Brave new blockchain world: Decentraland shows how the metaverse can work

Ever since internet company Facebook changed its name to “Meta,” the Metaverse has been on everyone’s lips. Quite a few observers consider the new digital space to be the next stage in the evolution of the World Wide Web. But while big players like Meta are still working on implementation, the crypto world is already a step ahead. In the Metaverse Decentraland project, users are already discovering the digital world of tomorrow. W: Thanks to the evolving business model, more and more companies are now looking for a presence in the virtual space.

Virtual worlds are becoming popular: Metaverse and games are currently the largest growth market in the blockchain sector along with decentralized finance (DeFi). Many observers of the Metaverse see the consistent further development of social networks and the current Web 2.0. The world’s largest crypto asset manager, Grayscale, expects annual revenue of $1 trillion from Metaverse projects in the near future. In the long term, the new digital space must compete with internet companies such as Alphabet, which together represent a market value of around $15 trillion. At least that’s a guess. Even if it takes a long time until then, it is already clear who is at the forefront of the battle for the Metaverse.

The virtual reality platform Decentraland (MANA), which has a market capitalization of approximately $2.5 billion, is one of the leaders in the Metaverse space. In the virtual world, users buy plots of land on which they can build with digital real estate or resell it. The big and well-known brands are quickly discovering the potential of the brave new world of blockchain. South Korean mobile phone company Samsung has opened its first virtual flagship store in Decentraland and fashion house Dolce & Gabana celebrated its first digital fashion week there.

A new identity in the Metaverse

Many consider the Metaverse to be the “next big thing,” and it’s no coincidence that Internet company Facebook has renamed itself Meta. But what does the term metaverse actually mean? Basically, Metaverse is a virtual world where users interact with their virtual environment. The focus is on consistent digital experiences. While our current Web 2.0 provides many isolated spaces – such as meetings, live broadcasts, virtual shopping or gaming – the metaverse wants to integrate these individual experiences into a coherent virtual world.

Metaverse wants to be a digital space in which people build a second virtual identity, at least that’s the idea. This new world should not be inferior to our “real” world; You should feel especially realistic by using VR headsets. While traditional internet companies like Meta are still in the process of implementing this virtual playground, the concept of the Metaverse has long since taken off in the crypto world. Decentraland shows how it can work.

Digital real estate: a rare commodity

Decentraland is an open virtual world based on the Ethereum blockchain. Users can visit digital community rooms, malls, art galleries, concerts and other virtual events with their characters and purchase digital products there. Example: Last year, Decentraland entered into a collaboration with Sotheby. In the digital galleries of the famous auction house, users can admire, buy and trade artworks. There is a reason for the growing presence of well-established brands and organizations making their way into the digital arena. Decentraland is not only a technology playground for the first attempts in the Metaverse, but also offers companies and users an exciting business model.

With a wide range of virtual experiences, Decentraland may convey a feeling of infinity. But in principle, the opposite is true: the world of Decentraland is finite. This makes it particularly exciting for investors. The virtual space is divided into 90,061 plots, each corresponding to an area of ​​256 square metres. Each of these areas can be traded as a non-fungible token (NFT). In principle, NFTs can represent any assets – but not be exchangeable for other assets of the same type. While the euro can be exchanged for another currency or bitcoin for another bitcoin, an NFT cannot easily be exchanged for another NFT. Thus each of these tokens is unique and irreplaceable – they are stored on the blockchain and demonstrate uniqueness, originality and authorship. Since all transactions are processed via Ethereum, users benefit from the fast and secure infrastructure of the popular network.

Mana: Decentraland’s cryptocurrency

Thus, every Decentraland parcel is unique and can be traded as an NFT – for example on well-known NFT markets such as Opensea. Since the digital space is limited, the demand for NFT land is correspondingly high. Companies want as soon as possible

Buying a virtual land to be located in the Metaverse in Decentraland and placing ads there, for example. A crypto investor recently purchased a virtual property for around $2.4 million USD. However, the transaction was not paid for in US currency, but in the form of Decentraland’s own digital currency called Mana.

Mana is the token used to pay for everything in Decentraland – from clothes for your digital character, to artwork, festival tickets, and land. With the increasing numbers of users and the growing popularity of services and products in the Metaverse, the demand for the token should also increase. While the Mana token was still around $0.07 at the beginning of 2021, the price in the meantime has soared to over $5. The Mana coin is currently valued at around $1.80, possibly also due to the overall market weakness.

The rapid development of the sector can also be seen elsewhere: while metaverse applications and games like Decentraland were still a niche in the crypto sector a year ago, they are now an integral part of the industry. Metaverse and blockchain gaming NFTs accounted for about 20 percent of the $23 billion NFT market last year, according to tracking platform DappRadar. The evolution shows: at least in the blockchain space, the metaverse arrived a long time ago.

About the author

Michael B Boshaus is the founder and managing director of justTRADE. He held the position of Managing Director of Onvista Bank and, as Head of Brokerage, was responsible for the entire securities business of comdirect Bank AG until 01/2019.

About justTRADE

justTRADE is an online broker from Frankfurt that offers traders to constantly trade securities and cryptocurrencies for orders commission of 0.00€ (plus the usual market spreads) and from a securities account. Over 500,000 securities – stocks, ETFs, ETCs, wikifolios, certificates, warrants and leverage products can now be traded on a mobile device via iOS and Android or via a desktop browser, both on the exchange across three exchanges (LS Exchange, Quotrix and Tradegate Exchange) and four other business partners (Citi, Société Générale, UBS and Vontobel). Completing the range are approximately 1,500 ETFs, ETCs and ETPs from ten providers (21Shares, Amundi, DWS, iShares, GlobalX, Lyxor, Vanguard, VanEck, UBS, WisdomTree). With the ability to trade 21 crypto values ​​available from the same warehouse as all securities, justTRADE offers its clients an unprecedented offer in Germany. In addition, there are a total of around 200 securities eligible for justTRADE’s savings plan.

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