Decentraland (MANA)? A Virtual World Built on Ethereum

Decentraland (MANA)? A Virtual World Built on Ethereum

Decentraland is a unique, Ethereum-based virtual reality platform where users can dive into a world crafted by its community. It offers a space where players can play, explore, and interact with various games and activities. In this user-owned digital realm, creativity is limitless. Users can purchase and develop land parcels, build environments, marketplaces, and applications, and create and trade wearable items, artwork, and Non-Fungible Tokens (NFTs).

As a decentralized virtual world, Decentraland allows its members to participate in governance through the Decentraland DAO, a decentralized autonomous organization. This governance model empowers users to have a say in the project's direction. The platform's economy is underpinned by three native tokens — MANA, LAND, and Estate — each playing a unique role.

Decentraland stands out in the digital landscape by offering more than just play-to-earn gaming mechanics. While traditional video games often limit player ownership and influence, Decentraland enables players to own in-game items and earn money, integrating blockchain technology into its core. This approach not only adds an economic dimension to the gaming experience but also contributes to building a full-scale digital analog to the physical world.

What is Decentraland?

Decentraland, launched to the public in January 2020, is an innovative Ethereum-based virtual world, governed by its users through a decentralized autonomous organization (DAO). It's a platform where creativity meets blockchain technology, allowing users to buy, develop, and interact with digital land parcels, called LAND, and merge them into Estates. These parcels can be transformed into various virtual spaces like shopping malls, museums, and event spaces, echoing real-world applications.

The journey of Decentraland began in 2015 when founders Ari Meilich and Esteban Ordano experimented with NFTs. Their pioneering work in digital asset ownership laid the groundwork for what Decentraland has become: a comprehensive metaverse platform. The success of Decentraland is evident, with significant landmarks like Sotheby's virtual headquarters and celebrity investments indicating its impact on mainstream metaverse adoption.

Decentraland is not just a gaming platform but a virtual economy interconnected with the real world. It operates with two main tokens: LAND, representing individual land parcels, and MANA, the platform's currency used for transactions and purchasing in-game goods. Users can benefit from a decentralized model, gaining from transactions occurring within the platform, reducing the risk of censorship, and enhancing security.

Moreover, Decentraland is more than a virtual space; it's an experiment in digital, decentralized utopia, integrating Ethereum's blockchain technology. Users experience this through avatars, engaging in various activities like buying digital art, trading, and learning, all facilitated by the platform's tokens. Decentraland symbolizes a shift from traditional, centralized digital spaces to a user-governed, blockchain-based virtual realm, blending entertainment with real-world asset value and governance.

How does Decentraland work?

Decentraland, a groundbreaking virtual reality platform built on the Ethereum blockchain, is a testament to the power of decentralized technology in creating a dynamic digital world. The application is intricately designed to track real estate parcels represented by LAND tokens, with the Ethereum blockchain meticulously recording each parcel's ownership. Users interact with this ecosystem using the MANA token, held in an Ethereum wallet, which is a fundamental aspect of engaging with Decentraland’s diverse offerings.


At the heart of Decentraland's architecture is its sophisticated three-layered protocol. The consensus layer is responsible for maintaining a ledger of land parcel ownership through Ethereum smart contracts. Each LAND token is unique, featuring specific coordinates in the virtual world and linking to a description file that details the content of each parcel. The content layer, meanwhile, manages the activities within each parcel, encompassing everything from static audio and visual files to scripts that define content placement and behavior. Additionally, the real-time layer enriches the user experience by enabling social interactions, including voice chat and messaging, through user avatars.

Token Economy

Decentraland's digital economy is underpinned by a sophisticated token system that utilizes both ERC-20 and ERC-721 tokens, each serving distinct purposes within the platform. MANA, an ERC-20 token, functions as the primary in-world currency, facilitating all in-game purchases. Its fungibility, where each MANA token is identical and interchangeable with another, makes it an ideal medium for transactions within Decentraland.

On the other hand, LAND and Estate tokens, based on the ERC-721 standard, are unique, non-fungible tokens (NFTs). Each LAND token represents ownership of a virtual parcel of real estate within Decentraland, and these parcels can be combined to form Estates, representing larger land holdings. The uniqueness of each LAND and Estate token means they are not interchangeable, making them perfect for representing ownership of one-of-a-kind digital assets like avatars, wearables, and land parcels.

The functionality and characteristics of MANA, LAND, and Estate are defined by three specific smart contracts: the MANAtoken contract for the MANA currency, the LANDregistry contract for individual land parcels, and the EstateRegistry contract for the combined estates. The virtual space in Decentraland is composed of these individual parcels of LAND, which can be purchased with MANA in the Decentraland Marketplace. This marketplace also allows users to buy unique wearables for their avatars, including clothing and accessories, with each transaction being recorded on the Ethereum blockchain.

In addition to enabling purchases, owning LAND in Decentraland allows users to create digital environments and applications, such as games or themed communities, which can be monetized. This feature has been utilized by various crypto companies to establish virtual offices and art galleries, and the platform has also hosted a variety of virtual conferences. The integration of these two types of tokens, MANA and LAND/Estates, along with the innovative use of smart contracts, forms the backbone of Decentraland's thriving digital economy.


