Analysis of Parcel Sales on Decentraland - MetaCat - Medium
0xE069
September 10th, 2022

*Author: @dawnx666 Translation: *@C_Chyn

Metaverse is currently one of the hottest words. It’s not only ranked number 1 in 2021’s top ten popular terms, but also mentioned in People’s Daily, China’s most authoritative governmental newspaper, on Dec 9 in relation to its parcel market. This article will look into Decentraland, one of the most mentioned metaverse platforms. Let’s see how it’s doing in terms of total sales, transaction frequency, and price.

Defining Parcels on Decentraland

Decentraland has two forms of parcels: land and estate.

Land

Lands are the basic unit of parcel, standardized into 16m by 16m in measurement with height of 20m. Decentraland has 92,598 lands in total, but 43,689 can be bought and sold. The rest — blocks, roads, and plazas — cannot be bought and sold.

Estate

Estates are formed by adjacent lands that cannot be separated by roads, plazas, or any other land. Each estate can be turned back into separate lands. Currently, there are 2,265 estates. 42% of them, numbering 944, have been sold. Among the sold estates, the smallest has only 1 land, and the largest has 259. Most of the estates — 87.08% to be specific — has 10 or less lands.

Height

Construction height is both highly valued and highly regulated in Decentraland. Every land is allowed construction height of 20m, but the estates have higher heights based on the number of lands comprising the estate. In specific, if there is n lands within the estate, then its height will be 20m × log2(n+1). It is possible that many estates have not been sold because buyers want to aim for even greater height by combining even more lands.

The table below shows the height for estates based on number of lands.

Total Sales

Since the beginning

Decentraland began selling virtual parcel on October 2018. On Dec 10, 2021, the cumulate total sales is US$ 74.93 million, consisting of US$ 36.27 mil for lands and US$ 38.65 million for estates. The cumulative total is 2.6 times of the CryotoVoxels’s total sales US$ 28.19 million.

Annual

Total sales saw moderate increase from 2018 to 2020. **However, totals sales from each of those three years is less than 5% of the cumulative total. In other words, the vast majority of the sales happened since 2021. 87.47% of cumulative total sales happened during 2021, and 52.12% happened during Quarter 4 of 2021 (up to Dec 10, 2021). **The explosive growth is probably driven by overwhelming news coverage and public attention.

Monthly

The following chart shows historical monthly parcel sales. The trend was relatively smooth before 2021. There was a dramatic increase in November 2021, reaching US$ 21.99 million in one single month. Furthermore, in the first 10 days of December 2021, there was sales of US$ 12,59 million. If the trend continues, December 2021 will refresh the sales record.

Number of Sales

Among the 43,689 tradable lands, 11,401 (including lands that are part of estates) has been sold up to Dec 10, 2021. In other words, 25% of tradable lands has been sold once or more, while the remainder of 75% has never been sold.

Land and Estate, Respectively

Here is monthly number of sales for lands and estates. We can see that there is clearly volatility. A large number of parcels have been sold on December 2018, February 2020, and March 2021. In November 2021, a record breaking 565 lands have been sold, in addition to 65 estates, the second highest number in history.

Land and Estate, Combined

Because each estate consists of multiple lands, we can combine the number of lands traded by adding up the number of lands included in each sold estate. **We find that the historical maximum — 1,141 — was reached in November 2021. **The number of total lands sold was higher than that on CryptoVoxels in several months.

Parcel Price

Average Price

Because there are different number of lands included in each estate, the average estate price is misleading. Therefore, we computes the average land prize and the average per-land estate price. We found the two moving closely together. The price was mostly stable before 2020, began to grow in 2021, and finally reaching explosive growth in Q4 2021. Average land price has reached US$ 22,435 in December 2021.

We’ve also discovered that average price in Decentraland moved very closely to the average price in CryptoVoxels. However, Decentraland saw more dramatic growth in Q4 2021, **to around double the average price on CryptoVoxels **(US$ ~16,500 in secondary market and US$ ~11,000 in primary market).

Leader’s Board

Estates

Because estates can contain multiple lands, so the top 5 estates in terms of transaction price is also the top 5 parcels. Except for №4, which was sold in June 2021, the rest were all sold in November or December 2021. On December 10, the day before the writing of this article, VentureEstates was sold for 300,000 MANA (approximately US$ 1.03 million), making it the third most valuable transaction in history.

Because the number of lands included in each estates varies considerably, the per-land price also varies considerably even for the five biggest transactions. The Decentraland #4247 estate, the fourth in ranking, only had a per-land price of US$ 3,462. The very high price of the estate was due to the large number (actually the largest on Decentraland up to December 10, 2021) of 259 included lands. №3 on the top 5 list, VentureEstates, which was to the east of Genesis Plaza, has only 14 lands, achieving a per-land price of US$ 73,000.

Lands

As we might expect retail prices to be higher than wholesales, the average price of lands far exceeds the average per-land price of estates. Moreover, the closer the land is to the Genesis Plaza, the higher priced it is.

The most expensive land in history was sold for US$ 420,000. Even the fifth most expensive was sold by US$ 93,000. In contrast, the highest ever per-land estate price was US$ 73,000.

Here’s a closer look at the expensive parcels close to the Genesis Plaza. Estate #4313 (per-land price of US$ 73,000) was to the east of Genesis Plaza. Two lands immediately to the north and west of Genesis Plaza was sold for US$ 420,000 and US$ 220,000 respectively, filling the top 2 spots on the most expensive lands. Number 3, priced at US$ 150,000, was also close to the Genesis Plaza.** All of the three most expensive lands were bought by one same owner.**

Another interesting fact was that Estate #4313 (with 14 lands and a per-land price of US$ 73,000) and the third most expensive land (at US$ 150,000) was right next to each other, in the red box to the east of Genesis Plaza on the map. They were sold on the same day for very different price, suggesting significant difference between land sales and estate sales.

All analyses above show the significantly increased attention to metaverse in 2021, especially Q4, leading to dramatic growth in sales measured in all dimensions.

For a new technology or a new field, overwhelming attention from big companies and news organizations can be a double-edged sword. On one hand, nascent industry might be prone to bubbles. On the other hand, more people might be drawn to the new field. Hopefully, more people can rationally treat the new field with a focus on practical use instead of prices.

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