roadmap

The future roadmap seems very solid. The development team is actively working on the mobile app with the desktop client already launched. A mobile app can potentially change the game of the whole ecosystem with skyrocketed adoption.

4. Virtual Reality Functionality

VR functionality is one of the most important features of any upcoming metaverse platform. The platform is expected to launch a beta VR client in the second half of 2022.

5. LAND Rentals

The LAND owners would be able to rent out their properties which would create a full- fledged real estate economy on this metaverse platform.

However, Decentraland has a few limitations as well.

What are the Limitations of the Decentraland project?

The limitations of the Decentraland Metaverse project are as follows:

1. Team Support

While researching this project, we found Decentraland Team very unresponsive. This is a problem because players, developers, and users, in general, all need solid backend support to understand and adopt the platform. This is something that the team needs to consider seriously.

2. CRC Rating

Crypto Rating Council (CRC) is a rating agency that rates crypto assets on a scale of 1 to 5. Here 1 means that there is a low risk of application of U.S. Security Laws, and 5 means that the risk is high.

The council has given a rating of 3.75 to the MANA token, which can be considered high risk.

Now, let’s conclude our take on the project.

Conclusion

In our understanding, Decentraland is one of the top contenders in the Metaverse Game. Ultimately the whole industry could replace the existing internet ecosystem with a more immersive user experience. It is a whole new world economy under development.

Further, as you already know that Facebook has rebranded itself as Meta, which would further push the whole industry towards a larger audience and thus more extensive adoption. Grayscale estimates Metaverse could generate $1 Trillion in revenue based on a Forbes report. This means that if Decentraland can capture 5% of this global market, it would be much more valuable than today.

Further, because Decentraland in already a frontrunner in the whole ecosystem, it is pretty possible to capture that market share. The team has many significant developments in the pipeline. Considering that, it would not be wrong to say that the platform has a serious potential for growth and adoption.

With that growth and adoption, use cases of MANA should also grow, which would ultimately lead to a boost in its value. Therefore, the token is good for a long-term investment.

Resources

• Website
• Whitepaper
• Blog
• Documentation
• Transparency Dashboard
• Discord
• Telegram
• Twitter
• Youtube