GameFi and Metaverse Least Impacted by Terra Terror: Report
Blockchain games, as well as the Metaverse, were able to “circumvent” the “Lehman brothers-like” collapse of Terra in May, according to a report; however, decentralized finance (DeFi) or nonfungible tokens (NFTs) were not as fortunate.
According to a report published by decentralized application (DApp) data aggregator DappRadar, the breakdown of Terra in May was comparable in scale to the subprime mortgage crisis that occurred in 2008. This caused DeFi, NFTs, and businesses such as Three Arrows Capital (3AC), Celsius, and Voyager to shoulder the majority of the responsibility for Terra’s demise:
“It is becoming evident that the Terra catastrophe has become a Lehman brothers-like tragedy that has sent shockwaves across the whole width of the crypto business and aftershocks that will affect us for many months,” said one commentator.
DappRadar found that blockchain gaming and metaverse initiatives showed either minor downsides or even positive indicators of growth within the same period. This was the case in both cases.
Making it Through the Storm
The research analyzes and contrasts various measures to demonstrate how the collapse of Terra (which occurred in the middle of Q2) influenced the performance of various areas of the cryptocurrency industry during the first two quarters of this year.
The transaction count, also known as the total number of successful purchases, is one of the important metrics that is analyzed in this report. This statistic effectively indicates the level of user involvement.
Blockchain games & NFT-related metaverse projects “managed to dodge the ensuing bear market” by showing rises of 9.51 percent and 27 percent, respectively. The largest declines were seen in DeFi and NFTs, with 14.8 percent and 12.2 percent, respectively.
The report also stated that while the ordinary amount of transactions from unique active wallets (UAWs) in NFTs did drop by a significant 24 percent in Quarter 2, blockchain gaming only saw a drop of 7 percent, which suggests that abilities to interact with gaming DApps “at a rate that is roughly comparable to what it was before the Terra incident.”
The trading volume for NFT projects related to the metaverse was also hailed as a “beacon of hope,” as volumes soared by an astounding 97 percent since in Q2, even though the entire NFT sector posted a decline of 32.66 percent in Q2.
In a second analysis from July, DappRadar claimed that blockchain games might have been able to endure better than some other crypto sectors during the previous quarter because of the non-speculative characteristics of the games. This hypothesis was presented in the research.
“This optimistic action suggests that involvement with virtual worlds is not dependent on their profitability to end-users. This is an important distinction to make,” According to the paper, “It shows virtual worlds are fundamentally interesting to end-users since the communities remain active despite the devaluation of local tokens.”
DappRadar stated a persistent institutional investment in blockchain gaming and the Metaverse. This highlights the fact that many leading firms recognize the potential for great economic growth in both industries moving forward.
Neal Stephenson, the visionary behind the Metaverse, is currently working on a blockchain that will help creators.
The report went on to note that despite the Terra bloodbath, the amount of investment into blockchain gaming and metaverse initiatives remained similar throughout Q2:
“Despite suffering a financial blow and having their trust in the sector shaken, investors remain confident as the number of investments into blockchain games and metaverse projects has stayed constant quarter-over-quarter, with $2.5 billion invested in both Q1 and Q2,”
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