As ridiculous as it may sound, the era of the digital land rush is upon us. Online land parcels are being sold for millions of dollars, which is a testament to the industry’s potential. The total land value in the top four metaverse platforms, including Decentraland (CCC:MANA-USD), topped $500 million last year. That figure should double this year, pointing to more upside for MANA and its peers.
Decentraland is one of the more established players in the evolving metaverse phenomena. The platform was launched back in 2017, and it was fully opened to the general public in 2020. Virtual land sales on the platform can be traced back to 2018, when Ripio, a credit network, bought a land parcel for $150,000.
MANA blew up after Facebook’s rebrand to Meta Platforms (NASDAQ:FB) last year, but has slowed since then along with the rest of the crypto market. Nevertheless, it remains a long-term play at the burgeoning metaverse. It is investing heavily in courting big brands on its platform and improving the quality of its service. Therefore, it’s a crypto to watch out for this year.
Decentraland Has a Community That Cares
Decentraland’s leadership has done incredibly well to foster a community of engaged users who genuinely care for it. They continue to create new ways for users to interact and share ideas on improving the platform.
A glance at some of Decentraland’s events shows how connected the community has become. The events page shows a whole host of programs that are open to anyone, including concerts, art gallery openings and casino game nights. Hence, people with real interests are designing the platform’s future.
On top of that, the platform has been gaining immense traction from some of the biggest brands globally. Some of the brands that have purchased virtual land on its platform include PwC, Adidas (OTCMKTS:ADDYY) and Coca-Cola (NYSE:KO). Naturally, other multinational companies will likely follow suit and start investing heavily in online real estate.
Furthermore, Decentraland will be hosting the first virtual fashion week inside its metaverse in late March. Multiple brands will be part of the show, and its visitors can attend the fashion shows, musical performances and other festivities.
The Risks to Consider
Metaverse tokens took center stage and shot up incredibly after Facebook’s rebranding. Since then, they have been muted by the rest of the market. Hence, there are concerns about whether Decentraland and other metaverse tokens have the catalysts to perform as well as last year.
Artur Sychov, CEO of top metaverse Somnium Space, recently talked about how the online real estate market may be overheated. He states that financial speculation has been driving up online land prices and that market players are exploiting other people.
Moreover, though Decentraland’s members are highly invested in the platform, the number of daily active users may seem unattractive to investors.
Nevertheless, Decentraland remains a remarkably robust platform. Its users are investing their time and efforts to see the platform grow. A huge proportion of the setup events offer no monetary benefits to the members involved. It has a thriving economy that continues to grow via a bottom-up approach.
The Bottom Line on Decentraland
The metaverse is still in its nascence, and there’s plenty of speculation on what it might hold for the future. Nothing is for certain right now, but if you want exposure to the explosive industry, MANA is perhaps the best investment at this time.
There are a few risks that are worth noting, but they can’t take away from the long-term potential of the platform. Hence, investors should go long with Decentraland.
On the date of publication, Muslim Farooque held a long position in Decentraland. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
