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Decentraland Lords



[0] Auction Pricing of Location & Scarcity

[0A] — Auction 1

Given that world building is a key part of the Decentraland experience, I wanted to test out whether buyers took into consideration the “hot-spot” location proximity as a motivating factor. Let’s assume that landmarks (the roads, districts, and the genesis block) might serve as these points-of-interest. From the smart contract metadata, we can filter the price paid for parcels by their distance to the different classes of landmarks.

  • Filter parcels by distance to landmark type (road, genesis, district).

If proximity to landmarks was considered a driving factor, we would expect to see higher price paid for closer proximity. In other words, the higher the ratio, the less median or average $USD paid. We would expect a decreasing function to see a positive relationship between price paid for proximity. From Auction 1, we can eye-ball the linear trendlines for higher signal.

[0B] — Auction 2

If we were to run the same analysis for Auction 2, there is almost no relation between the location and price for all three landmarks. Yet, we see that the prices paid in Auction 2 versus Auction 1 are consistently higher for all location parameters across the landmarks. One reason could be the perceived scarcity of $LAND assets; another reason could be the project’s timing and execution risk priced into the assets (a full year of development and market activity).

[1] Marketplace Pricing of Location & Scarcity

While most of auctioned parcels (~90%) have not touched the marketplace, we can look at the marketplace to observe emergent behavior of the property assets values. Specifically, the buyer’s behavior might inform an assumption of his/her’s expectation of land value features.

We can cut this metadata in two ways:

  • Filter traded parcels by # of times traded on the marketplace (turnover).

[1A] Turnover

One take-away from observing the turnover behavior is that $LAND parcels purchased on the secondary marketplace tended to be clustered. We also observe that parcels that were traded with high turnover often were within these cluster proximities.

Turnover Rate of $LAND Parcels

[1B]: Pricing Multiples

From the pricing filter, we can observe that the highest priced multiples (10x and above auction price) belonged to parcels that had relatively low turnover. This could imply that whales (or $LAND lords) perceived these parcels to be underpriced and followed a uniform pricing to inform their bids.

Pricing Multiples for $LAND Parcels

[1C]: Location

If we overlay the Decentraland atlas, we begin to see that the clusters form near the edges of landmarks. This might belie the purchaser’s expectation, from a UX perspective, that a user might begin by exploring the landmarks, and then venture into adjacent $LAND neighborhoods/parcels.

Turnover on Atlas
Pricing Multiple on Atlas

[2] Estate Pricing of Location & Scarcity

Estates refer to $LAND parcels that are adjacent to each other and aggregated as a single collection. The idea is that owning or building on an estate is like owning a small neighborhood — allowing the ability to create city-like experiences. Not surprisingly, the value of estates exhibit a positive linear relationship to its size.

$USD vs Estate Size

What about the marginal value of additional $LAND to an estate? Not so much…

  • Estate Price: Filter estates by size and calculate average price per parcel.

[2A]: $LAND Flipping

One early hypothesis before the analysis was that buyers would purchase adjacent $LAND parcels, aggregate them into estates, and then sell the estate. Interestingly, the data below shows that this behavior is true for market participants in the auction. We see that most estates sold were not comprised of parcels that were bought on the marketplace, implying that buyers bought these parcels $LAND originally in the primary, then flipped them as estates once the feature became available.

Estates vs $LAND Turnover
Estates vs $LAND Pricing Multiples

Although only a few estates are comprised of $LAND assets purchased on the secondary markets, Section [1B] may hint that buyers have formed estates that have not been sold in the secondary markets yet. It could be that these estate owners are waiting for the market to react to actual construction and building of these interactive environments before selling the $LAND estates.

[2B]: Estate Free Riding

In the estate diagrams, we see that there are many instances of individual parcels bought adjacent to estates. Although a more rigorous timeline analysis is required to dive deeper, it is likely valuable to own $LAND next to an estate, similar to the logic of sitting adjacent to a landmark.

