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