Most of us think that NFTs are the empowerment of people coming together to create a strong community. As we see in history, we have never had a social organization across the borders, touching many countries as today. Non Fungible Tokens are a combination of identity and social organization with no politics, racial parameters, or rules established by someone else (a.k.a. Governments/politicians), and even inclusivity. No one will judge by the way you interact or even how you dress your avatar.
Every NFT holder can interpret their own meaning of the community they belong to, and the group has broadly coordinated goals, and that is how the roadmap is completed.
NFTs are a class of real-life solutions like ETH and Bitcoin, but a little bit looser and more abstract than the two mentioned earlier.
So, what with the metaverse? The metaverse brings a landscape for NFT holders and a platform to interact with the community virtually but in real-time. This is where the virtual lands come to play.
People are passionate about property rights…The famous saying “YOU HAVE TO INVEST ON REAL ESTATE” (not financial advice) comes from this idea. The feeling of ownership fits well with most people.
The goal of an NFT project is to ensure you have property rights in a digital asset, the same applies to digital real estate. You are not a serf on someone else’s property in the nonphysical world.
As we see the Metaverse landscaping keep growing, it might be a little bit confusing for people. We see centralized companies like Meta (previously Facebook) and Roblox pursuing this industry and some VCs.
In this series, we will introduce multiple leading decentralized platforms and how users can take profit from them. As part 1, let's start with Decentraland!
Decentraland
Decentraland is a decentralized virtual reality platform based on the ERC-20 network. The perfect analogy would be that Decentraland is the “Sims” of NFTs.
The platform is regulated by a DAO, so through the communication > proposals of the community > voting, the roadmap is scheduled and accomplished. Trello’s website offers a dynamic roadmap based on the DAO’s votation and proposals, and it is worth taking a look.
Token
$MANA is the platform’s token. This coin has some good utilities like: voting on the DAO proposals, buying digital items for your avatar, and buying land plots. You can also stake $MANA on Binance, Gemini, and Crypto.com.
Good things about Decentraland is that they are very transparent with their balance sheets and information is very clear on the website.
You can acquire $MANA through a CEX (Centralized Exchange) like Binance, FTX, Coinbase, among others. The other way around is with a DEX (Decentralized Exchange) of ERC - 20 tokens, like UniSwap or SushiSwap.
How to make money on Decentraland
Lands
Lands are a highly valuable digital item among the metaverse. Lately, land is also known as Virtual Real Estate. Decentraland currently has 90,601 plots of land of 16 x 16 meters [52 ft x 52 ft] size.
By buying 2+ lands you can create an Estate, so you can start creating a bigger and bigger environment.
When you own a land or an Estate, you can start leasing them. Some users create ads in their own land to give themselves exposure to potential lessors. After first contact and getting a deal, the tenant starts to create the environment for the landlord with the specs required by them for the event to take place. There are some websites that offer smart contracts to rent your properties:
Doing this gives you passive income without selling your properties. Most people rent their properties for galleries or fashion shows. Here is an example of a fashion show in Decentraland.
If you are looking to trade your land, here are some graphics obtained from NFTGo.io:
Holders & Traders shows how much people hold their lands. We can see the most active months were November-December 2021 and part of January 2022, due to the ATH (All Time High) of the NFT industry and the big exposure that Decentraland had in those months as it started to have some collaborations with multiple brands.
As we can see on Holder Trends, holders have been increasing over time, and some “whale wallets” have joined the project lately. Having whale wallets on the project might be a good thing because high value investors are backing up the project.
Whale wallets are wallets that hold $1,000,000+ in digital assets.
Holding Amount Distribution & Holding Period Distribution shows how much investors are holding their lands. 80.4% of holders have been holding them for more than one year, which means that most people are not looking for a quick flip. This is interesting because, in the eyes of the investors, this is a long play. So, if you are looking to acquire land, you probably should go for the long term and not for a quick flip.
Trading
The other way to have some stream of revenue is from trading $MANA. Probably you should go and learn technical analysis to perform this and wait for hot news.
However, trading $MANA is not the only thing you can do. Since avatar’s items are also NFTs, you could trade wearables as well. Market Cap & Volume shows the volume in a 1-year range. Market Cap has increased over time because there are new wearable items, so because of it, Market Cap has increased. On the other side, the volume has been maintained steady.
As the Holding Period Distribution shows, most holders hold their assets for a year or more. If you are looking for a quick flip, you might not get the full profit potential of the item. The best way to go is holding it for the long term.
Content creators
The good thing about Decentraland is that they offer 2 kinds of Builder tools for creators, which are:
- The Builder: It is the best “starter pack” to get into the content creator side. This tool keeps things as simple as possible, pure creativity with a simple drag and drop editor. There are a lot of default items to work with.
- The Decentraland SDK: This tool is for advanced devs with skills in coding. Here, you will need to write your code to create your own scene. Because of this, imagination is the limit.
It is worth mentioning that you can use other 3rd party modeling tools to create your environment.
Once you choose which tools you want to use, here are some ways to make revenue as a creator:
- Sell digital items: Clothes, and accessories for your avatar. Publication fees at a flat cost of $500 (paid in $MANA) each.
- Build mini-games with wearable items to sell as souvenirs!
Metrics to measure how valuable a plot is
Looking at the map and selecting a land to purchase might be a little bit confusing. There are some metrics to take into consideration when you are buying a plot:
- Main avenues or secondary streets.
- If it is close to a Genesis Plaza (green boxes), you can see the example on the Land Map.
- Google trends.
Google trends are a good measure to follow the people’s hype related to the project. If we compare Holders Trends vs Google Trends, we will see some similarities in the interest of people and the volume of buyers and sellers.
Note: The above information is for informational purposes only. Investing in digital assets such as NFTs and cryptocurrency brings a high degree of risk. Please consult with a financial advisor before making any investment decisions. NFTGo.io does not provide financial advice and is not responsible for any losses from investing in digital assets.