In this newsletter, we are profiling Decentraland [MANA]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
Games and crypto tokens would seem like a perfect marriage until you add government taxation into the mix. There are several countries that tax digital assets on every traded event. Such a buzz kill. Where is crypto-gaming going to be in the next few years? Decentraland is a great project to watch in this space as they have several great things going for it with NFTs and a DAO for governance.
Decentraland launched in 2017 with a successful 25 million dollar ICO. The creators, an Argentina-based team, made a virtual reality platform where users can buy and sell virtual goods, services and property. All transactions are done with the MANA ERC20 token, which resides on the Ethereum blockchain. MANA is burned, or spent, in exchange for LAND parcels.
When launched, there was an original supply of a little over 2.8 billion MANA. With burning, the current total supply is around 2.1 billion. MANA was designed to inflate at 8 percent in the first year, decreasing gradually over time. This feature is currently disabled, as per the Decentraland glossary, there are no plans to initiate this inflation "until necessary".
Governance is done via community voting at https://governance.decentraland.io/, and voting power is determined by wrapped MANA (tokens which have been locked up in the governance contract), the number of parcels owned, and the number of estates owned.
Anyone with a PC or Mac that can run the Chrome or Firefox browser and has web graphical acceleration enabled can enter the virtual world by going to https://play.decentraland.org/. Make sure to have the Metamask plugin installed so you can save your avatar settings, location, and any owned items or properties. Be careful not ever to lose access to your Metamask wallet, as that means losing all your Decentraland assets as well. To buy in-world items, avatar accessories, and land parcels, visit https://market.decentraland.org/. To build virtual stuff, visit https://builder.decentraland.org/.
A LAND parcel is a 16 by 16-meter virtual piece of land within Decentraland. LAND is an NFT asset on the blockchain. An estate is an association of two or more directly adjacent parcels of LAND. A “scene” within Decentraland comprises the 3D objects, textures, and audio content rendered on a parcel or estate.
The visual, audio and three-dimensional content of Decentraland is stored on a network of content servers. Anyone can submit a server to join this network, but it must be voted in by the community, which is handled by a Decentralized Autonomous Organization (DAO). When you visit Decentraland, the content needed to render your location is pulled from the content servers.
You get to decide whether you will charge other players to access your content and how you will implement said charges. Decentraland is in no way involved in monetizing your content and does not guarantee any return, profit or income. The success of the platform depends entirely on the efforts of the users and community involvement.
The only direct competitors to Decentraland at this time are The Sandbox (SAND) and possibly OVRLand (OVR). For non-blockchain-based competition, you may know of or remember the game SecondLife which was popular over a decade ago. All these types of virtual lands, regardless of the underlying technology, have the distinct problem of having a lot of initial excitement and involvement, which tends to dwindle quickly if nobody continues to promote usage. Unfortunately, going into Decentraland today looks a lot the same as SecondLife, with vast spaces containing half-finished content and no other players to be found.
Can the community continue to push this new and innovative virtual reality concept to make it thrive? Visit the land yourself and see if you think it has potential.
MANA has had a couple of long-ranging patterns; from 2018 to the first half of 2019, it ranged slightly under 1000 sats and to 2000 with a couple of massive wicks up to 4000 sats. Then for 96 weeks from 2019-2021, it stayed below 1000 for the most part, with a low of 216 sats January 2021. More recently, in March, it pushed to a new ranging level possibly. In between 1700-2500, there is a 50% spread between the support and resistance. Will it stay in this new range as it has in the previous two cycles for an extended period?
For more, check out this 19-minute video, Decentraland (MANA): One CRAZY NFT Project!! By Coin Bureau.
The Grayscale fund inception date for MANA was February 26, 2021; since the launch, the value has been up as much as 455% against BTC.
One of the first securities solely invested in and deriving value from the price of MANA. Grayscale Decentraland Trust is solely and passively invested in MANA, enabling investors to gain exposure to MANA in the form of a security while avoiding the challenges of buying, storing, and safekeeping MANA directly.
Bitcoin Trend Lines
Bitcoin has formed a falling wedge pattern with bias to break to the upside. The strong 4h uptrend remains strong as the price continues to find resistance at 20 blue EMA. A break of 20 EMA at 36800 will very likely push the price at least to 50 EMA at 40500. The falling wedge is known as a trend changing pattern when it comes from a downward move.
The Volume Moving Average is a basic technical indicator representing the average volume over a specified period of time. The D VMA200 is a very good indicator for the main levels of BTC imo. We also know this levels from the Bitcoin stock to flow model.
Bitcoin stopped exactly at the VMA200, as in 2018. But this time it's different. We are in an early stage after halving. What does that mean? The VMA can be understood as an extremely strong support line, continues to indicate an uptrend. One thing is certain, we will now see a strong pullback.
What might the final period look like now?
I see here a course as in 2019. That would mean the price of today would either increase by a factor of ten, to fall back after to the stock flow level of 115k.
HINT: This is one of the best charts i know. It is from @WyckoffMode (https://www.tradingview.com/u/WyckoffMode/). Thx to him.
The two graphs below show the continued growth of users into the bitcoin network even through this sharp correction we are in.
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 251% since October 1st, 2020 but down from 314% last week. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week Bitcoin has been ranging between $30,000 and $45,800 USD in value. From all-time highs of $64,850 down to $30,000 this past week, Bitcoin lost about 53% value. It has since bounced up 25%.
FUND 3 started on November 16, 2020, with $1000 USD in value and invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has gained 114% since the start. The USD fund value is up 387% since the start but down from last week when it reached a 590% gain. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is up only 1% against BTC. ETH is up 130% against BTC since the start. ADA has a gain of 530% against BTC and 1317% to USD. ADA continues to be the best investment of all the coins in this portfolio section, though all are down from last week.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT has a gain of 74% against BTC since the start; LINK is up 11%, but the same as last week, WAVES is up 113%, XMR is up 47%. Overall, against BTC, the fund is up 61% and 11% against USD. All the coins are down against BTC and USD. The whole crypto market had a massive 50-60% correction over the last week.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
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Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.