The market behavior shown in this analysis assumes some expectation from the $LAND owners about the future usage and utility of their parcels (similar to many public token projects). The uniqueness of the Decentraland analysis is the attempt to understand NFT feature-specific variables that might drive different valuation characteristics from other fungible crypto assets. At a high-level these features boil down to proximity and size.

Decentraland is meant to be an interactive experience. With the builder tools imminent to launch, it will be interesting to track how $LAND owners will actually make their assets productive (building, leasing, buying adjacent, selling).We may see over time whether these land owners used their land productively or simply waited for favorable speculation. The findings could inform whether the distribution of $LAND via auction went to those who could most efficiently make use of the land (and thus bring utility and value to Decentraland), rather than rent-seekers, speculators or wealth-parkers.

As in most crypto use-cases, while enforceability of scarcity is strongly guaranteed, the parameters of scarcity are not perpetually fixed. In the case of $LAND, unlike real world estates, virtual world scarcity is not bounded by physics. Decentraland is an attempt to iterate on this idea. This may change over time via the usage of $MANA (largely ignored in this analysis) as a governance token for the Decentraland economy, which may eventually be used to vote on proposals related to scarcity and utility such as increasing the size of the map or the dimensions of parcels (re: the conundrum of governance…)

In virtual worlds we are collectively building an entertainment society in a vacuum minus the long-standing social and economic driving forces that create environments like NYC. Yet, we are all participating in the generation-long experimental phase of new incentives and environments, and so though Decentraland will take time to build as its own, we can at least track the utility in real-time. How long until my Decentraland estate gets gentrified?

All data was sourced via the $LAND smart contracts and on 2019–02–28.



Bitcoin dominance is an irrelevant metric unless…



The volatile cryptocurrency market has given way to multiple metrics for the market observers to analyze and predict what’s coming next. One such metric has been Bitcoin dominance, but as per Su Zhu, it should not be relevant to you unless you are a billionaire.

How so?

The CEO of Three Arrows Capital opined this after noticing the trend of the newcomers avoiding Bitcoin and Ethereum and opting for risky crypto tokens. When the largest digital asset was stuck in a wider correction period, altcoins like Dogecoin [DOGE] grabbed much attention. This was possible due to the hype created by Tesla CEO or, self-proclaimed “doge-father,” Elon Musk and the Doge community.

However, understanding the newcomers’ enthusiasm Zhu opined that if he were to bet on projects now, he would choose Solana and Avalanche.

Despite the popularity of altcoins, the exec remained bullish on Bitcoin and Ethereum as he expected, the former to flip gold’s market cap, and the latter to eventually hit a value above $25,000. Bold predictions, but nothing we haven’t heard before.

However, newcomers were more bothered about the dominance metric but as data suggested, Bitcoin dominance has recently been falling. The dominance was hit earlier but recovered to form a peak at 49.25% on 30th July. But given the correction phase that followed, the dominance of BTC fell and was last noted to be at 40% on 10th September.

It is interesting to note that despite plenty of adoption related news such as that of El Salvador, coming in over the past few weeks, it looks like the dominance has remained unaffected by it.

Source: CoinMarketCap

Twitter user and crypto enthusiast, @HsakaTrades also noted that Bitcoin dominance was not a relevant metric for anyone who has a “sub mid 9fig portfolio]. Agreeing with Hasaka, Zhu added,

“To clarify, if you’re holding for 5+ yrs, you shouldn’t be thinking about btc dominance in the first place. And obv btc and eth have a strong place in that portfolio.

If you’re allocating actively atm, and think debating btc v eth v alts is a good framework, you’re ngmi.”

While this advice could stand true for experiences, long-term trader interested in making money, but not the ones looking out to invest in tech. This was especially highlighted in the comments wherein the crypto users were upset about the CEO’s Solana [SOL] recommendation that recently witnessed an outage.

Nevertheless, the trading advice and strategies differd from trader to trader and Zhu’s opinion to not focus on the BTC dominance, prebably stemmed from a hodlers perspective. While interesting projects were now erupting in the crypto space, it looks like Bitcoin’s dominance, not only in terms of price, but as a crypto project could be challenge.

