Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


What Value does Decentraland have?

Decentraland (MANA) is a platform trying to prove virtual reality could make money and hold attraction for real people.

To explain, Decentraland is a 3D virtual space users access through the blockchain. They also call Decentraland the first ever virtual world owned by users. In Decentraland, users can buy LAND a nonfungible digital asset maintained by an Ethereum Smart Contract with MANA (MANA) an ERC-20, or Ethereum cryptocurrency. They built Decentraland in the Ethereum (ETH) blockchain.

They claim Decentraland allows users to create environments and apps over which they have full control. The environments and apps can range from static 3D images to games. In Decentraland, users can trade, sell and buy assets.

The Decentraland DAO

A Decentralized Autonomous Organization (DAO) governs Decentraland. The DAO controls Decentraland through its ownership of vital smart contracts. For example, the LAND and Estates contracts.

The DAO is a community governed by members or token holders, each of whom owns a piece of Decentraland. The hope is that the DAO will make a democracy that its members can govern.

For example, the DAO controls LAND auctions and approves changes and improvements to protocols. The DAO also approves the marketplace fees, primary sale fees, and the allocation of MANA grants. The DAO approves new wearables that are sold on the Decentraland Marketplace. In addition, the DAO elects Decentraland’s governing body; the Security Council, or Security Advisory Board.

Can Decentraland Make Money?

I am skeptical about Decentraland because it is a virtual reality. I have heard that virtual reality (VR) is the next big thing for over 35 years. Yet VR never seems to become reality.

Personally, I think VR will always be a niche product for specialized uses such as the military or medicine. However, some smart people, including Mark Zuckerberg, believe virtual reality is the future.

Zuckerberg believes VR is about to go mainstream, the Motley Fool reports. The Fool notes Facebook (FB) or Meta was the market leader in VR headsets with a 35% market share in early 2021.

Additionally, Zuckerberg’s Meta has hired over 10,000 people to work on VR and is investing billions of dollars in it, Recode claims. Zuckerberg claims everybody soon live in a VR world he calls the Metaverse. Zuckerberg has so much faith in the Metaverse he has changed the name of his company to Meta.

I’m skeptical of that. In particular, I cannot see how Zuckerberg’s 3D animation is any better than today’s games. Moreover, I cannot see how VR meetings are an improvement on Zoom or Skype.

Is there Value in Decentraland?

Despite that, I suspect Decentraland could be onto something. To explain, I think VR or animated worlds could become popular hobbies. In particular, I think do-it-your-self gaming could become a popular pastime.

Obviously, Decentraland (MANA) could cash in on that, but will real people spend real money on it? I don’t know, but Mr. Market seems to think so. Notably, Decentraland was CoinMarketCap’s 23rd most valuable cryptocurrency on 29 November 2021.

For example, CoinMarketCap gave MANA a Coin Price of $4.96, a Market Cap of $9.081 billion, a Fully Diluted Market Cap of $10.885 billion, and a $2.816 billion 24-Hour Market Volume on 29 November 2021. They based those numbers on a Circulating Supply of 1.82 billion MANA and a Total Supply of 2.194 billion MANA.

In contrast, CoinBase gave Decentraland a Coin Price of $4.98 Coin Price, a Market Cap of $9.1 billion, and a 24-Hour Market Volume of $2.8 billion. They based those numbers on a Circulating Supply of 1.8 billion MANA.

There is Serious Interest in Decentraland

I think these numbers show there is serious interest in Decentraland. Notably, CoinMarketCap named Decentraland as the 15th most trending cryptocurrency on 27 November 2021. Hence, many people like Decentraland and will buy its ERC-20 (Ethereum Request for Comment) cryptocurrency.

If you want to invest in a VR-based cryptocurrency, Decentraland could be a good choice. They have built a 3D virtual space and I think that virtual space is making money.

I consider Decentraland a risky experiment. However, I think it is an experiment that is worth watching.