Research Team
Last Update 12/22/2021

Investment into the Web 3.0 metaverse sector has continued to rise since Facebook announced their rebrand to Meta in October 2021. While the metaverse is still in the early stages of growth, many aspects have the potential to revolutionize our digital lives (Grayscale Metaverse Report). As a result, the native tokens and virtual world real estate assets of leading crypto Metaverse economies have been booming, including Decentraland. 

Decentraland, one of the leading blockchain-based virtual worlds, is creating an open-world metaverse where users can earn MANA (the native token), to purchase LAND, a Non-Fungible Token (NFT) that divides Decentraland into virtual plots (Grayscale Decentraland Introduction). Similar to physical real estate, the real estate value of Decentraland’s ecosystem is created by interactions and exchanges between users across a number of business activities, including art galleries, offices, games & casinos, advertising, sponsored content, and music venues.

While the concept of virtual real estate may be difficult to reconcile at the moment, this could soon change. From the dawn of mankind until the internet became ubiquitous, humans have spent their entire lives in the physical world. In only a couple decades, the web has changed the way we experience shopping, socialization, entertainment, and more, allowing the technology sector to become the largest in the stock market today. While we have been using the web since the early 2000’s, ownership of value on the internet has only been possible since Bitcoin launched in 2009. Since then, the shift to Web 3.0 has brought many innovations, including the emerging trend of owning our online worlds through metaverse real estate. 

Real estate buyers – ranging from gaming companies to metaverse REITs and virtual land development companies – are increasingly turning to Decentraland as a frontier opportunity. These metaverse pioneers are building emerging market digital economies and seeking to profit from increased consumer adoption and business activity in the virtual world.

This increased interest in the Metaverse is driving a virtual real estate boom in Decentraland; in November 2021 a plot of virtual land sold for a new record of ~$2.4 million. The Decentraland real estate market and the MANA token are closely linked, and the increased interest in LAND is one component that fundamentally underpins the intrinsic value of MANA (Figure 8 & 9).

Decentraland Real Estate 

The Decentraland virtual world is made up of ~90,000 plots of 16m x 16m real estate NFTs (Figure 1). The value of LAND is based on its location in relation to other LAND plots, similar to the physical real estate market. In Decentraland, proximity to public areas such as Genesis Plaza or public roads have become a driver of value. As user traffic increases for a plot of LAND, the potential opportunities to monetize that plot through the sale of NFTs, advertisements, or other services also rises. 


  [1] Genesis City

Growth of MANA & LAND 

Over the past year, both the Decentraland token (MANA) and real estate (LAND) have seen a dramatic rise in value, as users increasingly turn to virtual worlds as economic hubs. Although the value for individual land can vary, the weekly average sale price of Decentraland NFTs (mostly land but includes other NFTs such as wearables) presents a good estimate for how real estate values have changed over time relative to the MANA token (Figure 2).


  [2] TradingView, Non Fungible (11/26/20 to 11/25/21, LAND may include non-land NTFs)  

While both Decentraland assets have performed well and have tracked each other closely over the past year, MANA has modestly outpaced LAND—with the weekly average price of the two rising by 4,947% and 4,173%, respectively (Figure 3). 


[3] Non Fungible, TradingView (Date: 11/26/20 to 11/25/21)

LAND Market Size 

Both MANA and LAND are scarce digital assets. The supply of LAND currently stands at 90,601 parcels, with ~50% of the plots being zoned as “private land,” which is owned by thousands of individuals and corporations (Figure 11), while the remaining are set aside as either “districts,” “roads,” or “plazas” – which are all for community use, such as concert venues, public town squares, and exploration areas (Figure 4). 


Land Type

Land Plots


Private Land



District Land



Roads Land



Plazas Land



Total Land Plots



  [4] NFT Plazas  

Comparing the market cap of the MANA token to the market cap of Decentraland real estate, the MANA token has not only outperformed the land, but it has also captured most of the digital economy’s market value – even though both have seen strong growth.

The market cap of MANA stands at ~$11.4 billion, which could be compared to either the Total LAND (Private, District, Road, & Plaza Land) at ~$1.8 billion or the Private LAND at ~$0.9 billion, estimated using the number of plots and the weekly average sale price (Figure 5).


