Blockchain gaming and the Metaverse managed to “circumvent” Terra’s “Lehman Brothers-esque” collapse in May, though decentralized finance (DeFi) and non-replaceable tokens (NFTs) haven’t been so lucky, a report says. .
In a July 29 report by decentralized application data aggregator DappRadar, Terra’s May collapse was comparable in magnitude to the 2008 subprime mortgage crisis — leading to decentralized finance (DeFi), non-replaceable tokens (NFTs), and companies like Three. Arrows Capital (3AC ), Celsius and Voyager to face Terra’s destruction.
“It is becoming clear that the Terra debacle has become a Lehman Brothers-like event that has sent shockwaves across the width of the crypto industry and aftershocks that will hit us for many months to come.”
However, Dappradar noted that blockchain gaming and Metaverse projects showed minimal downsides or even positive signs of growth over the same period.
weathering the storm
The report compares several metrics to show how Terra’s collapse (during the middle of the second quarter) affected the performance of various sectors in crypto between the first two quarters of this year.
One key metric the report looks at is transaction count (total number of completed transactions), which essentially shows user engagement. DeFi and NFTs saw the biggest declines at 14.8% and 12.2% each, while blockchain games and NFT-related Metaverse projects “evaded the ensuing bear market” with gains of 9.51% and 27% each to book.
The report also added that while the average amount of unique active wallets (UAWs) activity in NFTs fell by as much as 24% in the second quarter, blockchain gaming saw a decline of just 7%, suggesting users continue to interact. with gaming dApps “at more or less the same pace as before the Terra incident.”
Trading volume for Metaverse-related NFT projects was also described as a “beacon of hope” as volumes increased by a staggering 97% since the second quarter, despite the total NFT industry declining from the second quarter. 32.66% recorded.
In a separate July DappRadar report, the company suggested that blockchain gaming may have held up better than other crypto sectors in the past quarter due to the non-speculative aspects of the games themselves.
“This bullish activity indicates that engagement with the virtual worlds is not dependent on their profitability to the end user. It shows that virtual worlds are intrinsically fun for the end user as the communities remain active despite the devaluation of native tokens,” the report said.
DappRadar also said there was continued institutional investment in both blockchain gaming and the Metaverse, highlighting that many top companies see the potential for strong economic growth in both sectors moving forward.
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The report further emphasized that the amount of investment in blockchain gaming and Metaverse projects remained consistent during the second quarter, despite the Terra massacre:
“Despite a financial blow and undermined confidence in the industry, investors remain optimistic as investments in blockchain games and metaverse projects have remained constant quarter-over-quarter, with $2.5 billion invested in both Q1 and Q2.”