Decentraland is an Ethereum-based blockchain platform where users can purchase, build and monetize virtual reality applications. Users can purchase virtual land in the platform’s world which gives them ownership and control over the environment and applications they create within their land.
Created in 2015 by Ari Meilich and Esteban Ordano, Decentraland started as a simple, pixelated grid that allocated pixels to users through a proof-of-work algorithm. Decentraland has since then evolved into a new, 3D world in which users utilize two tokens to interact with the platform and purchase land, goods and services “in-world.”
It is divided into a limited number of parcels known as LAND (represented by a non-fungible ERC-721 token), which can be purchased with MANA, an ERC20 token. The owners of each parcel of LAND are provided full creative freedom within their parcels and receive all income generated by their creations.
In order to foster the network and attract new users, the Decentraland Foundation has hosted a variety of contests to create art, games, applications, etc., and developers and content creators were rewarded as a result. Furthermore, new users were given allowances of MANA tokens which facilitated their immediate interaction with the virtual economy.
How Does Decentraland Work?
Decentraland is an Ethereum-based virtual reality blockchain platform where users can purchase, build and monetize applications. Decentraland is a 3D world in which users utilize two tokens to interact with the platform and purchase land, goods and services “in-world.” It is divided into a limited number of parcels known as LAND (represented by a non-fungible ERC721 token), which can be purchased with MANA, an ERC20 token.
Owning LAND gives users ownership and thus full control over the environment and applications they create within their land.
Launch and issuance
Decentraland completed its initial coin offering in August of 2017 and raised approximately $24 million worth of ETH, BTC, and other cryptocurrencies.
The initial supply of MANA was distributed as follows: 40% was sold in the initial sale, 20% was distributed to the community and partners (allowances that facilitated immediate interaction with Decentraland), 20% was distributed to the founding team, and 20% was retained by the Decentraland foundation.
Users initially purchased LAND in two different auctions, the first of which happened in December 2017, and the second of which took place in December 2018. Each auction was conducted as a “dutch auction,” meaning that each available parcel was set at the same starting price and decreased over the course of the auction until it reached an acceptable price to a user.
Once the LAND was purchased, the MANA cryptocurrency used for the purchased was burned, meaning that the tokens were either deleted or sent to an empty, irretrievable address.
In the secondary market, the purchase and sale of LAND happens at the discretion of the primary owner of LAND parcels.
Network design and security model
Decentraland is a virtual reality platform powered by the Ethereum blockchain that utilizes two tokens. MANA is an ERC-20 token that serves multiple purposes, where it is mainly burned in order to claim LAND (an ERC-721 token) as well as to make in-world purchases of goods and services4. Decentraland is divided into a total of 90,000 parcels of LAND, each measuring 16 x 16 “meters.”
MANA can be stored in ERC-20 compatible wallets.
The maximum supply of MANA is fixed at 2,644,403,343 MANA.
Changes to parcels of LAND are registered in the Ethereum LAND smart contract and verified by the Ethereum blockchain.