Decentraland (MANA) Fundamental Analysis

Since the emerging crypto asset class is much like venture capital with liquidity, performing a quick market size analysis can provide insights into potential fundamental asset value.

What is Decentraland (MANA)?

Decentraland is a shared virtual world (i.e Metaverse). This virtual reality platform runs on the Ethereum blockchain and allows users to create, experience, and monetize content and applications within the metaverse. More simply put… imagine a virtual world where users; interact, buy/sell goods and services, own land, etc. The currency within this virtual world is MANA.

To create scarcity, Decentraland has a set size limit (only certain size land mass). Land is divided into 10m x 10m (30ft x 30ft) plots, and is available for sale.

Questions to Consider when Investing

  1. Is there a published whitepaper? 

Yes… positive.

  1. Is there a detailed development road map? 

Yes… positive.

  1. Does it use an open, public blockchain, and is the code published? 

Yes…positive.

     4.  How strong is the technology’s differentiator (Strong, Mediocre, Weak)?

Strong. Decentraland is the first open crypto economics powered virtual reality platform… positive.

      5.  How competitive is the industry the asset is entering (Strong, Mediocre, Weak)? 

Strong. Scaling solutions on the Ethereum network are still not solved and new competitors will enter the market if the concept takes off…negative.

Price Target:

Assuming:

  1. Decentraland (MANA) survives potential regulatory and technological hurdles.
  2. The Decentraland metaverse gains adoption.
  3. The Decentraland land mass remains approximately 17% of the land mass of Hong Kong.
  4. Decentraland achieves economic activity of 10% that of Hong Kong (land mass adjusted).
  5. MANA supply and inflation rates remain in line with prior guidance.
  6. A 30% discount rate is used to bring future price targets (3 years in this report) to today’s dollar values. Although 30% is significantly higher than the current risk free rate, crypto assets must be discounted significantly to account for risk.

We used Hong Kong GDP figures as a comparison for the potential economic activity we could see within 3 years in Decentraland. Hong Kong is a modern, advanced, metropolis. We see a Decentraland metaverse as a potential virtual Hong Kong with global avatars walking and interacting on its streets.

After starting with Hong Kong GDP we assign Decentraland a 10%, land mass adjusted, share of GDP. The next step was applying the MANA inflation calendar to arrive at the per unit MANA price targets.

decentraland mana fundamental analysis

Given the assumptions (above) the 3-year Decentraland (MANA) price target is given below:

decentraland mana fundamental analysis

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