Is MANA (Decentraland) a Good Investment?

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Contributor, Benzinga
Updated: July 25, 2022

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Metaverse tokens were all the rage in 2021, but there may be more room to grow in 2022. Ever since Zuckerberg pivoted his brainchild into "Meta", people have taken notice of the promises of the Metaverse. Since then, Decentraland, one of the biggest metaverses in existence, has skyrocketed in popularity and price.

Blockchain technology has brought what many experts call a financial revolution. Bitcoin was built as a peer-to-peer electronic cash designed to cut out the all-powerful financial institutions. Ethereum, the second-largest cryptocurrency by market cap, has furthered Bitcoin’s goal by becoming the foundation of a blossoming ecosystem of decentralized finance (DeFi). 

Decentralized applications (DApps) are built on top of Ethereum with a huge number of unique use cases. Finance is still the main focus of most cryptos, but gaming is quickly becoming an important part of the crypto scene. Developers wanted to build decentralized games with entire economies built into them. The most popular of these at the moment are Decentraland and Axie Infinity. It might be popular, but is Decentraland (MANA) a good investment?

What is Decentraland?

MANA is the ERC-20 token that powers one of the oldest experimental game ecosystems combining blockchain and virtual reality, Decentraland. The game started in 2016 as a simple 2D experience and has since evolved into an entire 3D world of customizable land, art, activities and much more. 

The platform also makes use of Non-fungible tokens (NFTs), which are unique and easily tradable digital assets stored on the blockchain. There are 90,000 plots of land in the game, each represented by an NFT. This has been a major selling point of Decentraland because you can become a virtual real-estate mogul by buying up cheap land NFTs and selling them for profit. You can even drive the value of your land up by adding improvements like artwork or fun activities.

Celebrities and brands have begun acquiring property in the metaverse, with the hopeful idea that one day they may drive more sales in the metaverse than in real life.

Decentraland is much easier to start playing than most of its competitors. You can even run it in a browser window. The game is also completely free to play, although the main attraction for many users is investing in virtual items or land. 

If you want to improve your experience in the game by purchasing land, character accessories, art or other fun items you will need to purchase some MANA first. Once you have your MANA, you can search the long list of NFT items on Decentraland’s marketplace.

One of Decentraland’s greatest features is its decentralization. Voting is done through the Decentraland Decentralized Autonomous Organization (DAO). Anyone with a few MANA tokens or a plot of in-game land can create and vote on proposals to change the game. While many blockchain-based games promise decentralization in the future, Decentraland is one of the only ones to actually deliver on it so far. 

Decentraland Price

Decentraland is now a massive cryptocurrency, with a relatively large market capitalization at about $8 billion. It has a circulating supply of 1.82 billion tokens (about 100 times larger than Bitcoin’s). 

While even more popular tokens like Cardano, Chainlink and Dogecoin have much greater market caps, Decentraland is still the 2nd largest gaming crypto behind Axie Infinity. MANA has seen tremendous growth since the beginning of this year. On January 1st, 2021, you could buy MANA for a measly $0.08 per token. In a little more than 11 months, it skyrocketed to reach its all-time high over $5.2. Currently, it sits around $0.92, down along with the rest of the crypto market.

Unfortunately for token holders, this peak didn’t last long. As of January 2022, the token price is consolidating around $3.00.

Decentraland Competition

Decentraland’s largest competitors are The Sandbox and Axie Infinity. All 3 projects became incredibly popular by using monetary incentives, but the games themselves are unique. Decentraland and The Sandbox each created an entirely new virtual world, and Axie Infinity is primarily a play-to-earn battling game. 

In Axie Infinity you battle other players with teams of NFT creatures inspired by the popular series Pokemon. As you progress through the game, you earn mostly Small Love Potion (SLP) tokens and sometimes Axie Infinity (AXS) tokens during special events. You can make a significant amount of money directly from playing Axie Infinity whereas Decentraland and The Sandbox mostly create diverse investment opportunities. 

Decentraland and Axie Infinity have remarkably high buy-in costs and investment in The Sandbox is only a little bit cheaper. You need to buy at least 3 Axie NFTs to play Axie Infinity, which used to be worth up to 100s of dollars each, however, today you can get Axies for much cheaper.

Starting an investment in Decentraland Land is also expensive and the cheapest available plot at the time of writing is on sale for over $3,000. There are cheaper accessories available, but they can still be quite pricey. 

However, Decentraland is free and incredibly easy to start playing to check out some of the fantastic user creations in the 3D world. The Sandbox is also free to play and even offers free voxel editing software that enables users to make incredible items, accessories and even whole games. It’s hard to tell which game and accompanying crypto will perform better, but all 3 have performed much better than any of their competitors so far. 

