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EducationalDecember 31, 2021

What is Decentraland and how does it work?

Shubham Goyal
Product Specialist
December 31, 2021

Humans have been exposed to digitization for well over a decade now, and the result has not been disappointing. We have evolved from developing games on the internet to literally developing a digital life for ourselves on the internet.

With the buzz around metaverse, we know that living in an alternate reality is far from ‘just fiction’ now. The blending of Virtual Reality with Augmented Reality has made a seamless digital life possible. A digital space that lets you move around, socialize with people, buy or sell a commodity, and do a lot more.

On 8th December 2021, the metaverse recorded the biggest virtual real estate plot purchase worth $4.4 million by a developer who goes by the name Republic Realm.

Decentraland is one such virtual world built on blockchain tech. The three-dimensional virtual reality platform aims to thrive in the growing metaverse. It lets users become a part of its digital community and even purchase digital assets like plots of land, collectibles, artworks, and NFTs.

According to Macro Hive, the year 2021 has seen a massive hike of 37,000% in meta-related coins. The stats are nothing but a clear indication of the promising future of AR-VR projects in the digital landscape. But why is Decentraland going up? Well, to understand this, let’s first understand what is Decentraland exactly.

What is Decentraland?

In simple terms, Decentraland is a platform enabling users to be a part of a shared virtual world. And to do so, it has created an entire virtual ecosystem on its platform where users can buy or sell digital property, play games, exchange collectibles, socialize, interact and explore.

Decentraland was founded in 2015 by Ari Meilich and Esteban Ordano and launched in 2017. Decentraland began as a proof of concept where it could allocate ownership of a digital real state plot to its users on the blockchain. The platform was developed as a 2 Dimensional project that slowly transcended to a 3D world.

The 3-D virtual space is centered by a marketplace that sells virtual assets like land parcels and other customized assets which could be bought through its native token, MANA. MANA is an ERC-20 token built on the Ethereum blockchain. Users of Decentraland can buy MANA and LAND on several exchanges.

Every time users buy LAND; the MANA token is burnt to register a new entry. MANA and LAND govern operations in Decentraland. MANA is used to purchase LAND and other virtual good from the Decentraland marketplace. At the same time, LAND is used as an NFT that proves ownership of a user over the virtual asset.

Decentraland is a community-centric platform that uses DAO for its governance. DAO enables users of the platform to contribute to the developments of the platform. Users can participate in voting on development or modifications suggested for the platform.

How does Decentraland work?

The platform’s protocol has three layers. Decentraland maintains a ledger of land ownership of its users and tracks it through smart contracts. It acts as proof of ownership of the land purchased by its users. It also provides a P2P connection for Decentralanders to socialize and interact with each other.

Users of Decentraland can not only benefit from buying and selling of land they own, but they can also rent these assets to other players on the platform. The platform at present has about 90,601 individual LAND that can be traded.

The Decentralized Marketplace is a highlight of the network where the users can buy or sell the assets they own. The interoperability of the crypto network enables users to value their assets beyond the platform. The decentralized identity system of Decentraland allows anyone on the blockchain to verify the consent of the user through cryptographic signatures quickly.

MANA Token

MANA can help users to create decentralized games, apps, and other services on Decentraland and lets them monetize their creation. Users can build anything they desire and explore the virtual space as they please.

Ari Meilich, in one of his recent interviews, gave out some real-time numbers of Decentraland and its users. According to the report, Decentraland has about 3,00,000 active monthly users, 18,000 daily active users, and the platform has a concurrency of 2,500. Fascinating, right?

With intensive media hype and the subsequent growth, the numbers are obvious. But only time can tell if the digital real estate boom will make it past the hype!

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