The Blockchain gaming industry and the metaverse seem to have avoided the collapse of Terra. However, according to a report, decentralized finance (DeFi) and non-fungible tokens (NFT) haven't been so lucky.
A recent report from DappRadar, an aggregator for decentralized applications, points out the similarities between what happened with Terra in May this year and 2008's subprime mortgage crisis. This caused DeFi markets such as Three Arrows Capital (3AC), Voyager, and Celsius to cop the brunt 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."
The research by DappRadar has shown that while some blockchain projects experienced setbacks, others, such as GameFi and Metaverse, had positive signs for growth in the same period.
The report shows how the performance of various sectors in crypto changed during Q2 this year when a collapse from Terra impacted them. It looked at an important metric: transaction count, or how many times a user has completed their transactions. This shows user engagement and provides insight into what people want.
The biggest losers were DeFi projects and NFT, with an average decrease of 14.8% and 12.2%, respectively. Blockchain games saw a more moderate 9% rise, while NFT-related metaverse projects witnessed 27% higher growth rates.
DappRadar report also added that while the average amount of activity from unique active wallets (UAWs) in NFTs dropped by 24%, blockchain gaming saw just 7% less interaction with DApp users. This suggests users continue to interact with these DApps at levels seen before the terra incident, an unfortunate event that brought about many changes within this industry.
The metaverse trading volume is a beacon of hope for the NFT sector, with volumes increasing by 97% since the last quarter despite an overall drop of 32.66% in the NFT sector during this period. Blockchain gaming improved last quarter due to the non-speculative aspects of these games.
"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," the report read.
The future of blockchain and virtual reality is bright, with sustained institutional investment in gaming cryptocurrency and Metaverse. Many top companies see great potential for economic growth moving forward. The report emphasized that despite the Terra catastrophe, there was still a lot of investment in blockchain gaming and metaverse projects in Q2.
"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."