Decentraland LAND – What drives long term value

90,000 non-fungible LAND tokens constitute the Decentraland Metaverse.  Each LAND corresponds to a 16m x 16m plot of virtual space upon which developers can build anything they wish – gamesbusinessesgalleries, and more. Two auctions in MANA, Decentraland’s ERC20 governance token, distributed LAND to the community, and a hard cap on the supply of LAND creates digital scarcity, welcoming price speculation. 

According to, this month $647,527.55 USD was spent on 535 LAND parcels, with the average LAND price being $1,210.33 USD.  Even though each parcel of LAND is identical in shape and size, the record for a single Decentraland land parcel sale is over $150,000 USD and the minimum price is less than $200 USD.  So what makes one LAND worth 750x more than another? 

Location, location, location

The market has valued LAND purely based on location.  Proximity to one of the Genesis Plazas (a main public spawn area) or a public road yields a considerable premium from speculators – all for the same virtual 256 square meters.  Why does the market think location matters so much?

It all stems from expected user traffic. The market believes if a parcel is closer to a road or a Genesis Plaza, it will get more user traffic, which would in turn enable that LAND owner to monetize more easily through advertisements, selling NFTs, providing a business or service, or offering a game.

This notion of real estate valued largely on location has been carried over from the real world into the virtual. While it does stand true to a certain extent, we must remember there are things possible in Decentraland that are simply not possible in the real world; hence, virtual land deserves a different valuation algorithm. Within seconds, Decentraland users can teleport anywhere they want, anytime they want by typing coordinates into the URL or chat box.  Despite roadside parcels having more ideal aesthetics due to their simple, straight border with a public area, all parcels are placed on a fairly even playing field in terms of accessibility through a URL link.

From various experiences documented by bloggers reviewing Decentraland for the first time last week, there was little to no exploring done on foot.  Most people experienced different scenes by teleporting from one to another. Moreover, you would seldom run into anyone on any of the roads or in any of the Genesis Plazas.  Users were near completely confined to scenes on private or district LAND.  Anticipating traffic purely from proximity to a Genesis Plaza or road is largely misguided as the roads are rarely used for their original and real world purpose.  Transportation via teleportation is much more efficient in a virtual world. 

Content, content, content

Once we understand that traffic is funneled through instant teleportation instead of walking on roads, it becomes apparent that the largest attraction of traffic is content – content that not only attracts users initially, but more importantly has replay value indefinitely. Many of the bloggers’ reviews of Decentraland mentioned above comment on how they were intrigued visiting Decentraland, but had no pressing need to return:  

“I don’t think I’ll go back to Decentraland anytime soon. But I’ll be watching and waiting to see if people hitch their virtual wagons and begin to roll in.”

-Michael McSweeney, TheBlockCrypto

This article goes into detail how many of the scenes in Decentraland so far are interesting to visit once, but not again.  We received very positive feedback from the community in regards to our roulette demo we launched publicly in Chateau Satoshi [-76, 77] last week because it was some of the most interactive and aesthetic content deployed:  

It will be the engaging multiplayer content that brings in repeat users, and will yield much higher valuations for the LAND it’s built on, as well as the LAND in its proximity.  The draw of Decentraland will be around it serving as a social network product where users play games as an excuse to socialize with new friends and existing friends from anywhere in the world.  After hanging out in Chateau Satoshi for a few minutes, I was able to meet a new friend and get some feedback on our games:

Value follows content

However, even after establishing good content on LAND, a developer could “pack up their bags” from one area of the map, liquidate their LAND, acquire some in another area and port over their content with ease – and the users and value creation would follow.  Hence, it is logical that the real catalyst for value creation in Decentraland lies entirely in the content.

The next wave of value creation within the Decentraland ecosystem is not going to be made flipping unpopulated LAND – in fact, unpopulated LAND price distribution will largely trend toward the mean. Instead, considerable value will be created by developing content that brings back return users and generates revenue.  An aesthetic scene with several engaging, multiplayer games that generate passive revenue will 50-100x the value of any LAND on the map. 

Decentral Games offers fully passive Decentraland ventures purchasable through Flamingos NFTs (in partnership with Vegas City), and provides custom developed, fully managed and legally compliant casino services.  Join our discord to join the discussion.

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