Terra Debacle Has Little Impact On GameFi And Metaverse

Terra debacle has little impact on GameFi and Metaverse, as stated by a report from DappRadar.

By reporting transaction count increases of 9.5% and 27%, respectively, in Q2, blockchain games and NFT-related Metaverse projects “managed to sidestep the ensuing bear market.”

The “Lehman brothers-like” collapse of Terra in May has been “sidestepped” by blockchain gaming (GameFi) and the Metaverse, but decentralized finance (DeFi) and nonfungible tokens (NFTs) haven’t been as fortunate, according to a report.

According to the aforementioned report released on July 29 by the decentralized application data aggregator DappRadar, the Terra debacle in May was comparable in scope to the subprime mortgage crisis of 2008, with nonfungible tokens (NFTs), decentralized finance (DeFi), and companies like Three Arrows Capital (3AC), Celsius, and Voyager bearing the brunt of Terra’s demise.

The blockchain gaming and Metaverse projects, on the other hand, showed either minimal flaws or even positive signs of growth during that time, according to Dappradar.

The report compares various metrics to demonstrate how the Terra collapse (midway through Q2) impacts the performance of various crypto sectors over the course of the year’s first two quarters.

The report’s key metric for measuring user engagement is transaction count, or the total number of completed transactions. While blockchain games and NFT-related Metaverse projects “managed to sidestep the ensuing bear market” by posting increases of 9.51 percent and 27 percent each, DeFi and NFTs experienced the largest drops with 14.8 percent and 12.2 percent, respectively.

While average unique active wallet (UAW) activity in NFTs fell by a significant 24 percent in Q2, blockchain gaming saw a drop of just 7 percent, the report said. This suggests that users are still interacting with gaming dApps “at a more or less the same rate as before the Terra incident.”

As a “beacon of hope,” the trading volume for NFT projects connected to the Metaverse increased by a staggering 97 percent since the second quarter, despite a decline in the overall NFT market of 32.66 percent.

According to a separate DappRadar report from July, the non-speculative nature of the games themselves may have allowed the blockchain gaming industry to hold up better than other crypto sectors last quarter.

Additionally, according to DappRadar, there has been consistent institutional investment in both blockchain gaming and the Metaverse, underscoring the fact that many leading corporations see the potential for rapid future growth in both industries.