[5] Non Fungible, Coinmetrics (Date: 11/26/20 to 11/25/21)

The virtual real estate market has seen impressive growth, but it remains only a tiny fraction of the total real estate market, which is one of the largest asset classes in the world today. As more of our lives are spent online, the virtual realm could dematerialize greater parts of the real estate market by capturing a value shift from the physical to digital world as our attention and social norms evolve. While the value of digital land in the Decentraland Metaverse has seen strong growth, the economy’s digital real estate value has the potential to grow materially relative to the physical market (Figure 6). 


  [6] Source: Non Fungible, Lendingtree, Federal Reserve, Fundstrat, Note: Metaverse total land includes Decentraland, Sandbox, Crypto Voxels, & Somnum Space; calculated as total land plots multiplied by weekly average NFT price as of 11/25/2021

Economic Activity 

The Decentraland real estate market is still small in relative terms, however, interest and sales activity have been growing rapidly. Secondary market NFT sales in Decentraland grew from $3.6 million in October 2021 to ~$20 million in November 2021. All-time secondary market sales of Decentraland NFTs have grown by ~2.5x over the past year to ~$100 million (Figure 7). 


[7]  Non Fungible (Date: 9/29/17 to 11/25/21)

MANA Value Capture 

The digital economy’s strong business activity growth is a contributing factor to the intrinsic value of the MANA token. Economic activity in Decentraland could range from LAND sales to avatar registrations, to wearable clothing sales, to other digital goods and services in the future.

When these NFT asset transactions take place within the Decentraland economy, the protocol charges a fee denominated in MANA that gets “burned” (i.e., removed from circulation), creating scarcity, and resulting in deflationary pressure on the token price (Figure 8). 


Decentraland Economy Activity

MANA Fee Burn Rate

Land sold on the Primary Auctions

100% of total sale price

Land sold on the Secondary Marketplace

2.5% of total sale price

Avatar / Registered Initial Name Sale

100 MANA – 100% of total sale price

Avatar / Registered Name Resale

2.5% of total sale price

Newly Minted Wearables Sale

100% of total sale price - 0% for prizes

Wearables Resale on Decentraland Marketplace

2.5% of total resale price

Wearables Resale on Opensea Marketplace

5% of total sale price

[8]  NFT Plazas

The economic effect is analogous to strong GDP growth increasing government tax revenue, leading to a budget surplus and allowing for the reduction of national debt, which in turn reduces the money supply.

At issuance, the MANA token supply was ~2.9 billion. Since launch, that supply has steadily decreased as economic activity has grown. The following chart shows the amount of MANA in supply against the MANA burned as fees. The large jumps in the amount of MANA burned correspond to the LAND sold at primary auctions – which burn the full price of the land sale as a MANA fee. The total dollar amount of MANA that has been burned to-date is ~$50 million. As a result, the supply of MANA has decreased to ~2.2 billion, as of December 2021 (Figure 9).


[9]  Coinmetrics (Date: 9/30/17 to 12/1/21)

Growth Opportunity 

Decentraland has seen impressive economic activity growth, however, it has barely penetrated its total addressable market opportunity. Global revenue from virtual worlds could grow from ~$180 billion in 2020 to ~$400 billion in 2025 (Figure 10). Over that time, monetization models are also expected to shift dramatically, with consumers spending less on purchasing premium games and spending more on in-game digital items that enhance gameplay or social status within these virtual worlds.

Decentraland’s digital economy, which has reached ~$100 million in total secondary market NFT sales (Figure: 7), is the next evolution of this monetization trend. Revenue models are shifting away from closed games where consumers pay game companies, to open metaverse economies, like Decentraland, where consumers transact on peer-to-peer secondary marketplaces. 


[10]  Ark Invest

This large and fast-growing market opportunity leaves ample room for Decentraland to benefit from the rising tide of Metaverse adoption. As interest in the metaverse continues to grow, we believe the virtual worlds that attract people for business and leisure activities will be the ones that capture the most value – for the same reasons that New York City is more valuable than any small town. 


