Anyone who has ever played a role-playing game (RPG) knows firsthand how immersive a virtual world can be, but at the end of the day a video game is just that–a game. And whatever you manage to acquire in the game like loot, gold coins, buildings or land no longer has any value when you log out and return to your real life.
But Decentraland is a virtual world and so much more. Built on the Ethereum blockchain, Decentraland is a “metaverse” where you can own digital assets and engage in virtual activities with real-world value. For instance, you can buy and sell parcels of digital land using the Decentraland’s native cryptocurrency, MANA. And unlike the gold coins in your regular RPG game, MANA’s value extends beyond the borders of Decentraland and into our own.
Why should digital real estate have any value at all? The answer is in the utility of these virtual spaces. In Decentraland, you can do more than just play games, you can also use land and monetize it in many ways. You can set up a shop where you can sell both digital merchandise such as non fungible tokens or NFTs as well as other real-world items. You can hold virtual concerts and art exhibits and charge for tickets. You can gamble in virtual casinos, hold lectures, set up meetings–in fact, in the future we may find ourselves doing most of our day-to-day activities in such a metaverse–including our office jobs and classes.
Demand for real estate in Decentraland as well in other metaverses has been likened to discovering an entirely new continent during the age of exploration, with merchants and investors rushing in troves hoping to be the first to reap the potential wealth. In fact, demand has caused the most expensive parcels of digital land to reach as high as $3.5 million.
Decentraland, despite being a virtual space, is not an unlimited world. There are only 90,601 individual NFT plots (ERC-721) appropriately called LAND. Each LAND would be equivalent to 256 square meters if measured out in the real world.
What is MANA used for?
MANA is Decentraland’s official currency. In some ways, you can almost think of it as investing in a foreign currency as Decentraland has its own economy within its own world. MANA is used for purchasing everything from land, buildings, merchandise, and accessories such as wearable NFT items for your own avatar. You can even walk your avatar to a bar to chill with other players and buy each other’s avatar “drinks”.
Being built on the blockchain, Decentraland is a user-owned world with its own decentralized autonomous organization (DAO). This means that holders of MANA can participate in decisions that control how the world is run, including in-game policies, future updates, and treasury allocations.
MANA has a current circulating supply of 1.37 billion tokens from an initial total supply of 2.2 billion as of August 2022 while market capitalization stands at $1.9 billion. More than 600 million tokens have been removed from the total supply as MANA has a 2.5% percent burn rate from each sale of land that takes place.
MANA was designed to have an 8% annual inflation rate though this feature has currently been disabled by the DAO with no apparent plans to resume until necessary.
Of the total supply, 40% of MANA were allocated for public sale, with another 20% each for Decentraland’s community, contributors, and treasury.
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