Is It Worth Investing in Decentraland?
The success of digital platforms such as Roblox has inspired the emergence of similar concepts in the blockchain industry.
Decentraland is among the latest entrants in the virtual-reality worlds that allows you to own properties virtually.
In simple terms, Decentraland is an exciting blockchain concept that creates a virtual reality world allowing users to monetize content within a virtually shared space. The platform was launched in 2017, and back then, its digital world developers sold their lands for roughly $20 per piece.
And although Decentraland kept growing over the years, the idea of VR worlds was still fairly alien, and so the so the community remained relatively small. However, when the NFT boom hit, the platform picked up momentum quickly and now parcels of land range between $6,000 to $100,000.
In this guide, we will be covering Decentraland in more details in order to understand how it works and learn how to invest in it.
- What Is Decentraland?
- How Does Decentraland Work?
- Valuation of Land in Decentraland
- Decentraland Price History
- Decentraland Price Predictions In 2021
- How to Invest in Decentraland
- How to Store Your MANA Tokens
- What Can You Do With Digital Land?
- Making Money on Decentraland
- Is Decentraland a Good Investment?
- Conclusion: So, Should I Buy Decentraland?
What Is Decentraland?
Decentraland is a virtual reality platform run by the Ethereum blockchain. It enables a user to create, experience, and monetize applications and content. The platform is web-based, straightforward, and easy to access. You do not need any funds to use the platform and earn from it.
Decentraland was founded in 2015 by Ali Meilich and Esteban Ordano. It operates from San Mateo, California. Initially, the platform was divided into grids by the Proof of Work algorithm.
Decentraland founders believe that centralized platforms hold too much control over the data and content. The platform was designed to solve the problem of centralized platforms.
The idea behind Decentraland was to allow content creators to have full control over their content. This allows content creators to transact directly without involving any third parties. The protocol enables a low-cost payment method that changes the way internet commerce operates today.
Investors in Decentraland use the platform to buy virtual property. You can then develop your property as an online virtual business. Investors can build various buildings and attractions on virtual land plots and profit from them by selling or monetizing them to other investors.
One unique feature about the platform is the ability to build a digital business within the Decentraland. You can then monetize the digital business with MANA cryptocurrency and cash it out with a government-issued currency.
Renting an offline house is expensive, and Decentraland offers a more affordable opportunity to own land. Investors in this platform can:
- Buy property
- Design landscapes
- Create businesses
- Play world games
- Socialize and chat.
How Does Decentraland Work?
Decentraland is a 3D world technology that uses two tokens, LAND and MANA. Investors use the token to buy land, goods, and services. If you purchase land, you get full ownership and complete control over the environment within your land.
MANA is an ERC-20 token and is thought of as fungible. It is highly interchangeable, and the token is just like any other token. There is no individual feature that differentiates it from any other token. MANA is the ideal token for use in the Decentraland marketplace.
On the other hand, LAND is an ERC-721 token. The token is non-fungible because it has individual features that make each token unique. The token is thus not interchangeable hence cannot be used as a currency. This type of token is instrumental in creating unique parcels of land in Decentraland.
The software tracks digital land ownership and requires investors to hold MANA tokens within an ETH wallet. Developers can innovate within the Decentraland by designing animations and interactions within their virtual real estates.
The community permanently owns LAND. Investors buy plots of virtual LAND with a size of 33 by 33 feet. There are 90,000 parcels of land on Decentraland, and all were bought during the initial auction. The number of parcels of land can be increased by the Decentralized Autonomous Organization (DAO).
Once investors purchase LAND, they have complete control over the contents published on their LAND portion of the digital world.
LAND on this crypto is a transferrable digital asset stored in an Ethereum smart contract. Investors use MANA tokens to purchase the land. You can also purchase other in-world services and goods on the platform using MANA tokens.
Decentraland is a multi-layered architecture consisting of multiple components. This crypto consists of a consensus, content, and real-time layer.
The consensus layer stores details of ownership over the land. Every land on Decentraland has unique coordinates, just like land in the real world. The consensus layer also has the description of the type of content that the land hosts.
The content layer, also known as the Decentraland terminology, has full control over what is happening on the land. The layer will host the content that is to be shared in exchange for payments.
The final layer is a real-time layer that allows users to communicate. Users within the virtual world can communicate through voice messages and chats.
Valuation of Land in Decentraland
Land in Decentraland is valued in the same way as it is in the real world. The location of your land will play an important role in determining the price. The most important factor is the development of the land. A combination of both the location and development of the land will have an impact on the price.
If you have developed something interesting on the land, such as an engaging game or art gallery, then people will visit your land. Land near districts such as Dragon City or Crypto Valley fetch higher prices.
You can purchase land adjacent to these districts so that you can earn more MANA. If you purchase two or more adjacent lands, then you get an estate. Owning an estate in the platform allows you to develop larger projects and thus fetch higher prices.
