Decentraland (MANA-USD) gained a lot of traction after Mark Zuckerberg renamed his company to Meta Platforms (NASDAQ:FB) and shifted its focus towards blockchain-based virtual reality worlds. After the announcement of the Metaverse, MANA’s value reached an all-time high. However, according to Alphabet‘s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Trends, the hype around Decentraland seems to have diminished substantially.
Although the real estate market in Decentraland is expanding, and its long-term perspectives remain promising, MANA is still a very risky investment compared to many other leading cryptocurrency projects. Moreover, Decentraland has to compete with other virtual reality worlds like Meta’s Horizon Worlds and Microsoft’s (NASDAQ:MSFT) The Sandbox. Both companies have substantially more resources and outreach than Decentraland.
Decentraland has a monthly active user base of around 300,000 people and MANA’s current market capitalization is about $4.86 billion (at the time of writing), putting the value of each Decentraland user at about $16,200.
On the other hand, Meta’s Facebook has 2.91 billion monthly active users with a market cap of $573 billion, putting the value of each Facebook user at $196. The wide user value discrepancy between Meta and Decentraland indicates that MANA could still be overvalued.
Sure, the two companies are at different points in their metaverse journey. But Decentraland also faces some significant issues such as excessive fees. Decentraland is also less user-friendly than The Sandbox and Horizon Worlds. That may change as the platform evolves, but its issues will undoubtedly affect user retention.
Another significant problem is that Meta itself is facing difficulties carrying out its vision of the Metaverse. The company has reportedly burned through $500 billion trying to implement its plans. It can be argued that Decentraland could compete more due to Meta’s letdowns. Still, it is unlikely considering Decentraland gained significant popularity after Meta’s announcement. If Meta fails to carry out its goals, the negative impact on Decentraland would also be heavy.
Decentraland has different, complex factors that make it extremely hard to determine the future value of its currency. In short: MANA is risky, and I would not find it worthwhile to invest a handsome amount of money into it right now. Alternative cryptocurrency projects focused on utility have significantly less risk.
In my opinion, the following crypto projects are some top picks:
- Algorand (ALGO-USD)
- Bitcoin (BTC-USD)
- Cardano (ADA-USD)
- Dogecoin (DOGE-USD)
- Ethereum (ETH-USD)
- FTX Token (FTT-USD)
- Polygon (MATIC-USD)
Alternative to Decentraland: Algorand (ALGO)
ALGO relies on its native consensus model, which paves the way for a trustless network, making it a pure proof-of-stake system. ALGO also has automatic staking and cheap transaction fees, making it easily scalable and profitable to hold in the long term. Moreover, it is in the fast-growing non-fungible token (NFT) market and has a growing ecosystem. So ALGO can be a good investment due to its strong focus on utility and scalability.
According to CoinMarketCap, ALGO had an all-time-high value of $3.28 three years ago and dropped considerably from there. However, ALGO has steadily regained value since bottoming out due to its fast transaction speed and low transaction costs.
Its market capitalization is similar to that of MANA. However, ALGO has an independent blockchain and better utility, making it relatively undervalued.
The biggest drawback is that the ALGO team focuses almost entirely on utility, leaving little room for marketing and real-world promotion. Still, those drawbacks are somewhat compensated by its loyal patrons who constantly promote the project.
According to CoinMarketCap, ALGO currently trades around 82 cents and has a market capitalization of $5.4 billion.
The oldest cryptocurrency in the field and the one with the largest market capitalization, BTC can still be profitable. BTC performs exceptionally well in bull markets and leads most of the crypto market. It is also the most secure, with about 200 exahashes per second (EH/s) securing the network.
If you’re looking to invest in crypto with lower risk, BTC should undoubtedly be your first choice. Throughout its 13-year history, BTC has recovered from every bear market with an even stronger bull market. The long-term prospects for it are therefore proven and tested.
The biggest drawback for Bitcoin would be its lack of upgrades and objectives. The latest upgrade, Taproot, was the most significant upgrade in over four years.
The Bitcoin network unfortunately also consumes an enormous amount of power to secure its network. The power usage is widely used to criticize Bitcoin because of its effects on the environment. The network has no plans to move to a more environmentally friendly proof-of-stake system.
It also lacks regular upgrades to improve its scalability.
According to CoinMarketCap, BTC is currently valued at $38,685 and has a market cap of $734 billion, making it the most valuable cryptocurrency.
Alternative to Decentraland: Cardano (ADA)
ADA has great potential, as it is one of the only cryptocurrencies pursuing real-world usage and adoption. ADA plans to create a tangible impact on the lives of people living in third-world countries by giving them access to blockchain technology.
According to Cardano Africa, Input Output’s CEO Charles Hoskinson, CPO Dynal Patel, CCO Gerasimos Fragiskatos, and Director of African Operations John O’Connor discussed topics about “… the impact blockchain can make and laying the groundwork for a four-year plan to transform the continent.”
