Coin Review - Decentraland

What is it?

Decentraland is a blockchain based virtual reality platform that is developed on the Ethereum network. It allows users to traverse through a virtual world, buying 10x10m plots of land that can be build upon and later monetised. Users can buy multiple pieces of adjacent land to create larger properties.

There is a finite amount of space available in the virtual world but once bought, users have unconstrained rights to develop whatever they wish on their land, be it a casino, a shopping centre, a music show, a craft workshop, business office space, a cinema, only your imagination is the limitation.

What is the MANA token?

The MANA token is the native currency of Decentraland. It is used to buy pieces of land at auction as well as interact and purchase goods or services in the virtual reality world. When MANA tokens are spent to purchase land they are burned (crypto for destroyed), lowering the number of coins in circulation,

MANA is an ERC-20 token, meaning that it is traded on the Ethereum Network and abides to the Ethereum standards. 

What problem is it solving?

None - rather Decentraland is seeking to take advantage of a growing market opportunity - the video game / virtual reality market. According to the Entertainment Software Association, consumers spend $36bn on video games in 2017 alone. Combine this with estimates that the VR headset industry will grow 600% over the next 5 years (CCS Insights) and you have a huge potential market. 

Similar to online games such as World of Warcraft or Fallout, Decentraland is an all immersive virtual universe. However, rather than operating in a two dimensional screen, users operate in a three dimensional world through their VR headsets. 

Being built on Ethereum, Decentraland is able to incorporate many benefits of blockchain, including an immutable, incorruptible ledger that guarantees ownership rights of land as well as currency (MANA). 

Why do we like it?

  • Virtual gaming and VR is a large and growing multi billion dollar market

  • Decentraland provides users with more control and autonomy over content than traditional virtual games

  • Strong partnerships with District0x, Aragon and Zepplin Solutions

  • Multiple use cases can be developed in the virtual reality world. Users can: develop applications, create marketplaces, brand advertisement, curate content, gather digital collectables, form clans with other users

  • Provides users with an opportunity to monetise goods and services through the interactive platform

Why do we not like it?

  • Requires an expensive VR headset to be submerged in the VR world (something that is forecast to become cheaper over the coming years)

  • The current state of blockchain technology makes it difficult for Decentraland to scale (download speeds, transaction rates

  • Decentraland will likely face strong competition from market incumbents down the track

  • Requires large server capacity to run the virtual world which will prove very costly for a non-profit platform

  • With no central authority there will be low monitoring and filtering of mature content (e.g. gaming or pornography)

Disclaimer: Magnet Capital does not accept any liability for any financial decisions made on the basis of the information provided. The above opinion does not constitute financial advice and should not be taken as such. Magnet Capital urges you to obtain professional advice before considering any investment decisions

Egor Sidelska