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What Is MANA Used for in Decentraland?

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MANA is among the top cryptocurrency tokens for investors and has seen high demand in the market due to its utilization on the Decentraland metaverse platform. The value of the token rose steadily in the fourth quarter (Q4) of 2021, reaching an all-time high in November after the cryptocurrency’s total market valuation hit roughly $9.2 billion USD.

Although MANA’s value has declined since then, it still remains one of the most promising investment options for those interested in generating revenues from the development of the Metaverse, due to its versatility and the rich features that it unlocks for Decentraland users.

What Is Decentraland?

To understand the role of MANA in the metaverse, we must first look at how it is used in virtual environments such as Decentraland.

Decentraland is a 3D, virtual reality (VR) platform that provides users with a host of interoperable VR experiences like gameplay, events, simulations, and collaboration. Users can log into Decentraland and visit any of its individual spaces hosting events and activities.

Decentraland was first launched in 2017 and became generally available to the public in 2020. It is among the earliest movers in the Metaverse segment, as it provides a large-scale, decentralized platform for user activities, with a self-sustained economy. The cryptocurrency token MANA is central to the platform’s economy as it enables in-app purchases, investments in digital assets, and creator monetization.

What Is MANA?

A key characteristic of the open Metaverse is its decentralized nature, built on a blockchain architecture. This means that an open metaverse platform does not have a single point of ownership – multiple users together have a stake in its development as they purchase different Metaverse components (parcels) using cryptocurrencies.

One can think of a decentralised Metaverse as a fully public company where no single investor holds the majority of shares. Instead, a vast and increasingly larger group of people purchase shares through a currency that in itself is democratized.

That is why every metaverse platform has its own cryptocurrency token, as the driver of its economy. The Sandbox operates on the token SAND, gaming Metaverse Axie Infinity uses AXS, Decentraland has MANA, and even Meta Platforms Inc. has worked on a token called DIEM in the past.

MANA is a cryptocurrency token built on the Ethereum blockchain protocol that is used to buy and sell things on the Metaverse platform, Decentraland. Every item on the platform’s marketplace is priced in MANA, ranging from a fraction of 1 MANA, equal to less than a dollar, to several thousands of MANA for parcels of land.

How Is MANA Used in Decentraland?

On the Decentraland platform, users need MANA to:

●       Operate a wallet – When a person signs up for Decentraland, their digital wallet is connected to the Metaverse platform. The wallet helps store all the digital assets in the cloud rather than on a local device. MANA is integral to the wallet’s operation as all transactions will use this cryptocurrency token.

●       Buy wearables – Wearables are some of the most popular items on the Decentraland marketplace. Here, users can purchase different hairstyles, eye colors, external accessories like tiaras and sunglasses, flags, surfboards, jewelry, and a host of other add-ons for their avatar.

●       Invest in property – The virtual real estate in Decentraland consists of hundreds of parcels, which are available for sale. In order to buy these land parcels, users need MANA. Decentraland property can be extremely expensive, with investors paying millions of dollars for a single block or street in VR. In the future, these properties can be leased out to Metaverse users or event organizers for a fee.

●       Earn money – Decentraland offers a number of ways to make money such as buying and selling products valued in MANA. When the market undergoes a downswing, users can pick up items and land for a relatively low value for auctioning later on the Decentraland’s marketplace.

●       Get a mortgage – A minimum down payment in MANA will allow you to request a mortgage and purchase a piece of Decentraland real estate. Users can submit a small amount at the beginning and gradually pay off the mortgage at a standard interest rate.

●       Trade in crypto – One does not need to be a Decentraland user to buy and sell MANA. It is a popular asset class in its own right and crypto traders can make MANA part of their larger portfolio. All leading crypto exchanges allow you to buy MANA, with or without a Decentraland account.

What Is the Value of MANA?

MANA’s value constantly changes depending on the cryptocurrency market. Typically, MANA becomes more expensive following an important event on Decentraland, such as the purchase of a high-value plot of land.

Just like a company’s share prices increase after a spate of positive news, MANA’s valuation reacts to positive and negative trends in the Metaverse.

To date, one MANA was equal to $2.76, a 4.4 percent decline from the previous day. This is significantly lower than the upper thresholds of MANA valuation, which can go up to nearly $5.5 dollars.

Most importantly, the value of MANA is much more volatile than regular US dollars or any other real-world currency, which provides investors with the opportunity to quickly generate profits but also adds to the risks involved.

What’s Next with MANA in 2022?

At the beginning of 2022, one MANA was worth $3.30, but has seen a largely downward trend since then. This is following last year’s dramatic rise, which means that the market is gradually approaching stabilization through downward correction. Also, Meta’s falling share prices created a ripple effect, which could be why MANA prices are currently down.

2022 could see renewed interest from investors and Decentraland will gradually mature into a platform of choice in the Metaverse segment. The token will remain central to the platform’s operations and new users must buy and earn MANA to make the most of Decentraland.

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