Blockchain games and nonfungible token (NFT)-related metaverse projects “managed to sidestep the ensuing bear market” by posting transaction count surges of 9.5% and 27% respectively in Q2, 2022.
Blockchain gaming and the Metaverse have managed to “sidestep” the “Lehman brothers-like” collapse of Terra in May 2022 – although decentralized finance (DeFi) and nonfungible tokens (NFTs) have not been so lucky, according to the report.
In a July 29 report from the decentralized application (DApp) data aggregator DappRadar, the crumbling of Terra in May was similar in scale to the infamous 2008 subprime mortgage crisis. The collapse made NFTs, DeFi, and companies like Celsius, Three Arrows Capital (3AC), and Voyager feel the heat of Terra’s Destruction:
“It is becoming clear that the Terra debacle has become a Lehman brothers-like event that has sent shockwaves across the entire breadth of the crypto industry and aftershocks that will affect us for many months.”
Nonetheless, DappRadar noted that metaverse projects and blockchain gaming showed minimal shortcomings and even positive signs of growth in the same period.
Weathering The Storm
The report compares various metrics to show the way the Terra collapse (during mid-Q2) affected the performance of different industries in crypto between the first two quarters of 2022.
One major metric the report looks at is transaction count, or the total number of completed transactions that essentially shows user engagement. NFTs and DeFi saw the largest drops with 12.2% and 14.8% apiece, while the blockchain games and NFT-related metaverse projects “managed to sidestep the ensuing bear market” by posting surges of 9.5% and 27% respectively in Q2, 2022.
The report also added that while an average amount of activity from unique active wallets (UAWs) in nonfungible tokens plunged by a massive 24% in Q2, blockchain gaming saw a plunge of only 7%, suggesting that the users continue interacting with gaming dApps “at a more or less the same rate as before the Terra incident.”
The trading volume for the metaverse-related nonfungible token projects was also said to be a “beacon of hope,” as volumes surged by a staggering 97% since in Q2, despite the general NFT industry posting a 32.66% drop in Q2.
In another DappRadar report from July, the company suggested that blockchain gaming might have managed to hold up better than other crypto industries last quarter as a result of the non-speculative aspects of the games themselves. The report read:
“This bullish activity indicates that engagement with the virtual worlds is not predicated on their profitability to the end-user. It shows virtual worlds are intrinsically fun to the end-user as the communities remain active despite the devaluation of native tokens.”
DappRadar also stated that there was sustained institutional investment in blockchain gaming and the Metaverse, highlighting that most top firms see the possibility of strong economic growth in both industries going forward.
The report went on to insist that amount of investment into blockchain gaming and metaverse projects remained continuous in Q2 2022 despite the Terra carnage:
“Despite a financial blow and undermined trust in the industry, investors remain bullish as the number of investments into blockchain games and metaverse projects has remained constant quarter-over-quarter, with $2.5 billion invested in both Q1 and Q2.”