Decentraland Price History
The Initial Coin Offering (ICO) raised over 24 million US dollars in under a minute in 2017. The offering is among the most ICO's. Over 10,000 investors pushed to participate in the initial sale. However, because of large volumes, only about 3,000 investors had successful transactions, leading to a lot of disappointments.
A thousand MANA were sold at the ICO launch, and each 1000 MANA was used to buy 1 LAND. This has, however, changed over the years.
MANA traded at the price of 0.02 USD in various cryptocurrency exchanges when it was unveiled. It rose rapidly, hitting its peak of 0.26 USD by January 2018.
In mid-2020, this token decreased sharply, trading below 0.04 USD. It, however, rose a few months later, closing the year trading at between 0.08 and 0.09 USD.
Decentraland Price Predictions In 2021
MANA token took off along with the entire cryptocurrency market at the beginning of 2021 in what will remain to be one of the wildest market-wide bull runs. The virtual world surpassed the $1 mark within a few weeks of the year. This spike led to a lot of speculation among cryptocurrency investors.
The question as to whether the token will rise in the future depends on what the platform will offer and the rate of adoption by investors.
Some analysts are betting on the fundamental aspect of the protocol to propel its price this year. The team at Decentraland is led by Ariel Meilich, who is the project lead and Esteban Ordano, the tech lead. Both Ariel and Esteban are successful and have had great achievements in the cryptocurrency world.
Considering their achievements in the industry, a lot of people believe that the Decentraland platform will see faster mainstream adoption than most of the other upcoming cryptocurrencies. The platform already has a great roadmap and business model, which could make it a market leader in the virtual world and subsequently boost its valuation in the long run.
The game industry is developing every day, and platforms like Decentraland will no doubt be at the epicentre of virtual reality worlds. Unlike most digital games, Decentraland has many benefits, such as allowing investors to create a profitable business within its platform. This has made the community grow and will become even more valuable for investors as it broadens its use cases.
Having said that, several price analysts have come out to give their predictions of what they think Decentraland will be worth this year. Digital Coin Price is among those who are hopeful that the token will close the year at more than $1. According to the price analyst, Decentraland might be worth about $1.08 by the end of the year.
Although Wallet Investor also doesn’t think Decentraland will reach $2 this year, it is a tad more hopeful than Digital Coin Price and predicts that the coin will be worth $1.188 by December 2021. Wallet Investor also predicts that Decentraland might touch $2 for the first time in late 2022 and continue for the most part of 2023.
On the other hand, Trading Beasts doesn’t think MANA will be reaching $1 this year. The site predicts that the virtual world will be worth around $0.9374148 by the end of 2021, with a possible yearly high of $1.1717685.
Don't Miss: Decentraland (MANA) Price Predictions
How to Invest in Decentraland
Investing in Decentraland is straightforward. MANA tokens are available in many cryptocurrency exchanges, so you can easily get them. You can purchase MANA with either EHT or BTC on most exchanges. Other exchanges will also allow you to directly buy it using fiat currencies.
If you are looking for some good suggestions, we find the following platforms to be the most reliable.
You can trade MANA on most of these exchanges, but if you are looking for the best experience, you can try eToro. It is not only user friendly but the best option if you are looking to start trading MANA.
Otherwise, feel free to use a platform that is the best fit for your specific needs. Whichever exchange you choose, the process of buying and investing it MANA is fairly the same.
Just follow the steps below.
Step 1: Register for an account
Register with an exchange that supports MANA token trading. Provide your email address and a password. You will also be required to provide personal details as per Know Your Customer (KYC) requirements.
Of course, the requirements will differ based on the exchange you are using.
Step 2: Deposit funds into your account
Before you can buy MANA, you will first need to deposit funds into your account. The cryptocurrency should be listed in a currency pair with MANA. BTC and ETH are good examples. A more straightforward method is to deposit fiat currency and use it to buy BTC. Then Trade the BTC for MANA tokens.
Step 3: Buy MANA tokens
After depositing your tokens, you are now ready to buy your MANA tokens. This is pretty simple. Once you are logged into your exchange account, click on the "Exchange" or "Markets" link. Then search for your preferred currency pairings such as ETH/MANA or BTC/MANA. You will find a "BUY" button below, where you will input the amount you spend or the amount of MANA you wish to buy. Input the details and buy your MANA tokens.
How to Store Your MANA Tokens
If you want to HODL MANA for the long term, you will need to store it in an external wallet.
A hardware wallet is the best option for investors who plan on holding MANA tokens for a long period. Hardware wallets store your crypto in offline cold storage. This technique makes it impossible for online threats to attack and make away with your investment.
Both the Ledger Nano S and Ledger Nano X support Decentraland MANA tokens.
What Can You Do With Digital Land?
In Decentraland, the community is important. What makes digital land valuable is the location and how you choose to develop the land. To attract users to your virtual land, then you must give the users an incentive.
