Introduction to Decentraland (MANA)

By iTrustCapitalMay 25, 20223 minutes read
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Understanding Decentraland (MANA)

Decentraland is a cryptocurrency and online game that’s compatible with the Ethereum blockchain. The Decentraland currency, MANA, is an integral part of the Decentraland metaverse. If you have played other metaverse-type games in the past, such as SecondLife, then Decentraland may have a familiar feel.

Investors can buy and sell MANA similar to many other digital currencies, or use it as part of the game experience to buy in-game land and objects. Here’s a closer look at Decentraland and how the MANA cryptocurrency works.

What is Decentraland (MANA)?

Decentraland is a metaverse game and MANA is the game’s native currency. Decentraland is used as money in the Decentraland Marketplace and trades like other cryptocurrencies on cryptocurrency exchanges and platforms.

Marketplace purchases can include clothing items for in-game characters, parcels of virtual land, and items to decorate virtual properties, among other playable objects. These objects trade as non-fungible tokens (NFTs), and many of the items in the marketplace are unique. The only accepted currency in the Decentraland marketplace is MANA. 

The MANA token is an ERC-20 token, meaning that it is supported by and compatible with the Ethereum blockchain. MANA uses the proof-of-work consensus method and is a governance token, meaning that MANA holders collectively govern Decentraland. The number of MANA tokens already in circulation is about 2.2 billion.

How does Decentraland (MANA) work?

How Decentraland works can be divided into two parts—how the metaverse game works and how MANA the digital currency works. 

The Decentraland game is a metaverse project built on the Ethereum blockchain. Here’s how it works: 

  • Participants in the metaverse buy and sell land, names, objects, and decorations via the Decentraland Marketplace.

  • Metaverse participants use MANA cryptocurrency to pay for purchases, and pay transaction fees in ETH—Ethereum’s native currency.

  • Players use their NFTs in Decentraland to participate in the metaverse.Players can also sell NFTs to other participants and trade MANA within Decentraland for real-world gains or losses.

As an Ethereum-based cryptocurrency, MANA uses the consensus mechanism called proof of work. The proof of work method requires “miners” with vast computing resources to compete to solve complex mathematical problems. The first miner to solve the puzzle wins the right to process the latest block of MANA transactions, and earns MANA rewards for doing so. 

Anyone with a compatible wallet or cryptocurrency account, including a crypto IRA, can buy or sell MANA even if they don’t play Decentraland. MANA holders, within Decentraland, can also choose to participate in the governance of Decentraland by submitting or voting on governance proposals

Collectibles on Decentraland

Decentraland features several different types of in-game assets. Here are the primary collectibles categories in the Decentraland Marketplace:

  • Land: In-game land parcels and estates are the “physical” locations where players interact in the Decentraland metaverse. Land in the game’s metaverse is in limited supply and can be very expensive, often costing thousands of dollars in MANA.

  • Names: Character names in Decentraland are tradable NFTs, used to identify players and send in-game assets. Users can claim a new name or buy one using MANA.

  • Items: Clothing and land decorations enable players to dress up their characters and build virtual dream homes.

  • Emotes: Emotes are actions that players can take in the game, such as waving or doing a dance move or pose.

A brief history of Decentraland

The concept of Decentraland was first described in a whitepaper released by its founders in January 2014. Decentraland was formally launched for the public in 2017 after more than two years of development by Ariel Meilich and Esteban Ordano, Decentraland’s co-founders.

MANA, as a cryptocurrency, was first released to the public in an initial coin offering (ICO) that spanned several months in 2017. The platform raised more than $24 million as a result of the ICO.

DISCLAIMER

This article is for information purposes only.  It does not constitute investment advice in any way.  It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.  

iTrust Capital, Inc. is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrust Capital, Inc. is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.  

Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody provider. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.  

Some taxes and conditions may apply depending on the type of IRA account. ​​Investors assume the risk of all purchase and sale decisions. iTrust Capital, Inc. makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrust Capital, Inc. does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional. 

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