Decentraland (MANA) is a virtual reality platform powered by the Ethereum blockchain enabling anyone to build and share metaverse experiences. Players can create worlds, explore attractions constructed by others, and earn money in a digital realm limited only by imagination.
Whereas the traditional video game market has long excluded players from owning the content they play or influencing game design, Decentraland seeks to do the opposite. Players can own in-game items and earn money for playing thanks to a combination of of blockchain technology and play-to-earn gaming mechanics.
However, Decentraland is more than just another play-to-earn game – its addressable audience goes far beyond that of Axie Infinity. Instead, Decentraland is building what might be the first-ever full-scale digital analog to the physical world.
Let’s dive into everything you should know about Decentraland, including how it works, key Decentraland features, and more about its native token MANA.
What is Decentraland?
Decentraland is a digital world shared, co-created, and hosted by a decentralized network of peers on the Ethereum blockchain. Players buy scarce digital land (called LAND) in the Decentraland metaverse, which they can develop for almost any purpose, including virtual shopping malls, museums, and event spaces.
The idea for Decentraland first came about back in 2015 when founders Ari Meilich and Esteban Ordano first experimented with proving ownership of NFTs, or Non-Fungible Tokens. They constructed a rudimentary 2D grid of pixels, then assigned ownership metadata to each pixel.
Their work was groundbreaking in itself – NFTs are now a multi-billion dollar industry – and was also amongst the earliest attempts to create a framework for unique digital asset ownership. It also served as a clear precursor to the far more complex system of digital land ownership Decentraland has evolved into over time.
Now that Sotheby’s has built a replica of its headquarters within Decentraland and plots of LAND have sold for $1 million+ to celebrities such as Snoop Dogg, it’s safe to say the project’s success bodes well for metaverse adoption in general.
But how does Decentraland work? Let’s investigate that question below.
How Decentraland works
When you first start exploring in Decentraland, it’s easy to feel overwhelmed by your surroundings. After all, the metaverse concept is still in its infancy, and unlike traditional video games, everything in the Decentraland world is player-owned and governed.
At Decentraland’s core is a digital land ownership system leveraging Ethereum to track LAND sales and a digital currency called MANA used as money within the Decentraland ecosystem. Players buy LAND to develop businesses much like they do in the physical world and spend MANA inside Decentraland like dollars, euros, and yen are spent elsewhere.
However, you don’t need to own LAND to enjoy the Decentraland metaverse experience. To use the analogy with the physical world again, think about how you don’t need to own land to enjoy walking through town and into shops.
Decentraland consists of three layers. The base layer tracks land ownership and the location of LAND parcels in the metaverse. The content layer determines how parcels look and what players can do in them. The social layer captures everything happening between Decentraland avatars.
Create with LAND
Owning and developing digital land is central to Decentraland. Each parcel of LAND has specific measurements that correspond to physical dimensions – those measurements are 16m x 16m, or 52ft x 52ft. The amount of MANA available also corresponds to LAND (you can only purchase LAND with MANA) to maintain their value.
Genesis City is the first cluster of virtual LAND and comprises 90,000 parcels. The reason for clustering the first parcels is simple – it's to keep everything within walking distance while Decentraland grows. Eventually, if enough players join, Decentraland will grow beyond Genesis City, but for now, it’s better to keep things small.
Players can fully customize LAND parcels which are compatible with various forms of content, making it possible to host everything from concerts, parties, art exhibits, and work meetings within Decentraland. These customized experiences are called scenes and players can resell them as features specific to LAND plots.
Additionally, all LAND parcels are fully on-chain as ERC-721 NFTs. That means you can store LAND securely in an Ethereum wallet.
Play your way
When you enter Decentraland, the first thing to do is customize your avatar’s appearance before socializing with other players. You can personalize your avatar however you want, thus giving you the power to adopt a truly metaversal version of yourself.
Once finished, you can try your luck at a virtual casino, call up a few friends to meet you at a virtual concert, or browse the list of upcoming Decentraland events. For instance, Ice Cube and Trevor Jones are hosting a Decentraland event and the smash hit NFT project The Sevens is unveiling its metaverse HQ.
To participate in events and play Decentraland games, you need an Ethereum wallet such as Metamask, and MANA tokens to pay entry fees.
Shop ‘til You Drop
With all of the in-game items available to players, it only makes sense to bundle them into an easy-to-browse marketplace. The Decentraland marketplace is the go-to spot for buying parcels of LAND, finding unique wearables for your avatar, and seeking out other items, such as names.
Remember, buying anything in the Decentraland ecosystem requires MANA, including marketplace items. That also means you’ll need to stock up on MANA on an exchange such as Coinbase, Binance, or Uniswap.
MANA is Decentraland’s native ERC-20 token that players use throughout its metaverse. Whether you’re purchasing an NFT item or accessing a scene or experience, MANA is the cryptocurrency required for payment.
MANA as In-Game Currency
If you wish to do anything in Decentraland, you need some MANA in your wallet. You can purchase MANA in-game via the built-in Kyber Network exchange or a centralized exchange such as FTX (read our FTX review). Decentraland is built around mechanisms that enable players to create and earn, so players conduct NFT item transactions peer-to-peer on Ethereum.
MANA for Purchasing LAND
As the essential aspect of the game, purchasing and developing LAND is done using the MANA token. There’s a nifty grid in the marketplace, showing the entire Decentraland world as it stands today, along with the availability of 90,601 parcels.
After LAND is purchased from the marketplace, MANA is burnt, thereby reducing the supply of the token in an effort to both increase MANA scarcity and maintain the value of LAND.
MANA as a Governance Token
LAND parcels are grouped into districts that can be viewed as communities of like-minded LAND owners who wish to associate with common interests. These districts might be composed of football fans, artists, musicians, or even Burning Man communities – the possibilities are endless.
Districts are governed using Decentraland’s Agora app, which is also how users manage the Decentraland metaverse together as a whole. To vote in any decision or propose an idea for governance, you must own MANA, representing your stake in the ecosystem.
MANA has experienced a meteoric rise in price in the past few months, possibly signaling an increase in demand for Decentraland beyond pure speculation. Companies are practically fighting each other over the metaverse, with notable brands such as Adidas and Nike jumping into the fray.
While Decentraland currently resembles a video game, it looks set to develop into more than that. Popular conceptions of the metaverse describe it as a digital reality as detailed and rich as the physical realm. Decentraland might one day grow into such a place, but for the moment, it’s essentially a very cool (and decentralized) MMORPG.
About The Author:
The Shrimpy Team
The Shrimpy Team is comprised of highly experienced content writers who analyze and research the latest market trends, delivering content suitable for both beginner and veteran crypto investors.