Decentraland is a blockchain-based platform for virtual reality content, allowing users to own provably unique virtual land as ERC-721 tokens.
In this decentralized virtual world, users can purchase virtual land and develop their own projects, such as 3D animations or peer-to-peer applications. Potential applications range from games to gambling, marketplaces, virtual workplaces for businesses, virtual tourist attractions, and virtual advertising space. Users will have full control over their virtual parcels of land, including the right to any revenue they extract from their virtual property. Information about land ownership and content is managed on the Ethereum blockchain. Smart contracts validate that modifications were made by the owner of the virtual land. This prevents non-owners from making destructive changes to property. The content of the virtual world will be distributed using IPFS, an open-source protocol for storing data, removing duplicate files, and indexing storage locations in a distributed network. Each parcel of land is limited to 100 square meters per project or site, a limit intended to create scarcity for virtual lands and protect their value. However, users can build as high as they want.
Development started with a fork of bcoin, a modified Bitcoin blockchain, and the team developed a 3D virtual world on top of it. A hash is created for the content description of the parcel of land and stored on the Blockchain. Users can fetch the content using the BitTorrent network via the Kademlia protocol, which shards digital content and distributes it across a network of participant nodes. A modified version of the Kademila protocol is used by Storj and MaidSafe. Decentraland uses Unity as the browser and HTC Vive as the VR headset.
Unlike other sandbox virtual worlds, such as Minecraft, in which the game’s developers define rules for resource extraction and use, LAND is a largely blank slate. Users have a high degree of autonomy in how they use their own LAND, including the ability to charge other users to view or use private interfaces or surfaces. Decentraland will take steps to ensure a quality and user experience, including unrestricted teleportation, disincentivization of resource camping, and recourse against LAND being boxed in by surrounding parcels. In many virtual game worlds (including Minecraft) players could choose to mine for resources such as gold, because they know that their virtual land might have gold ore deposits. If a Decentraland user wanted to mine for gold on their LAND, they would first have to develop a set of protocols for allocating resources within their LAND, mining those resources, storing them, and finally utilizing them in some way that benefits the player.
Ultimately, the economic logic of MANA is similar to that behind settling unsettled land: acquire it with the intent to develop it or speculate others will want to develop. Once converted into a unique piece of LAND, MANA is burned and all that is owned is the LAND itself, which is totally unique (similar to physical real estate) and presumably for which a market will emerge. Decentraland is advised by Coinfund, has partnerships with District0x, Aragon, Binance, and MakerDAO, and has received public investment from Digital Currency Group. The founding team has extensive experience in the blockchain industry, including lead developer roles at Zeppelin Solutions and Bitpay, though this is their first major gaming project. This team serves as the primary developer of the platform, and provides a base layer of content curation.
The ERC20 token, MANA, will be burned to purchase LAND or in-world goods and services. Each parcel of land is represented by a non-fungible digital asset called LAND. LAND designates ownership of a 100 square meter parcel of land. Holders of MANA can claim LAND before deciding where to settle. LAND can be traded on a secondary market, though the location of a parcel of land within the virtual world is fixed upon the initial purchase with MANA. In the first auction in January 2018, users spent 161 million MANA (worth $30 million) on 34,356 parcels of LAND. The remaining 9,331 parcels of LAND are scheduled to be auctioned in a December 2018 dutch auction, with the date set by community vote. The project was initially funded by a public token sale of MANA, which raised $26 million for 40% of the total supply.