How to Buy Decentraland.

Looking for a quick and easy way to buy some Decentraland? All you need to do is follow these simple steps. 

  1. Open an online account.

    Before you can invest in Decentraland, you will need to sign up for an account with a trading platform that offers it. Some of the best exchanges with Decentraland are Coinbase, eToro and Voyager

    You will also need to verify your identity with the exchange before you can start trading. This usually requires you to provide your address, Social Security number and a picture of your driver’s license. Once your identity is verified you can fund your account and buy some Decentraland. 

  2. Buy a wallet (optional).

    Many cryptocurrency investors, especially those who are relatively new to the market, store their cryptos in the exchange they buy them on. Newer investors haven’t been exposed to most of the worst exchange hacks that lost users millions of dollars in crypto. 

    Exchange security has increased tremendously since the devastating series of hacks in the first few years since Bitcoin launched. Most top trading platforms like the ones recommended above have great security that makes losing your funds to hacks extremely unlikely. 

    However, crypto exchanges are not the best storage solution. Personal wallets, either hardware or software, give you direct control over your cryptos. 

  3. Make your purchase.

    Now that your identity is verified, purchasing MANA is a breeze. The trading platforms we recommended above all support instant ACH deposits so you can start trading immediately. You may not be able to move your cryptos off of the platform until the deposit fully clears, however. 

    Once your funds are deposited, look for the trading pair with MANA you want to use, like MANA/USD. Set the price you would like to purchase MANA at and complete the transaction. If you have a personal wallet, you might want to transfer your cryptos to it as soon as possible to ensure its safety. 

Best Crypto Wallets For Decentraland

Best Hardware Wallet: Ledger

  • Ledger Hardware Wallet
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    Starts at $59
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    securely through Ledger Hardware Wallet's website
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Your funds are about as safe as possible when stored on a decent hardware wallet. These physical devices are more secure than software wallets or exchange wallets because your wallet’s info is never stored online. Ledger is the king of hardware wallets, with 2 fantastic models: the Ledger Nano S and Ledger Nano X. 

The Nano S is the simpler model and is perfect for any investor looking for a well-priced and incredibly secure wallet. The Nano X adds Bluetooth functionality and a larger touchscreen to make using the wallet seamless. 

Both devices have the same certified secure chip that generates, encrypts and stores your wallet’s information so no one but you can access it. Ledgers support more than 1000 cryptocurrencies such as Bitcoin, Ethereum, Ripple, Dogecoin and all ERC-20 tokens (including MANA). 

Best Software Wallet: Gemini

In order to get the best of both worlds, you can keep a majority of your portfolio on a hardware wallet and use a software wallet for day-to-day transactions. Software wallets are not as secure as their hardware counterparts, but they are often much easier to use, especially with DApps like Decentraland. 

  • Gemini Crypto
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    securely through Gemini Crypto's website
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One of the best software wallets available today is Gemini Wallet. It is available as an app for mobile devices on iOS and Android. Gemini has more functionality than most of its competitors. You can track asset prices and real-time market prices anytime, anywhere. The app makes it simple to set price alerts so you can act fast on price movements for individual assets. If you want to consistently increase your crypto holdings while averaging your buy in price, you can schedule recurring buys on bitcoin and other cryptocurrencies.

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The success of Decentraland will likely heavily depend on further updates to the game and whether it can continue to attract more users.

Current Crypto Prices

The cryptocurrency market is down from all-time highs again. Bitcoin and Ethereum led a massive rally starting in July that surprised many investors who thought the 2020-2021 bull run had already ended. If the rally continues at its current rate, it won’t be long before the top cryptos break through their previous all-time highs. 

However, the cryptocurrency market is incredibly volatile and no one can accurately predict its direction. We may get a general idea of the market’s direction soon if it makes a major move up or down, but until that happens, we will have to wait. 

Is Decentraland a Good Investment?

Decentraland is an extremely risky investment like most small altcoins. Its profit potential is immense, but so is its possible downside. If you had invested in the token at the beginning of 2021 at $0.08, you would have made a massive return on your investment. 

However, if you invested near the peak in May, you would be down significantly. This is the norm for volatile altcoins and investors must be aware of how risky they can be. Always weigh the risk and reward before making any investment decision.

Frequently Asked Questions

Questions & Answers

Q
What does Decentraland token (MANA) do?
A

MANA powers the Decentaland virtual reality platform. You can pay for in-game good and services as well as Decentraland land with it.

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