Real estate has always been considered a solid investment choice. Looking back through history, a person’s wealth has always closely tracked the amount of land they own, with Kings and Queens rewarding their court favorites with rewarding acres rather than gold. By owning property or an acre or two, you are almost guaranteed to see a high return on your initial investment.
And while the real-world real estate market is rallying, so too is a virtual one known as Decentraland. Just as real land can build wealth, so too can owning virtual real estate in this metaverse, with many already cashing in on this growing asset market. Read on to find out why Decentraland is a good investment opportunity.
What is Decentraland?
Created in 2016 and officially launched in 2020, Decentraland is the most popular virtual world based on crypto technology. Connecting to Decentraland is easy, with the world accessible through a web browser such as Chrome or Firefox. Within the world, users are free to explore, interact with others, play games, and get involved in activities such as casinos and community events.
While this may sound familiar to games like The Sims or Second Life, the difference with Decentraland is that within this shared world, the land itself can be bought and sold between individuals.
Decentraland features a city known as “Genesis” comprised of 90,000 parcels of land. These 16 x 16 meter squares are simply known as LAND and can be developed on as the landowner sees fit. With thousands of in-game assets to buy and a thriving content-creator scene, there is, in effect, no limit to what you can do with land that you buy. Some people build casinos, some build art galleries and showcase their NFT collection, and some just create a place to relax and hang out.
And it’s from these plots that people are seeing huge profits, selling the land once it appreciates in price or leasing the land for a steady income.
One of the most exciting aspects of Decentraland is the real estate market that’s arisen. The system leverages the Ethereum blockchain with indisputable ownership of land represented by the LAND non-fungible tokens (NFTs).
To facilitate transactions, however, Decentraland uses its own cryptocurrency token, known as MANA, used to buy and sell LAND as well as 3D assets and animations to flesh out the world.
MANA’s initial coin offering happened in 2017 and took only 35 seconds to reach $24 million, making it one of the most successful to date. Whereas LAND keeps track of plot ownership, MANA is used to form the virtual economy, with smart contracts ensuring fraud is impossible.
LAND: ERC-721 Token
MANA: ERC-20 Token
The coin is used for everything from buying and selling land to putting it all on red at the roulette table. The MANA token is the backbones of the Decentraland ecosystem, with many investing in the coin as a growth opportunity.
And there’s good reason to believe so. On launch, the coin was worth $0.02, with brief rises to as high as $0.26 before settling to around $0.09. Testament to the game’s innovation, however, MANA spiked above $1, now comfortably sitting around $0.70-0.80.
Investing in LAND has proven to be profitable for almost everyone involved in the virtual economy. While land near roads and the city’s center bring in the biggest money, the average price per plot of LAND is around 6,900 MANA. At current prices, this means you can own a parcel of LAND for about $5300.
With a hard cap of 90,000 plots, LAND is a scarce asset that is expected to increase in value over time, just like in the real world.
While scarcity is the fundamental driver of increases in LAND price, the game’s continued success is also important to value appreciation.
While 2020 and 2021 have been difficult years, the Decentraland developers have been busy keeping those stuck in lockdown interacting virtually through in-game events. These range from Q&As to art shows, music concerts, and even football tournaments. What these events show is Decentraland’s ability to act as a virtual meeting place.
With the developers looking into a dedicated desktop client and the use of virtual reality, the future potential for Decentraland as an alternative to Zoom calls is exciting. The videogame giant Atari also recently announced it is going to be building a giant arcade within Decentraland.
With big names and big money moving the virtual world, and the NFT space tripling in size since 2020, the value of each LAND token is expected to increase dramatically.
Attitudes towards MANA are bullish, with many crypto-price predictions expecting the token’s value to move upwards.
While crypto markets are still relatively volatile, the built-in scarcity of LAND to the Decentraland economy is expected to keep the MANA token’s own value from dropping below resistance.
With a strong team of entrepreneurs and developers behind the MANA token, the value is expected to therefore increase. In the short term, the token is expected to go back above the $1 mark, seeing a high of around $1.70 to $.180 by the end of the year as interest in the Decentraland game continues to grow.
As with many things, being the first puts you in good stead, and with Decentraland, this is no exception. While there are expected to be competitors over the next ten years, the advantage of early adoption means Decentraland will see a continued steady growth pattern. While it is difficult to predict how coins will grow, there is a lot of confidence that MANA will be valued in excess of $20 by 2030, possibly as high as $30.
For anyone who invests now at MANA’s $0.75 price point, this is a potential 3900% ROI for those getting involved now.
While investment in cryptocurrencies and NFTs always carries an element of risk, the potential rewards are significantly higher than other types of investment. For many, this risk has already paid off, with some seeing enormous profits from buying, leasing, or using their virtual land. Whether it be in LAND or the MANA token, Decentraland is a good investment.