ICO Review of Decentraland (MANA tokens on Ethereum blockchain)

Want to start by saying that I have high expectations about Virtual Reality in the next 5 years. I am sure that sooner or later many jobs will be done from home, by using virtual reality headsets and other needed equipment. Also, there is absolutely new possibilities when we talk about entertainment. Using virtual reality headsets, you can immerse yourself into almost real world and you can do amazing things not leaving the comfort of your own home.

I used the HTC Vive headset and I can tell you with 100% certainty that it will soon have huge impact on the entertainment industry. All those possibilities, man. But right now, there is one thing that stops VR from going mainstream. The main barriers of the VR industry are the following:

I. Resolution in VR headsets (even the most expensive headsets have those issues, you simply see pixels which crush the whole immersion process)

II. Price for high quality headsets ( but I think that the first problem is the most crucial one and is soon to be solved)

After VR headsets will become more comfortable, cheaper, and better we will experience Matrix-like situation when a lot of people will be lost to the artificial world of pleasures and sins. But that’s not the topic we will discuss here, let’s finally get to one of the hottest ICOs in August, Decentraland. The project is being done by famous blockchain entrepreneurs who are very enthusiastic about what they do.

I will not say much about the team except that they all certainly have enough experience to conduct ICO, the only problem I see here is the lack of experience in building games. The team has solid background. It consists of creators of Stremium, Proof of Existence, Bitcore, and OpenZeppelin (this company helps with smart contracts code).

The advisory board is strong and consists of Jake Brukhman, the founder of CoinFund, Wendell Davis, CCO at Golem, and Luis Cuende, CEO of Aragon.

District0x, Aragon, and Zeppelin Solutions are partners of this project.

Decentraland will create a virtual reality platform, where users will be the main owners, creators, and players. Basically, they create a Second Life-like world which will be decentralized and owned by users.

The project aims at solving centralization problems of platforms, which host gaming and other applications. As you know, different platforms ask for high fees to enter the market, they also have strict policies which don’t give a chance to many applications to enter the market. Decentraland wants to change this situation and invite everybody to their platform.

The market of VR will be a huge market with a lot of players. Many gaming companies will try to be the best at accommodating appearing VR customer base, and it gives a chance for Decentraland to cover this market early and be the best in it. I will cover the VR market volume on a different slide.

The whole concept is that this VR world is completely owned by users, and the content creation depends on users too. Of course, first of all the team will do their best to populate the world with interesting sites, events, and games. But the users are going to be the only creators at the end.

The team has already made a prototype. You can try it out simply by accessing an internet page of Decentraland and clicking on “Launch” button. Currently, the graphics are bad, textures are even worse, but it gives you some perspective on what they want to achieve in the end. Also, it shows that they are actually interested in creating something interesting, but they need funds to hire people with good gaming expertise and other professionals.

The main currency of the ecosystem will be MANA. There will be multiple ways to spend it inside the world, but the first thing you can do is to buy LAND parcel for 1000 MANA. This LAND inside Decentraland will belong only to you and you will be able to build whatever you want on it. Including casinos, social clubs, cinemas, and your little crib. The imagination is the limit. But we shouldn’t forget about technological limitations we will discuss later.

To make it operational, the project uses different decentralized technologies to achieve true decentralization. I’ll cover it on the Technology slide.

To make the working market inside the Decentraland, they will present you with different monetization methods.

Decentraland will tap into the Virtual Reality market, which has astonishing potential. And the projected volume of the market for the next 4 years is truly amazing. Let’s check this out.

Virtual Reality market is forecasted to grow from $5.2bln to $162bln from 2016-2020 according to IDC. Those are amazing numbers and I think that it is very possible that many forecasting agencies to fail at predicting. Maybe the next 3 years will show us even greater growth due to the appearance of new, cheap, and high-quality VR headsets. And maybe we need to wait 2-3 more years until the market actually gets needed equipment.

Right now, centralized game providers are the market leaders, and there is not much to add here.
Currently, Second life game is the main competitor with big audience and known brand. How long will this game stay market leader? Who knows.

Even though the market grows fast, it will be hard to compete with established market leaders, which will also want their share in VR market. And I am talking about giants like Facebook, Google, Activision Blizzard, and others.

The profit generation comes from appreciation of the MANA tokens due to the actual usage in the Decentraland VR world.
The more popular Decentraland VR world the bigger price of MANA tokens. Decentraland will have active marketplace where players will be able to exchange MANA tokens to digital assets inside this VR world.

MANA tokens will grow closer to important milestone dates. As you can see from this roadmap, the most important date Is 2018. That is when they plan to finalize their prototype for the market. I hope they will keep updating the VR world even after 2020.

Financially everything depends on whether Decentraland becomes successful. That’s pretty much it.

If digital goods inside Decentraland became valuable, it could positively impact the MANA token price. BTW, the project already made an agreement with districtox to trade its digital assets on this platform.

Exponential growth of VR sphere could also impact positively the price for MANA tokens.

Also, there are more than 2 thousand members in Slack channel of Decentraland, more than 2 thousand on twitter, 2 500 on Facebook, and finally 170 subscribers on reddit.

Decentraland is built using multiple distributed technologies to reach true decentralization of its VR world. But…

Decentraland technology choices could potentially seriously impact performance side of their VR world. But appearance of new solutions could solve the problems. And I really hope that they will be able to deal with the performance issues. Also, I am a big fan of graphics in the game, so I hope that they will be able to eventually deliver on the most important parts of their VR world, which include a lot of factors. But let’s now take a look at technologies used in the project.

Consensus layer is powered by Ethereum, it manages a ledger of ownership.

Land content layer uses decentralized technologies to manage storage system to distribute content to render the world. As I understood, they want the best solution, but currently they use Torrent for this. Later they will switch to IPFS or Filecoin.
Real time layer is responsible for communication between players. They will use P2P solutions to make it work.

To make payment as convenient and fast as possible, they plan on using different scalable solutions like Raiden network,
And identity system is planned to be built on uPort, Consensys project.

Crowdsale favors early contributors and will provide them with a bonus during ICO. Majority of tokens will be held by Decentraland. Let’s expand on it.

• ICO starts on 17th of August, 8 P.M. EST.
• Project will distribute small % of its tokens to investors ( 40%), it is capped ICO at 20 mln USD
• Early investors will be rewarded with 40% bonus on the first day of ICO
• Later MANA tokens will be used to buy LAND during Iron Age period
• Decentraland ecosystem has 8% inflation (decreases each year)
• 50% proceeds will be used in development, 20% research, 15% Marketing, 10% operations, 5% Legal

That brings us to the final part of my presentation. Advantages and disadvantages.

First advantages.

• Team certainly has experience in blockchain technologies. They are able to deliver on that part.

• There is already a working prototype which can be tested by anyone. A new vision for VR.

• VR market is soon to become the most important one in entertainment industry, better catch this train!

Disadvantages.

• There is certainly lack of experience in gaming industry in the team. It is very important to have that kind of expertise, so I hope they will hire only the best in that area after the initial coin offering.

• There is no financial strategy shown. I would like to know how exactly they are going to spend money.

• Finally, decentralized technologies are not that developed right now to handle games. But, I can see that changing pretty soon. Good luck to the team, I believe in you and in VR market!