In the future, luxury brands may have storefronts in the virtual world, where users can browse their stores as if they were walking through a physical store. But between buggy software, minimal user base, and a system that allows users to buy and sell the bad guys with just a complex governance system to be able to stop them, the odds seem to pile up. on top of each other this the foundation on which to build them.
And investors seem to believe that money will be made here.
Money
The big advantage of Decentraland is that users can go to “buy land” in the game, but the process to do so is complicated. Users cannot purchase land tokens directly with regular dollars. Most can’t even be bought with ether, a popular bitcoin alternative. Instead, like many other crypto projects, Decentraland has its own cryptocurrency called mana, which lives on a sidechain of Ethereum.
Sidechains are complex, but in terms of over-simplification, they allow projects to offload tokens or data onto a separate blockchain that may have different features (and often transaction fees). lower) than the main chain. Crucially, it means that while Decentraland is based on ether, the price of mana can be much more volatile than that of ether.
Present, cheapest land plot in Decentraland normally sells for around 4,000 mana, which at the time of writing this would cost close to $15,000. However, once a user buys land, they own that property until someone wants to buy that particular piece of land — tokens are non-fungible, after all. On the other hand, mana To be fungible, which means that if a user is holding a large amount of energy, they can sell those tokens to anyone who needs to buy energy, including all new users who may have exported Now to buy land.
Since the land was too expensive and the mana consumption market was too small, it didn’t take long to find out the price. “If you put out a press release, does that change the price of ether? Yes, it can change the price of ether,” Olson explained. “But you know what is definitely going to change prices, which are energy prices and land prices.”
This happened to mana on a few occasions. In the two days after Facebook rebranded to Meta, the price of mana, which at the time, rarely exceeded $1, skyrocketed to $3.71. At the time, news outlets—starting with niche sites for crypto enthusiasts like CoinDesk, afterward CNBC later—Reported an increase in the price of energy and explained it as positive interest in “reversing”.
A few weeks later, on November 22, the 116-acre “land estate” in the previously mentioned Decentraland Fashion District sold for 618,000 mana. The next day, Tokens.com issued a press release announcing “the largest super reverse land acquisition in history,” picked up by several crypto sites, as well as Reuters and the National Post Office. When the press release has been issued, the price of mana is around $4.10.
