Technology

What Is Decentraland?

By December 27, 2021December 29th, 2021No Comments
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Decentraland is an Ethereum-based open-world metaverse. Visitors to Decentraland’s website can explore the virtual environment, and investors can purchase parcels of land and monetize them as they see fit. Decentraland has already seen the construction of museums, video games, commercial office space, and residential houses.

When it comes to verifying the ownership of land and other game assets, the ERC-721 standard comes in handy. Non-fungible tokens must adhere to this specification. These in-game objects can be bought and sold by players for real money. With this feature, Decentraland aspires to establish a profitable virtual environment.

For entertainment and business purposes, Decentraland is a viable option. The goal of gaming is to have fun and take in the sights and sounds of the game’s virtual world. Businesses can make money by making land investments.

Decentraland: Background

Metaverse Holdings Ltd, the company that launched Decentraland and has its headquarters in Beijing, China, was established by Esteban Ordano in 2012. Ordano worked as a software developer at BitPay, where he is credited with helping to develop Bitcore, a key Bitcoin infrastructure library. Additionally, he has worked on Copay and led the development of the Streamium application.

Decentraland is a virtual world, or metaverse, built on the Ethereum blockchain that was first made available to the public in January 2020. It is owned by its users and administered by a decentralized autonomous organization (DAO).

If you’re looking for a way to buy and sell land in the virtual world of Decentraland, you’ll find three native tokens: LAND (ERC-721), ESTATE (ERC-721), and MANA (ERC-20). Virtual worlds often allow users to interact with their surroundings by using an avatar, and Decentraland’s metaverse does not differ in this regard.

The Crypto Valley Art Gallery, Bartertown, and Decentraland University all require the use of digital tokens in order to engage in activities like buying digital art. Decentraland’s tokens, unlike gold coins in Mario or World of Warcraft, are designed to be valuable and transferable in the real world.

Due to Ethereum’s ability to combine Decentraland’s economics with its technology and ideology, the digital world is both an experiment in a digital, decentralized utopia as well as a game built only for entertainment purposes.

How Does Decentraland Work?

In contrast to the vast majority of online games, users have direct control over the rules of the virtual world. DAO provides token holders with the ability to vote on in-game and organizational decisions directly. Everything in the DAO is affected by this system, from the permitted items to the investments in the DAO’s treasury.

There are non-fungible tokens for in-game treasures such as outfits and LAND (game’s virtual property). On the Decentraland Marketplace, users can buy and trade these tokens, which they keep in their digital wallets. If you want to buy a new facemask for example, you’ll need some MANA, the native cryptocurrency of Decentraland.

As an alternative to exchanging goods and property, players can create interactive content in the form of games, activities, and artwork. You can also make money off of your LAND. What happens in each player’s plot is entirely up to them.

Decentraland’s Governance

There are no centralized authorities in Decentraland, unlike other virtual worlds. Instead, the Decentraland DAO, built using Aragon-developed technology, is controlled by holders of MANA, LAND, and Estates. Any wrapped MANA (wMANA), LAND, or Estate tokens must be held to vote on protocol updates.

Each wMANA grants you one vote, whereas a LAND plot and an Estate grant you a total of 2,000 votes. “Wrapping” MANA in the Decentralized Autonomous Organization (DAO) is a term used in Decentraland. You can’t spend or transfer your MANA once you’ve wrapped it up. (Unwrapping MANA is necessary before using or transferring it.)

As long as you register your tokens to the DAO so they may be used as a means of voting, they can be used as normal tokens. However, while MANA can be acquired on popular crypto exchanges like Gemini and Coinbase, LAND can only be obtained through the Decentraland Marketplace. Creating estate tokens is only possible after many LAND parcels have been combined.

Security Advisory Board (SAB) of Decentraland monitors smart contract security, examines governance proposals, and responds to bug complaints alongside the Decentralized Autonomous Organization (DAO). Five members of the Decentraland community are elected to serve on the SAB. The board has complete authority on whether or not delay a decision.

MANA, LAND, And Estate Tokens

MANA is the native cryptocurrency of Decentraland, as discussed previously. Aside from its use as a medium of exchange, MANA also grants its users voting rights in the Decentraland DAO.

Non-fungible tokens called LAND represent individual parcels of land that members of the community possess. As part of Decentraland’s governance protocol, it works in a manner similar to MANA by providing voting authority.

MANA and other ERC-20 tokens are known as fungible tokens because they may be traded for other ERC-20 tokens. There are no distinguishing characteristics of a MANA token. For Decentraland, MANA is a great in-world currency because of these characteristics.

ERC-721 tokens such as LAND and Estate, on the other hand, have distinctive features. It is because of this that they are referred to as non-fungible tokens and cannot be used interchangeably like NFTs. So, instead of being used as a medium of exchange, they can only be used to create unique in-world things like avatars, wearables, and land parcels.

MANA, LAND, and Estate each have their own smart contracts named: LANDregistry, EstateRegistry, and the MANAtoken, defining their unique qualities. All of Decentraland’s virtual space is made up of LAND parcels, which you may buy for MANA in the Decentraland Marketplace.

At the Marketplace, you may also purchase clothing, shoes, and other items for your avatar. A record of every transaction in Decentraland is kept on Ethereum’s blockchain, making it a registry for all of the digital assets you gain there.

Cons of the MANA coin

Five years after its inception, Decentraland is still a relatively new initiative that runs in an early stage of decentralised finance (DeFi). Its coin is also affected by the blockchain network’s inherent scalability problems. Blockchain transaction times have been shown to increase during moments of intense network congestion.

On the blockchain network, processing delays and large transaction fees are not uncommon. According to BitInfoCharts, the average cost for Ethereum is currently $33.43. According to Cryptwerk, only 205 retailers globally accept MANA as payment, which may prove to be a disadvantage for the company.

Decentraland (MANA) vs. Competitors

Decentraland is up against intense competition, particularly from platforms such as Meta and The Sandbox. Decentraland has a slight advantage over Meta, which has not yet made its metaverse available to the general public. Meta, on the other hand, may soon make the Metaverse available to the whole public. Decentraland’s Metaverse may be surpassed in size by Meta’s because Meta is a much larger company with a far larger user base.
Another metaverse project involving blockchain is Sandbox. It is on the Ethereum chain, like Decentraland, and has a native currency. A bigger market cap may indicate a preference for MANA over SAND, but this isn’t conclusive. They are in direct competition with each other, therefore they have to keep adjusting to stay ahead of the curve.

The Future

Decentraland is still in the early stages of development. A number of stages have been completed, fittingly labelled “Stone Age” and “Bronze Age,” with more stages on the way according to the company’s road map. During each of these stages, new capabilities such as the ability to create apps, chat applications, and other similar tools are made available.

When Decentraland has its own economy, its users will be able to rent property, put up advertising billboards, and build communities within the game where they may meet and socialize. Like traditional gaming, blockchain technology may be enjoyable and engaging, but it can also help people obtain access to property ownership in ways that only blockchain can provide.

Will it be successful? Only time will tell!