According to a report, Blockchain games and the Metaverse managed to survive the “Lehman Brothers-like” collapse of Terra (LUNA) in May. However, decentralized finance (DeFi) and Non Fungible Tokens (NFT) have not been so lucky.
“Terra (LUNA), the Lehman Brothers of the crypto market”
Decentralized application (DApp) data aggregator DappRadar released a report on Friday. Terra’s collapse in May was similar in scale to the 2008 subprime mortgage crisis, the report said. Moreover cryptocoin.com As you follow, DeFi, NFTs and firms like Three Arrows Capital (3AC), Celsius and Voyager have taken the brunt of the destruction of Terra (LUNA). The report highlights the following:
It is becoming clear that the Terra debacle has become a Lehman Brothers-like event that sent shockwaves and aftershocks to the entire crypto industry that will affect us for months.
However, DappRadar notes that blockchain gaming and metaverse projects showed either minimal downsides or even positive signs of growth during the same period.
Metaverse projects surge as DeFi and NFTs decline
The report explores how the Terra (LUNA) collapse affected the performance of various sectors in crypto between the first two quarters of this year. It compares different metrics to show this effect. One important metric the report looks at is the number of transactions. Total number of completed transactions, essentially showing user interaction. DeFi and NFTs experienced the biggest drops at 14.8% and 12.2%. On the other hand, Blockchain games and NFT-related metaverse projects posted increases of 9.51% and 27%, respectively. In this way, it managed to circumvent the next bear market.
The report also notes that the average amount of activity from uniquely active wallets (UAWs) in NFTs dropped by 24% in Q2. Blockchain games, on the other hand, have dropped just 7%. This is roughly the same rate as before the Terra event with users’ game DApps. Overall NFT sector trading volume decreased by 32.66% in Q2. Despite this, the trade volume for Metaverse-related NFT projects has increased by 97% since Q2. It has been described as a ‘sign of hope’ for it.
What does this bullish event in the Metaverse indicate?
In a separate DappRadar report from July, the firm highlights the non-speculative aspects of the games. This is why he suggests that blockchain games may hold up better than other crypto industries in the last quarter. In this context, he makes the following assessment:
This ascent event is a sign that interaction with virtual worlds is not dependent on profitability to the end user. It shows that virtual worlds are intrinsically fun for the end user, as communities remain active despite the devaluation of native tokens.
“Despite Terra (LUNA) collapse, investment in metaverse has increased”
DappRadar also highlights continued institutional investment in both Blockchain games and Metaverse. In addition, he notes that many top companies see strong growth potential in both sectors. The report states that despite the Terra massacre, the amount of investment in blockchain games and metaverse projects remained consistent in Q2. In this context, he makes the following statement:
The market took a financial hit and confidence in the industry was shaken. Despite this, the number of investments in blockchain games and metaverse projects remained stable on a quarterly basis. In addition, $2.5 billion was invested in both the 1st and 2nd quarters. These developments show that investors continue to rise.
