Decentraland Metaverse Asset Investment Strategies
Decentraland is a 3D virtual world browser-based platform. Users may buy virtual plots of land in the platform as NFTs via the MANA cryptocurrency, which uses the Ethereum blockchain. Decentraland has been in development since 2017 and was opened to the public in February 2020. (20.02.20)
Decentraland consist of 4 main assets. Mana, Land, Wearables & Names. I will be explaining how these assets work, what the future potentials are and which asset type stands out the most.
Mana (ERC-20) is the cryptocurrency that facilitates purchases of LAND, as well as virtual goods and services used in Decentraland. Mana currency is deflationary. Total supply is 2,193,723,827. At the time of writing this Mana was ranked #32 on Coinmarketcap with a token value of $2.61 USD. I must admit Mana is the simplest way to participate in Decentraland. This is also the most liquid out of all. You can find mana token on more than 200+ cryptocurrency exchanges. If the exchanges aren’t your thing simple swap services from Uniswap, Kyberswap & Metamask are highly recommended
So how is this token really used? Well, approximately 80% of all Land transactions are conducted using the mana token. About half of all wearables transactions are done through Mana and 100% of all Avatar name are claimed using mana. As the platform grows with more daily/monthly active users, more play to earn games it’s not hard to see the value proposition of this native platform token. Windows desktop client was recently released and we are expected to see Mac OS & Linux clients to follow very shortly. Mobile app & VR are all expected to be released 2nd half of 2022 which can give tremendous value to mana token. Currently the marketplace has a nice swap feature from L1 Ethereum Mana to eMANA Polygon L2. This feature reduces the gas fees by a significant amount. There are many more exciting incoming updates which can be viewed on the roadmap
Decentraland Land tokens are ERC-721 Non Fungible Tokens (NFT’s) which are used as a pointer to correspond to each land parcel on the map. All land parcels are 16m x 16m blocks or 256 m2. When any other adjoining lands are connected to these lands they become an estate. Estate’s have larger height build capacity and more bigger your estate is more higher you can build. There is a simple formula log2 (n+1) x 20. Which can be found here
There are a total of 90,601 land parcels. 43,689 are private land parcels, 33,886 are district land parcels , 9,438 are reserved for roads & 3,588 are reserved for the plazas.
Current average land price at the moment is 5,000 Mana or $13,000 USD. Decentraland Marketplace is a good source for monitoring land & estate prices.
Unlimited opportunities exist in land ownership. Which is what drives the land value. Play to earn games, galleries, shops, business, advertising, promotions, brand awareness, education, training, socialising, platform integrations, airdrops, exclusive merchandise, NFT utilities are some of the opportunities that can be built on the land. Most recently the metaverse fashion week has attracted many global fashion brands like Estee lauder, Tommy Hilfiger, Paco Rabbane, Etro and many others to showcase their products, brands and their latest digital trends all within the metaverse. Land allows creators & designers to not only build experiences but at the same time earn revenue through this model.
We’ve seen many artist selling their digital art creations from their own galleries. Land & Estate’s are great investments if someone is looking to build on top of it. For someone who is looking to only trade land/estate look for the larger estates. Larger estates usually have a lower priced land floor compared to the floor land price. Anytime you can add or divide your land so this makes it easier for trading sometimes. You will need to do your own research. Always make offers if you believe you can get a better price. Try to negotiate by finding out who the owner if that parcel is. Contact them on twitter, discord etc..
Additionally you can assign names to any land or estate. This helps the outside world to be able to locate and find your land easily through any web browser. For example a Batman fan assigns the batcave NFT name to their land and everyone around the world who types batcave.dcl.eth on their web browser automatically lands on this parcel. Otherwise this has to be entered “https://play.decentraland.org/?island=Ib865&position=149%2C17&realm=unicorn” which not user friendly nor human readable.
More info will be explained on the Decentraland NFT names.
Decentraland wearables are ERC-721 NFT avatar skins that are used make your avatar look unique. A way to express yourself through digital fashion. Can you imagine if all the avatars looked the same? That would be boring right. Well, let me start off with some facts. Decentraland wearables are the first in-game player owned NFT skins in the world. They’re also the oldest and the first skin NFT’s on the Ethereum Blockchain dating back to 2019. These wearables exist on two blockchains. Ethereum L1 & Polygon L2. Ethereum L1 wearables are locked and no new additions will be created. Total number equates to 71,600 NFT’s.
Rarity categories include, common, uncommon, rare, epic, legendary, mythic, unique. Gender category are separated into male & female. See Decentraland L1 marketplace here. Just like all other NFT’s these skin NFT’s are highly collectible. Since they’re on a locked contract one may only except their value to grow as more NFT collectors and users move in. Decentraland platform is expected to have millions of players in the next few years. So suddenly 71,600 starts to look like a very small number.
