Decentraland (MANA) is a virtual reality game on Ethereum that connects crypto investors through a unique Metaverse experience. The game allows players to buy land parcels, socialize with a vibrant community, and earn money by collecting valuable in-game NFTs.
Decentraland is the first project that comes to mind for many within crypto when you think of the word metaverse. The project succeeds in attracting a lot of attention thanks to its play-to-earn (P2E) model, rewarding MANA token, and integration of non-fungible tokens.
In today’s articles, I’m writing about the core of Decentraland that makes all of the above possible: Decentraland’s (MANA) tokenomics. I will teach you everything you need to know about how the tokenomics model works and which roles the MANA and LAND play. You will also get to learn the distribution and use cases of each token.
Decentraland is a blockchain game developed on Ethereum in which players can own virtual land, socialize with other players, and have fun. The game embraces decentralization by delegating control over the project to the community via a Decentralized Autonomous Organization (DAO).
Decentraland is sorta the place you go to when you want to talk with your fellow crypto friends. The game offers various venues for entertainment, and many cryptocurrency and NFT projects tend to organize parties or meetups. Even a few artists have held concerts inside Decentraland – the most famous example is Snoop Dog.
But the most important aspect behind Decentraland is the ability to own land. The game has tons of virtual land parcels referred to as LAND. Players exchange the MANA token to buy goods and services, as well as buy parcels.
The value of each land parcel corresponds to the value of the MANA token. But naturally, more unique land parcels can also have additional value on the market. Each parcel is represented by an ERC-721 non-fungible token that you can sell, transfer, and own.
What makes the game so important is the fact that Decentraland is one of the first Metaverse blockchain games to launch. Decentraland stood out from other projects early on by adopting NFT technology along with creating a DAO with on-chain governance.
Decentraland also got massively popular over the past few years thanks to its Play-to-Earn (P2E) model. You can technically earn free crypto simply by playing the game. You can do so by collecting in-game collectibles, purchasing land parcels and waiting for them to gain value over time, or by participating in various events organized by cryptocurrency projects.
Decentraland has been in development in 2015, having launched in 2017 along with its native utility token called MANA. MANA is an ERC-20 token on Ethereum that represents Decentraland’s de-facto currency, and as such, it plays an important role in the game’s economy. The sections below discuss the token’s distribution and use cases.
The team behind Decentraland held an Initial Coin Offering (ICO) in which it crowdsourced a total of $24 million in funds. The token sale took place in August 2017 and lasted only two days. The team managed to collect an additional $4 million above its planned target.
The team accepted ETH during its ICO and sold the token at a rate of 1000 MANA per 24 USD. The token is now worth 13.4x times compared to its ICO value. Only 40% of the initial token supply has been sold during the ICO.
The team allocated the initial token supply in the following fashion:
At the time of writing, MANA is ranked 60th place on CoinMarketCap’s crypto leaderboard. The token is priced at $0.32 per token and has a market cap of $602 million. MANA has a circulating supply of 1.85 billion out of a total supply of 2.193 billion.
Decentraland’s MANA token is both an utility token and a governance token. The more LAND players purchase, the more MANA the project burns. Moreover, the project enforces a 2.5% token burn on every transaction that takes place on the Decentraland marketplace.
Decentraland’s MANA token is both an utility token and a governance token. The more LAND players purchase, the more MANA the project burns. Moreover, the project enforces a 2.5% token burn on every transaction that takes place on the Decentraland marketplace.
The primary utility behind MANA is buying LAND. The value of land parcels in Decentraland is backed by the price of MANA. Moreover, certain locations tend to have more valuable land parcels because they have more in-game traffic.
For example, there are various in-game areas where you can shop for collectibles. There are even museums where you can view and buy NFTs using MANA. Some areas tend to be popular places for meeting up, holding concerts, or other community events. The more popular an area is, the higher the price of land parcels in that area – much like in real life.
MANA’s other use case is governance. You can use MANA tokens to submit new governance proposals and vote on existing governance proposals. As the owner of either MANA tokens or LAND parcels you prove your stake in the project — that’s why you automatically gain entry to the DAO and the ability to participate in governance.
You can make many changes to the protocol using the governance model. For example, you can whitelist new wearable collections, pick the members of the game’s security council, make changes to servers, and even impact some of the game’s rules.
Decentraland is one of the first metaverse blockchain Play-to-Earn games to launch. It has attracted a lot of attention by granting players the ability to own land and directly participate in the management of a decentralized protocol. And of course, having the opportunity to earn money simply by playing Decentraland is what attracted many players as well.
MANA is Decentraland’s native utility token. You can use MANA to buy LAND parcels, wearables for your avatar, and NFTs. Certain event organizers might even charge MANA tokens for tickets. Moreover, you can also use MANA to participate in the project’s governance model by submitting and voting on governance proposals.
All-in-all, Decentraland is a fun and casual game in which crypto investors can communicate and spend time in virtual worlds. But aside from having fun, you can also speculate on the game by investing in the MANA token – which has a direct impact on the price of in-game land parcels and wearables.
Want to learn more about Decentraland? I suggest reading the following articles:
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