[11]  Non Fungible (Date: 9/29/17 to 12/10/21), Note: Others estimated using all time active Metaverse wallets less Decentraland wallets, which doesn’t take user overlap into account

Decentraland was one of the first Web 3.0 metaverse economies to launch and remains one of the leading crypto virtual worlds today. That head start has helped the digital economy assemble one of the largest user bases within the Web 3.0 metaverse segment. Measured in terms of all-time active wallets, the Decentraland Metaverse has grown to ~20,000 users, which is nearly 40% of the ~50,000 total crypto metaverse users (Figure 11). As interest in the metaverse continues to build, Decentraland may see corresponding growth in its user base, which could have a positive impact on economic activity, real estate values, and, ultimately, the MANA token.

Important Disclosures & Other Information

All content is original and has been researched and produced by Grayscale Investments, LLC (“Grayscale”) unless otherwise stated herein. No part of this content may be reproduced in any form, or referred to in any other publication, without the express consent of Grayscale.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.

This content does not constitute an offer to sell or the solicitation of an offer to sell or buy any security in any jurisdiction where such an offer or solicitation would be illegal. There is not enough information contained in this content to make an investment decision and any information contained herein should not be used as a basis for this purpose. This content does not constitute a recommendation or take into account the particular investment objectives, financial situations, or needs of investors.

Investors are not to construe this content as legal, tax or investment advice, and should consult their own advisors concerning an investment in digital assets. The price and value of assets referred to in this content and the income from them may fluctuate. Past performance is not indicative of the future performance of any assets referred to herein. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.

Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on Grayscale’s views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements that are forward-looking by reason of context, the words “may, will, should, could, can, expects, plans, intends, anticipates, believes, estimates, predicts, potential, projected, or continue” and similar expressions identify forward-looking statements. Grayscale assumes no obligation to update any forward-looking statements contained herein and you should not place undue reliance on such statements, which speak only as of the date hereof. Although Grayscale has taken reasonable care to ensure that the information contained herein is accurate, no representation or warranty (including liability towards third parties), expressed or implied, is made by Grayscale as to its accuracy, reliability or completeness. You should not make any investment decisions based on these estimates and forward-looking statements.

Carefully consider each Product’s investment objectives, risk factors, fees and expenses before investing. This and other information can be found in each Product’s private placement memorandum, which may be obtained from Grayscale and, for each Product that is an SEC reporting company, the SEC’s website, or for each Product that reports under the OTC Markets Alternative Reporting Standards, the OTC Markets website.

Reports prepared in accordance with the OTC Markets Alternative Reporting Standards are not prepared in accordance with SEC requirements and may not contain all information that is useful for an informed investment decision. Read these documents carefully before investing.

Investments in the Products are speculative investments that involve high degrees of risk, including a partial or total loss of invested funds. Grayscale Products are not suitable for any investor that cannot afford loss of the entire investment. The shares of each Product are intended to reflect the price of the digital asset(s) held by such Product (based on digital asset(s) per share), less such Product’s expenses and other liabilities.

Because each Product does not currently operate a redemption program, there can be no assurance that the value of such Product’s shares will reflect the value of the assets held by such Product, less such Product’s expenses and other liabilities, and the shares of such Product, if traded on any secondary market, may trade at a substantial premium over, or a substantial discount to, the value of the assets held by such Product, less such Product’s expenses and other liabilities, and such Product may be unable to meet its investment objective.

The shares of each Product are not registered under the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (except for Products that are SEC reporting companies), the Investment Company Act of 1940, or any state securities laws. The Products are offered in private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act and are only available to accredited investors. As a result, the shares of each Product are restricted and subject to significant limitations on resales and transfers. Potential investors in any Product should carefully consider the long-term nature of an investment in that Product prior to making an investment decision. The shares of certain Products are also publicly quoted on OTC Markets and shares that have become unrestricted in accordance with the rules and regulations of the SEC may be bought and sold throughout the day through any brokerage account.

The Products are distributed by Genesis Global Trading, Inc. (Member FINRA/SIPC, MSRB Registered).

© 2021 Grayscale Investments, LLC. All rights reserved. The GRAYSCALE and GRAYSCALE INVESTMENTS logos, graphics, icons, trademarks, service marks and headers are registered and unregistered trademarks of Grayscale Investments, LLC in the United States.

Related content