The concept behind Decentraland is to create a reality platform that can provide business opportunities and serve as a source of entertainment for users.
Decentraland is a decentralized virtual reality platform powered by Ethereum. Basically, Decentraland users are able to buy a piece of land with MANA which is its native token. Users are also able to build applications, buy/sell non-fungible tokens(NFTs) and auction their properties.
DECENTRALAND LAUNCH and TEAM
It was launched in 2017 and the co-founders were Ariel Meilich and Esteban Ordano; they have both stepped down but stayed as advisors to the team. However, Decentraland Foundation is in charge of the changes and development made in the protocol.
Decentraland exists as three separate entities but are all interconnected.
The Decentraland Virtual world – This is a virtual platform that allows users to design their landscape, create businesses, socialize and chat with other users on the platform, play world games, buy properties as well as go shopping. Passive incomes can be made when various attractions or lucrative sites are built and it is then monetized. It can also be sold out to make profit.
LAND and MANA- Decentraland has two tokens unlike other mainstream blockchain or DeFi applications. LAND is an ERC 721 non-fungible token (NFT) which certifies the ownership right over a land that has been purchased. Since all transactions are stored on the blockchain, the ownership of the land can be traced back to its original creator. Also as an NFT, LAND cannot be destroyed, divided and it can be verified.
MANA is an ERC 20 fungible token meaning that MANA can be interchangeable. Due to this feature, MANA can be said to be the powerhouse of Decentraland. Every product or service sold in the Decentraland spaces priced in MANA tokens whether it is an avatar, wearables or names.
Decentralized Autonomous Organization- In Decentraland, the word “Decentralized” is fully effective meaning that users are in full ownership of the platform. Users are also able to make decisions. MANA is used as the governance token and voting is done on upgrades of the project as well as future decisions also.
Decentraland has circulating supply 1.82B and a Max supply 2.6B and a volume of 946,345,088
A chart showing the price of MANA from AUG 2020 to Dec 2021(source: tradingview)
DECENTRALAND’S LAYER DISTRIBUTION (Architecture)
There are three layers namely:
- Consensus Layer
- Land Content Layer
- Real-time Layer
Consensus Layer – the land ownership is established at the consensus layer. Decentraland uses Ethereum smart contracts to track ownership for land parcels in the virtual world. These land parcels in the virtual world are sometimes regarded as non-fungible digital assets LAND. Each LAND has a unique x and y coordinates, a reference to the content distribution file and an owner. The LAND contract burns and destroys MANA in order to create new entries.
LAND Content Layer – A decentralized storage system is used by Decentraland to render content to the world. For content to be rendered, a reference is made to a file that contains the parcels content from the smart contract. No centralized server infrastructure is needed for Decentraland to work effectively due to the decentralized distribution system. They provide Decentrand with strong censorship-resistance and also eliminates the power of any central authority to alter the rules and prevents users from participating.
REAL-TIME LAYER – Users are able to communicate with each other in the Decentraland world by creating peer-to-peer connections through the servers hosted by landowners or third parties. Since there is not a centralized server, p2p connections are needed to provide social interactions between the users. Users are able to socialize by using avatars, voice chats, messaging and interactions within the virtual environment.
USE CASES OF DECENTRALAND
Applications – The scripting language in Decentraland allows development of applications, games and dynamic 3D scenes. This scripting language is designed to handle vast capabilities including creating objects, encoding the users interactions, payment, external calls and many more.
Advertising – In the virtual world, brands may advertise using billboards near, or in, high-traffic land parcels in order to promote their products, services and events.
Content curation – involves fetching information which are relevant to a particular topic or area of interest with the motive of adding more value by selection, organization and looking after the items collected. Users in Decentraland can gather around neighborhoods of similar interest; this will drive users to the landowners’ content.
Social platform – Users of Decentraland could gather in online forums, create chat groups and even play multiplayer games. Offline users can also find where to gather in the Decentraland.
As the network is still growing, other use cases of Decentraland could emerge in the future. Virtual tourism could also be a likely use case in the future.
POTENTIAL RISKS ASSOCIATED
Risk of Exploitation – As the Decentraland space develops the number of cyber attacks increases. If a malicious attacker or hacker finds a vulnerability in the protocol then financial loss and parcel loss are inevitable.
Regulation – The risk of regulation is also common in the DeFi space. If some regulatory bodies impose some strict regulations upon cryptocurrency in general, this could also affect the price of Decentraland tokens as well Ethereum also.
Upgrade in Ethereum network – Hard forks or Soft forks on Ethereum network could affect Decentraland since it is an Ethereum-base protocol and MANA is an ERC-20 token.
Decentraland is a unique platform in the virtual world. Developers can create and monetize applications on top of it. MANA tokens are used to buy land, goods and services in the virtual world. Also, the token will be used to incentivize content creation and user adoption.
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Written by Ayomide Abimbola © Crypto University 2022