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Millions of Dollars Raised Through Solana’s DeFi Projects

Millions of Dollars Raised Through Solana's DeFi Projects

PAI, an algorithmic stablecoin, backs Parrot Protocol. Grape Protocol was the primary source of the downtime. Solana has been up

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  • PAI, an algorithmic stablecoin, backs Parrot Protocol.
  • Grape Protocol was the primary source of the downtime.

Solana has been up nearly 3200% since August. Investors’ interest in Ethereum rival systems featuring DeFi, NFT, and smart contract services has risen dramatically.

The software applications that simulate legal contracts are smart contracts. Once housed on a blockchain network, the software application will run automatically without human intervention.

This month, Solana’s DeFi initiatives raised millions of dollars. This is another proof of Solana’s potential to compete with Ethereum. Currently, Ethereum has the most DeFi and NFT projects.

Bots raced to invest in a token sale for Grape Protocol over flooded the blockchain, causing Solana to collapse for 17 hours on Tuesday. Let us take a look at the few IDO that helped raise millions.

Grape Protocol

Grape Protocol, the primary source of the downtime, managed to raise just $600,000 on Raydium’s “Acceleraytor.”

Tokenized communities may use Grape Network to connect to platforms like Discord, Telegram, and soon twitter to collaborate over Solana and reward members with crypto.

Parrot Protocol

Parrot Protocol is based on Solana. Investors in the Initial DEX offering included Sino Global Capital, Alameda Research, and QTUM VC. Moreover, to put it simply, Parrot is a non-custodial lending platform and decentralized exchange.

PAI, an algorithmic stablecoin, backs Parrot. Furthermore, Parrot offered a governance token called PRT in its IDO. Thus, allowing investors to vote on the protocol’s operation and farm yields on Solana without affecting other Layer 1 blockchains.

Solana’s failure impacted Parrot’s IDO, but it was resolved by Sept. 16. Moreover, the team said it would start working on PRT staking, NFTs, and adjustable interest rates in “Letter from the Parrot.”

Several Solana initiatives will be launched in the next day’s/weeks. Examples include Solanium, Boca Chica, and Solstarter. On Solanium, whitelisted users may buy MatrixETF.

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Cosmos (ATOM) Lead Market-Wide Rally

Cosmos (ATOM) Lead Market-Wide Rally

Cosmos’ creators call it an “internet of blockchains.” ATOM also launched a bridge to Ethereum at the end of August.

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  • Cosmos’ creators call it an “internet of blockchains.”
  • ATOM also launched a bridge to Ethereum at the end of August.

Cosmos (ATOM) blew up 10.74 percent overnight to establish a new price of $39.58, according to CoinMarketCap. It surpassed $40 yesterday, reaching $40.76. Despite today’s minor decline, Cosmos’ price was still ten dollars more than seven days ago, and twenty dollars higher than this time last month.

Its creators call it an “internet of blockchains.” It’s an interoperability network that allows various blockchains to connect, exchange data, and interact with one another.

In short, Cosmos claims to address some of the “hardest problems” in the blockchain sector. It seeks to provide an alternative to “slow, costly, unscalable, and ecologically harmful” proof-of-work protocols like Bitcoin by connecting blockchains. On August 18, Cosmos rose 25% from $15 to $20 after the introduction of Emeris, a cross-chain DeFi interface.

It also launched a bridge to Ethereum at the end of August. The inter-blockchain communication protocol (IBC) allowed trade across the Cosmos and Ethereum networks for the first time, along with the integration of Sifchain.

Cosmos Might Soon Over Take FTX Token

Cosmos is “Blockchain 3.0” — thus, as previously said, ease of usage is a significant objective. To this aim, the Cosmos SDK emphasizes modularity. This enables a network to be created quickly using existing code. Long term, it is anticipated that sophisticated applications would be simple to build.

Cosmos now has the twenty-first largest market value, but at this pace, it would only take $0.8 billion to flip FTX Token and make a bold entry into the top twenty.

Some in the crypto sector, much worried about the amount of fragmentation in blockchain networks. There are hundreds, yet few can converse. Cosmos wants to change this by making it feasible.

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