What Is Decentraland (MANA)?

Blockchain space has been a subject of criticism not only for the technology itself but for the lack of real use cases. However, there is at least one example of using blockchain outside the crypto community. And this example is gaming or virtual reality world. Storing the gaming assets on the blockchain is extremely convenient, as players still own the same assets due to the immutable public record on the blockchain. Technically, everything they store on their own crypto wallet belongs to them. And this is where Decentraland (MANA) steps in.

Decentraland is a decentralized virtual reality platform powered by Ethereum (ETH). Basically, Decentraland users can buy pieces of land with MANA, its native token, as well as build applications, buy and sell non-fungible tokens (NFTs), and auction their properties.

The idea behind Decentraland is to implement blockchain in the gaming world. Its developers are convinced that any asset, even a virtual one, should belong to the rightful owner without any centralized entity that can impose its will on the owner of the asset.

Decentraland Launch and Team

Decentraland was launched in 2017. Its co-founders were Ariel Meilich and Esteban Ordano, but both developers have already stepped down from their positions and transitioned control to the community. They still stay with Decentraland as advisors, but it is the Decentraland Foundation that is in charge of all the changes and developments made in the protocol.

Meilich is a tech entrepreneur with experience in building startups. He founded an online translation agency and a CRM platform. He also worked as an analyst at Charles River Ventures, a Silicon Valley Venture Fund. At Decentraland, Meilich was the leader of the project between 2017 and 2020.

Meanwhile, Ordano worked as the former tech lead. He has a heavy experience in the crypto-space. As a former software engineer at BitPay, he co-created one of the leading Bitcoin (BTC) infrastructure libraries, known as Bitcore (BTX).

Decentraland’s LAND, MANA, and Estate Tokens

Decentraland has three native tokens: LAND, MANA, and Estate.

LAND and Estate are ERC-721 tokens. They represent parcels that you can buy using MANA. The main difference between them and MANA is that they are ERC-721 tokens, which makes them non-fungible. This is essential to understand how it works. NFTs can not act as cryptocurrencies, you can them to build unique items like Avatars, wearables, or unique pieces of land.

Meanwhile, MANA is an ERC-20 token compatible with other tokens in the Ethereum Network. It can be used to check in real-time the price of a new parcel of LAND. You can buy goods, services, and parcels of LAND in Decentraland’s Marketplace.

Decentraland’s Layer Distribution

Decentraland has three layers: consensus layer, land layer, and real-time layer.

The consensus layer is powered by smart contracts. It tracks LAND ownership and its content. LAND contract burns MANA when creating a new LAND division in the registry.

The land layer works as decentralized storage. Here, users can download assets using a decentralized system that distributes the content all over its metaverse. The land layer is an essential component of the system as it provides all the necessary information that the platform needs to render a parcel of LAND, such as textures, 3D meshes, audio files, and so on.

The real-time layer enables the peer-to-peer connection, allowing users to communicate with each other in the metaverse. With this layer, developers can build 3D scenarios as they wish, without needing to know how to code.

The way you experience Decentraland’s metaverse is through an avatar. In other words, Decentraland is pretty much a blockchain-based virtual reality world. While only blockchain and crypto-enthusiasts compose the majority of the platform, the protocol has users without any knowledge on the matter of exploring its virtual reality world.

Decentraland’s DAO

The protocol is governed by Decentraland Decentralised Autonomous Organization (DAO) that has a purse of MANA and subsidizes several initiatives on the platform. The DAO owns all the essential smart contracts and assets of Decentraland. They include:

• LAND Contract;
• Estates Contract;
• Wearables;
• Content Serves;
• Marketplace.

With DAO, users are in control of the policies created to determine how the metaverse behaves. They can decide on what wearables to allow, moderate content, parcel LAND policy and auction, and more. The community also has control of interaction development. Besides, they can introduce concepts they consider relevant. To vote, all users must go to Decentraland DAO’s governance interface powered by Aragon, a software that helps internet communities to organize themselves with their resources.

Other features are as follows:

• Voting on the updates of policy, future auctions, and whitelisting of NTF contracts;
• Upgrading LAND and Estates to add more features;
• Deciding on specifics and dates of future LAND auctions;
• Determining marketplace fees, which are always in MANA that burn;
• Determining primary sale fees, which are always in MANA that burn;
• Addition and replacement of community-run content servers;
• Allocation of MANA grants;
• Addition of new wearables to the Decentraland World, Builder, and Marketplace;
• Replacing members of the Security Council.

To provide contract security, Decentraland’s DAO has the Security Advisory Board (SAB). The Decentraland community chooses 5 members of the Board by voting, later the team appoints them. The Board ensures effective oversight on technology risk and guarantees contract security for the protocol. Its main task is providing a swift response to bug reports. In addition, if a LAND or Estate contract is somehow corrupted, the Board upgrades their smart contract implementations.

Potential Risks Associated with Decentraland

As any decentralized protocol, Decentraland presents several risks that you should consider before joining the project. Some of them include:

• Risk of exploitation. Decentraland is not exempt from data exploitation. As the DeFi space develops, the number of cyberattacks increases as well. If a malicious actor finds a vulnerability in the protocol, financial and parcels loss is inevitable.
• Regulation. This risk is also a common one in the DeFi space. Regulatory bodies can impose strict regulations upon cryptocurrencies. These laws could considerably impact the price of Decentralands’ tokens, as well as Ethereum. These actions could limit users’ ability to access the Ethereum blockchain.
• Risks of hard-fork and upgrades in Ethereum. Decentraland is an Ethereum-based protocol, and MANA is an ERC-20 token. Therefore, any changes in the Ethereum network could affect the system.

Conclusion

Decentraland works as a virtual reality game based on blockchain technology. Everyone in the platform can create an avatar, buy parcels of LAND, trade, buy and sell goods and services, while also participating in its governance with votes. One key difference is that Decentraland’s tokens do have intrinsic, real-life value, so you can trade them in the real market.

Basically, Ethereum powers the whole Decentraland system and connects its economy, technology, and Ethos. The metaverse of Decentraland becomes an ever-developing world with constant features introduced by its community.