Here are the most popular developments on virtual land:
- Casino. You can have a casino where a player can win MANA tokens. This will attract users to your virtual land.
- Game sites. Gaming is becoming increasingly popular, and having a gaming site will certainly attract users.
- Art galleries. You can showcase and sell digital art, including crypto kitties.
- Music Venues. Musicians and DJs can play music and hold concerts.
- Brand-sponsored content.
Making Money on Decentraland
There are several ways of making money on Decentraland. Let’s quickly look at five of the most effective ways.
Buying and Selling Parcels
Flipping parcels will make you big money. There will always be someone who wants to sell and cash out, while another will want to get in. The trick is finding them. Once you find them, all you need to do is negotiate and win on the buy.
Buying and selling will be more exciting when the parcels become rare. When this happens, different factors apart from location will begin to affect the price.
Decentraland is new and still building its foundation. However, with constant partnerships and a lot of people getting in, the parcels will soon be in demand.
Renting Out Parcels
Not many parcel owners can develop or have the capacity to build anything on the parcel. However, not having the capacity to develop does not mean that you should not own a parcel. You can always hire someone to develop it for you or, better still, rent your parcel out.
Renting out is one of the reasons why owning estates will be powerful. When more parcels are connected, then you can develop higher.
Most developers prefer their own parcels to build. However, when renting begins to generate good income, the prices of these parcels will be off the roof.
Developing Then Charging For Entry
You can build experiences and places worth visiting on your parcels. This is possible when coders, developers, and smart entrepreneurs come together.
Parcel owners will enjoy building experiences and things that the community will visit and enjoy. Smart entrepreneurs will build epic innovations and charge people for entry.
People will always need various services. You can provide such services on Decentraland and make money. You can build games for people or develop templates for certain houses and buildings.
Parcel owners can buy such templates and upload them on their land. Interior and exterior designers can also offer their services for sale on this platform. Advertisers, sign designers, parcel valuators, rental agents, and event organizers can also sell their services.
Showcasing and Selling Different Products
Do you know you can have a virtual display room and showcase your design skills? Whether it's houses, apartments, or new games, you can showcase and sell them on this platform.
You can showcase your houses, clothing line, toys, phones, or any other product in the virtual world. The best thing is that the virtual world is international. Clients in other countries can have a close look at your products.
It is also possible to have districts dedicated to these types of experiences. You can have a virtual shopping district or fashion street.
Is Decentraland a Good Investment?
The future of Decentraland anchors on people showing up and using the platform. A lot of people are attracted to this crypto either as a virtual curiosity or in anticipation that it will become an actual virtual currency like Bitcoin.
The concept of MANA cryptocurrency is exciting because it seeks to improve the virtual world by allowing users to develop and create many things. Decentraland gives you a cool platform where you can purchase virtual land, create your own business, and enjoy the benefits of decentralization.
Virtual reality gaming is growing bigger and bigger every day. Decentraland is still in the development stage and will grow bigger with time.
The platform is entering into various partnerships that will see it evolve quickly. The partnerships will increase the adoption of the MANA concept hence increase the value of the MANA token.
However, we cannot ignore the extremely high gas fees. It is fun to customize your avatar using wearable devices, but it is not fun to pay very high gas fees. MANA tokens are expensive, making virtual products and services very costly.
However, with more adoption of the MANA token, the prices of wearables will come down. The tokens will therefore become more affordable in the future.
Why Should I Invest In Decentraland?
One of the biggest benefits of Decentraland is that it gives users full ownership access. This feature differentiates it from other virtual reality platforms. Users own the decision-making places of the crypto through the DAO.
Parcel owners of this digital landscape keep all the proceeds generated by those who use their land. This is different because other platforms take a cut. The system is decentralized; hence there is no central authority to control the system.
MANA is a good investment for the future. MANA tokens' price rose above 1 USD earlier this year. However, some analysts attribute this to the increasing value of other cryptocurrencies such as Bitcoin.
A keen study into the price changes will show that MANA's price rise results from an increase in the price of Bitcoin. This means that as long as Bitcoin keeps rising, MANA will rise as well.
Additionally, this platform focuses on improving its features which will increase its growth. Social media influencers might also lead to MANA token's growth. Their impact cannot be overlooked.
Decentraland is a great platform to begin a virtual space. MANA cryptocurrency could become profitable in the long run.
Conclusion: So, Should I Buy Decentraland?
Decentraland has succeeded in monetizing the virtual 3D world in a time and age when the world is moving towards digitization. None of the other virtual world platforms has managed to stand out like Decentraland.
The price of MANA tokens is a testimony of the platform's success, having risen from the lows of 0.008 USD in 2017 to a high of 1.63 USD in 2021. Further growth of MANA tokens is guaranteed by the increasing demand and price of virtual land.
If you are looking to invest, this might be the right time to buy as the popularity of VR gaming is growing. In a few years, MANA will be much more valuable, and you could profit heavily if you buy now.
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