What Is Decentraland?

What Is Decentraland?

Decentraland is a digital game that mimics reality in a three-dimensional format. This 3-D, user-owned, Ethereum-based virtual reality world platform, or open-world metaverse, is a combination of virtual reality, augmented reality, and the internet. It allows users to be part of a shared digital experience in which they play games, exchange collectibles, buy and sell digital real estate or wearables for avatars, socialize, and interact with each other.

Decentraland is software that seeks to give a global network of users incentives to operate a shared virtual world, according to cryptocurrency exchange Kraken.

Decentraland is part of a growing metaverse trend that has led to a proliferation in meta-related coins. Users can run a fully immersive virtual reality world they create, in which they oversee it through its decentralized autonomous organization (DAO). Decentraland differs from other virtual reality games in that it allows users to have some control over their environment; through DAO, users can vote directly on the game and the organization’s policies.

How Decentraland Works

Users create their unique environments, marketplaces, and applications using Decentraland’s three native tokens: LAND, Estate, and MANA. ERC-721 tokens, like LAND and Estate, make each token unique. Because of this factor, they’re not interchangeable and are referred to as non-fungible tokens (NFTs). This means that they don’t act as currencies but are used to create avatars, wearables, and unique parcels of land.

MANA is an ERC-20 fungible token that serves as Decentrand’s digital currency. It can help users create decentralized games, apps, and other services and lets them monetize their creations, in that it allows them to digitally build what they wish and explore the virtual space at will.

Users can use Decentraland’s map and join in on scheduled community events, which can include concerts, movie screenings, and casino nights. Other options are to buy or sell digital art and land. Clusters of land parcels have different characteristics. Decentraland’s squares include Vegas City; District X, a red-light district; Fashion Street; Dragon City; and those based on other themes.

How to Join Decentraland and Get Started

Users get onto Decentraland by opening an account. To do so, they must have a suitable Ethereum cryptocurrency wallet, which securely holds funds. A recommended one is MetaMask, which is accessible through a browser’s extensions catalog. One way to think about a digital account is as a bank account number and the wallet as a debit card.

Users also must create a passport, at which point they are assigned an avatar, which they can name.

History of Decentraland

In 2017, Argentine blockchain professionals Ari Meilich and Esteban Ordano launched Decentraland, for which they created the game’s smart contracts. It began as a proof of concept, which is an experiment or pilot project, in which it would assign ownership of a digital real estate plot to its users on the blockchain. They developed the platform as a two-dimensional (2-D) project that slowly transcended to a 3-D world.

At first, parcels of digital land sold for about $20, and MANA tokens sold for 2 cents. The game’s first map, Genesis City, included 90,601 land parcels. In 2017, Decentraland raised more than $26 million in its initial coin offering (ICO).

In April 2021, during a surge in popularity for NFTs, Decentraland parcels sold for $6,000 to more than $100,000. 

Because of the relatively small pool of MANA, the currency is volatile, and it has spiked after events like Facebook’s rebrand to Meta, a nod to the company’s bet on the success of the metaverse, for instance. The highest spike occurred shortly after the rebrand when Tokens.com purchased the “largest metaverse land acquisition in history,” peaking at $5.90 in late November 2021.

In March 2023, Decentraland reportedly had a market valuation of $1.1 billion.

The Bottom Line

Decentraland is a 3-D digital game that is a user-owned, Ethereum-based virtual world platform, or metaverse, allowing users to be part of a shared digital experience. With Decentraland, they can play games, exchange collectibles, buy and sell digital real estate or wearables, socialize, and interact.

It was launched in 2017 and, by March 2023, had an estimated market valuation of $1,1 billion.