Despite ADA’s plans for a campaign for rapid adoption in Africa, there has been little groundwork. Four years is certainly not enough time to transform how people in a whole continent transact, but Cardano can expect to achieve decent adoption in Africa given enough time.
Moreover, compared to other cryptocurrencies, ADA hasn’t seen a rebound since its fall from the all-time high of $3.10 in September 2021. However, its plans in Africa are still promising and given enough time, ADA could be an ideal investment.
but this is all on a long time horizon. For short-term traders, I believe ADA has a long way to go until it shows significant results and is likely to be a worse investment than Decentraland for the near term.
According to CoinMarketCap, ADA currently trades around 90 cents and has a market cap of $30.2 billion.
DOGE might be a meme coin, but I believe it to be a great long-term investment because of its plans to expand utility and scalability. DOGE also has the wealthiest person on the planet, Elon Musk, passionately promoting it and has the developer of the second-largest cryptocurrency network, ETH as a Dogecoin Foundation board member.
DOGE also seeks to move to a more environmentally friendly proof-of-stake model in the future with the help of ETH founder Vitalik Buterin. Dogecoin Foundation launched a manifesto and a trailmap to expand into a more robust network, and combined with the proof-of-stake system; it could drive the adoption of DOGE.
Moreover, Tesla (NASDAQ:TSLA) CEO Elon Musk can help drive more adoption by making it possible to purchase Tesla vehicles with DOGE, just as he had done with TSLA merchandise. Musk can also drive up adoption by having his other companies accept DOGE as payment too. Considering his passion for having Dogecoin as a mainstream payment system, I see it as very likely to happen in the future. Moreover, as his companies get larger, it could have an even more significant effect on DOGE.
According to CoinMarketCap, DOGE currently trades around 13 cents and has a market capitalization of $16.8 billion.
Alternative to Decentraland: Ethereum (ETH)
ETH is the second-largest cryptocurrency by market capitalization. The Ethereum network is also extremely vast, with over 442,647 ERC20-compatible tokens functioning on the network. These tokens include Chainlink (LINK-USD), Tether (USDT-USD), Shiba Inu (SHIB-USD), Wrapped Bitcoin (WBTC-USD), MATIC, and MANA.
ETH is one of the most secure and decentralized cryptocurrencies and is an excellent investment that will likely overtake BTC as the currency with the largest market capitalization someday. ETH has also increasingly outperformed Bitcoin this year.
I expect ETH to keep outperforming MANA and most other coins. This is due to the large number of ERC20 tokens that rely on Ethereum. ERC20 tokens directly use ETH to pay transaction fees, which make Ethereum very important for crypto. Moreover, Ethereum is also starting to migrate to a proof-of-stake model to be less energy-intensive and improve utility. Moreover, Ethereum 2.0 could give ETH the push it needs to surpass BTC’s market capitalization.
The most significant disadvantage to ETH would be its high gas fees. It is currently impossible to make small, regular payments without having the gas fees break the bank. Fortunately, layer-2 solutions can solve gas-fee-related problems in the future.
According to CoinMarketCap, ETH currently trades at $2,820 and has a market capitalization of $337 billion.
FTX Token (FTT)
The FTT token is the native asset of the FTX exchange. I believe FTT has considerable future potential because even in a bear market, the FTX exchange has not only been resilient but has grown to a $32 billion evaluation.
The consistency and resilience of the exchange should be a sign that it is a better investment than MANA. If the FTX exchange continues to grow at the current rate, it would be easy to believe that FTT can compete with the Binance Coin (BNB-USD) in the future.
One drawback, however, is that Binance is huge and it will be a long time before FTX Token can get there. Location restrictions throw more of a wrench into the works.
FTT has been one of the most stable and consistent cryptocurrencies in its market cap range. According to CoinMarketCap, FTT currently trades around $44.52 and has a market capitalization of $6.1 billion.
Alternative to Decentraland: Polygon (MATIC)
I believe MATIC to be massively undervalued — more undervalued than any other cryptocurrency. MATIC has over 7,000 Dapps and has excellent integration with other projects and the Ethereum network. MATIC fundamentally transforms Ethereum into a full-fledged multi-chain system and makes Ethereum scaling easy and efficient.
Not to mention, Polygon has become a big player in the NFT space.
The ecosystem seems extremely promising in the long term due to its consistency. MATIC’s utility, success with NFTs on OpenSea, and links to more significant projects make MATIC highly undervalued.
I would consider MATIC over MANA in not only the short term, but in the long term as well. MATIC can rise significantly in value due to the massive market capitalization of the projects it has close integration with.
According to CoinMarketCap, MATIC currently trades at around $1.56 and has a market capitalization of $11.7 billion.
On the date of publication, Omor Ibne Ehsan held a LONG position in MANA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.