Decentraland distinguishes itself from other virtual worlds through its unique governance structure, operating as a decentralized autonomous organization (DAO). This DAO, crafted using Aragon technology, allows for collective decision-making by the community of token holders. In this democratic setup, users wielding MANA, LAND, and Estate tokens have the power to influence the platform's direction, including decisions on grant allocations, modifying lists of banned names, and changing smart contracts.

Voting within the Decentraland DAO is structured around the concept of "wrapped" tokens. Wrapping MANA (wMANA) involves locking the tokens in the DAO, rendering them non-transferable and non-spendable, but granting one unit of voting power per token. Similarly, LAND and Estate tokens provide substantial voting power, with each parcel of LAND or Estate offering 2000 units. While LAND and Estate tokens must be registered to the DAO for voting, this does not restrict their normal use or functionality.

Beyond the DAO, Decentraland's governance is further reinforced by a Security Advisory Board (SAB). This board, comprising members elected by the Decentraland community, is tasked with overseeing the security of the platform’s smart contracts and reviewing governance proposals. They possess the authority to delay or veto proposals that may negatively impact Decentraland.

Decentraland's governance model not only emphasizes a decentralized approach but also integrates user ownership in a way that transcends traditional digital platforms. This model allows users to directly transfer the value they create within this virtual world into the tangible world, embodying the spirit of decentralization. From engaging in medieval dungeon puzzles to racing cars, or even managing digital real estate, Decentraland represents more than a mere game; it's an experiment in creating a world shaped by the principles of decentralization.

Marketplace and Builder

Adding to its multifaceted nature, Decentraland offers a marketplace and builder tools. The marketplace enables users to trade LAND tokens, priced in MANA, and other in-game items. All transactions are secured and verified through the Ethereum blockchain. The builder tools empower users to craft unique experiences within their LAND parcels, using a drag-and-drop editor and a library of customization options.

Decentraland represents an intricate blend of blockchain technology, virtual reality, and community-driven governance, creating an immersive, user-owned digital world that extends far beyond traditional gaming and virtual environments.

Decentraland use cases

From its inception, Decentraland has been designed with a vision to harness blockchain technology for diverse community-based applications. The developers have identified five primary use cases, as detailed in their foundational document:

  • Application Development: The platform enables users to craft their own applications and 3D scenes, leveraging Decentraland's unique scripting language. This functionality allows for enriched user interaction and a broader scope of virtual experiences.
  • Content Curation: Decentraland has seen the evolution of distinct neighborhoods. These areas have become hubs for users with shared interests, fostering the growth of natural, community-driven environments within the virtual space.
  • Advertising Opportunities: The influx of players in various neighborhoods has created opportunities for brand promotion. Companies are capitalizing on this by purchasing spaces for advertisements, such as virtual billboards, tapping into the platform's engaged audience.
  • Digital Collectibles: The Decentraland Marketplace is a vibrant center for trading Non-Fungible Tokens (NFTs). Here, users can collect, create, and trade digital items, which are valued for their uniqueness and verifiable ownership rights.
  • Enhanced Social Interactions: The platform offers a new dimension to socializing for both online communities and offline groups. It provides an interactive and immersive way for friends and acquaintances to connect and engage with each other in the virtual world.

In addition to these use cases, Decentraland presents economic opportunities characteristic of blockchain-based games. The virtual real estate market within the platform is particularly active, with certain coveted LAND parcels being traded for significant amounts. This aspect of the platform allows users to engage in speculative investments, often leading to considerable financial gains.

Overall, Decentraland stands out as a multifaceted virtual world, merging application development, community engagement, advertising, digital collectibles, and social interactions, all within a blockchain-enabled economic framework.

Decentraland vs. Sandbox

Decentraland and The Sandbox are both prominent players in the burgeoning metaverse landscape, offering decentralized, digital worlds on the Ethereum blockchain. While they share certain features, each platform has its distinct characteristics and focuses.

Both platforms allow users to purchase and monetize virtual real estate, referred to as LAND in both worlds. Users can connect their crypto wallets, interact using avatars, and utilize various digital items within these virtual environments. Additionally, both Decentraland and The Sandbox are governed by decentralized autonomous organizations (DAOs), reflecting a community-driven approach to decision-making.

However, the similarities end there, as each platform caters to different user experiences and objectives. Decentraland is an open-source virtual world with a broad range of applications. It enables users to host digital events, create diverse content ranging from art and applications to personal spaces and games. This versatility makes Decentraland a multifaceted platform, accommodating various interests and activities.

In contrast, The Sandbox is more focused on play-to-earn aspects, providing a space where users can create games, animations, and 3D content. This emphasis on gaming content creation and the play-to-earn model marks The Sandbox as a hub for interactive, blockchain-based gaming experiences.

The scope of these platforms is also reflected in their available land plots: Decentraland offers a total of 19,601 land plots, while The Sandbox boasts a significantly larger number with 166,464 plots. This difference in scale impacts the type of communities and interactions that develop in each world.

Furthermore, each platform has its native cryptocurrency, integral to its respective ecosystem. Decentraland operates with MANA, while The Sandbox uses SAND as its currency. These tokens play crucial roles in transactions, governance, and participation within their respective worlds.

While Decentraland and The Sandbox share foundational similarities as decentralized virtual worlds on the Ethereum network, they diverge significantly in their purpose, scale, and economic models, offering unique experiences and opportunities to their users.


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