Twitter user @0x_shake, who identified himself as the founder of the Solana-based Cyber Samurai NFT project, noted that despite a $1.2 billion valuation, Decentraland has just 30 daily active users (DAUs).
Decentraland ( $MANA ) has 30 Daily Active Users
and a $1.2 Billion Market Cap pic.twitter.com/u4MBNsWvwk
— SHAKE (@0x_shake) October 6, 2022
The data was pulled from DappRadar but is under scrutiny given the low number of DAUs. An alternative data source showed a discrepancy in the data, but the amount of DAUs per the alternative data source was still in the hundreds.
Nonetheless, the finding has reignited several discussion points, including metaverse tokens (and cryptocurrency in general) being a speculative pursuit, the pointlessness of market cap valuations, and the lack of interest in the metaverse.
Decentraland (MANA) is caught in a price slump.
Decentraland (MANA) is a virtual world platform on Ethereum enabling users to create, experience, and monetize content and applications. Its two-day-long Initial Coin Offering (ICO) ended on August 19, 2017, raising $24.14 million.
The project prides itself on being “owned by its users,” which is achieved through a Decentralized Autonomous Organization (DAO) that allows users to vote on the platform’s future direction.
“The first fully decentralized world, Decentraland is controlled via the DAO, which owns the most important smart contracts and assets of Decentraland. Via the DAO, you decide and vote on how the world works.”
Decentraland operates using MANA, an ERC-20 token giving the right to vote, and LAND, an ERC-721 (non-fungible) token. MANA is burned to acquire LAND. In turn, LAND is used to pay for various things in the virtual world, including avatars, wearables, and names.
But buying virtual land requires Ethereum or MANA and is purchasable directly from the Decentraland Marketplace or OpenSea.
Per CryptoSlate data, MANA’s 24-hour volume came in at $121 million, the current market cap is $1.31 billion, and the token is down 9% year-to-date and 88% down from its all-time high of $5.85, achieved in November 2021.
Even before the Terra UST implosion, the price of MANA was on a sharp downtrend. Since late August, the token has settled into a narrow trading band, with the $0.68 level acting as support.
Source: MANAUSD on TradingView.com
Is DappRadar accurate?
Commenting on the low number of Decentraland DAUs, Coindesk reporter Sam Reynolds said DaapRadar data counts the number of daily users interacting with smart contracts on the platform.
If so, this would imply DAUs are underestimated, as users may be actively “playing” in Decentraland yet not triggering smart contract obligations, such as trading avatar wearables. Even so, the DAU figure per DaapRadar is extremely low.
Data from dapp.com explicitly states its data on users refers to “the number of wallets that had interacted with a dapp’s smart contracts.”
The chart below shows an approximate median baseline of 600 users since July 8. Users on October 5 came in at just 312.
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Author: Samuel Wan