You may find that some skins are more popular than others, therefore more expensive. Mythic & Legendary wearables are the most popular ones. Mythic skins are limited to 10 where Legendary skins are limited to 100 mint. In 2019 Decentraland had a skin presale on Opensea. Unfortunately not all the skins were sold out and the team decided to close the sale leaving some wearables in extremely low mint numbers. You may come across a mythic wearable with only two mints making it even rarer than the one that has 10 mints.
L2 Polygon wearables contract was implemented because of the ever rising Ethereum gas fees. This model was so brilliant in every way so the team decided to move all the new creations to L2. Right now all new designs are minted on L2. All creators/designers are able to mint their own skin lines. On top of all this they can not sell it to their followers or anyone who wants their wearables. This model generated a revenue model for the designers. They also receive a percentage from all the secondary sales. Almost 700,000 L2 wearables are created so far and this number is expected to grow to millions. L2 wearables are much more cheaper when compared to their L1 Ethereum counterparts. This is expected as L1’s are merely 1/10th of the L2's.
You can find all the L2’s on Opensea Marketplace
Please note: These skins may be a long term investment. They are also not as liquid as Mana or Land/Estates. However I personally love these skins and continue to collect and await for the day when one day these become as rare as Runescape partyhats.
Rare & Unique items especially the ones designed by famous artist or brands could have great future potential returns. Oldest, first, historically significant ones should also see their rise in value medium to long term.
Revolutionary decentralised identity system for Decentraland. Decentraland NFT names leverage the Ethereum Name Service and gives claimed names full control of the name subdomain, bringing the Decentraland ecosystem one step closer towards a fully decentralised experience. DCL (Decentraland) Names are ERC-721 NFT’s. The root domain is dcl.eth and all newly claimed/registered names become a subdomain dcl.eth For example if you claimed batman this would read as batman.dcl.eth however in the metaverse you only see it as batman. Web browsers will see it as batman.dcl.eth.
What are the advantages of the new Name system?
The current name system is based on a custom contract that has a number of limitations, including only one name per address, the inability to transfer your name in case you want to change your wallet, and the identity system based on Auth0 was a single point of failure for all authentications being made on Decentraland. This new system:
- Converts all names to an ERC721 token, so you can transfer it as you would any of your other NFTs. These tokens will be tradable by the launch.
- Integrates fully with the Ethereum Name System, so that you can now ask people to send you MANA and other tokens to, for example, ‘jane.dcl.eth’. ENS is integrated with many other dApps and wallets out there
- The code has been independently audited. It’s written so that the erc721 tokens can’t be stolen, and it’s not an upgradeable contract. The ownership of this contract will be sent to the DAO shortly.
These names in recent times are attracting NFT collectors from around the globe. Unlike most other NFT’s these name NFT’s are 1/1’s which means we will not be seeing multiple Batman’s roaming around the metaverse. Highest name sale in Decentraland’s history was KanyeWest coming in at 100,000 Mana. Todays price that would be equivalent to $261,000 USD.
If a players doesn’t have a claimed name, they are knows as guest users. Guest users have additional numbers, letters & characters after their name which can become annoying for anyone. Biggest differentiator between guest and claimed names are one can be easily found and located where the latter will be almost impossible to find, contact etc..
Names can be claimed here for 100 Mana plus gas fees.
Maximum of 15 letters or numbers are allowed. No spaces or special characters. If the name you’re trying to claim is already registered you will get a message saying this name is already taken. Believe me this is not a good feeling especially the name you really wanted was already taken.
Most active Decentraland Names market is currently on Opensea. Here you can offer, bid, list, buy or sell any name. Following the activity is important to know what’s selling, what type of names are getting claimed, which names are receiving offers etc.. Here’s the link to Opensea DCL Names Marketplace.
You may decide to assign a single to for your avatar as well as your land plot. This is all possible with a simple user friendly interface. Use as alias becomes your in-game avatar name. Use as link becomes your url browser shortcut.
I see great potential in these names because unlike ENS Domains they don’t expire and there are no yearly renewal fees. Basically you own your names for life. That is unless or until you decide to sell. Close the 300 new names are registered every week. This number could change as more people discover these unique 1/1 Name NFT’s.
Popular names include, actors, actresses, musicians, rappers, generic names, personal names, real life names, artist names, location names, cartoon names, comic names, Marvel & DCU names, anime & manga names, Pokemon names, Star Wars names, DragonBallz names, funny names, meme names, pepe names just to give you an example.
Please Note: This is not a financial advise.