DeFi And NFTs Worst Hit By The Terra Debacle

Despite the fact that Blockchain DeFi and NFTs, as well as some firms that are considered major players in the Blockchain ecosystem, such as Arrow Capital (3AC), Voyager, and DeFi, have not fared well in the Lehman brother-like collapse of Terra in May. A report on Gamefi and the metaverse reported a reduced, if any, effect during the collapse.

Data from the Decentralized Application (DApp) data aggregator Dappradar, shows that the downfall of Terra could be likened to the 2008 subprime mortgage crisis as this has greatly affected firms and the entire crypto industry.

A decline in the DeFi and NFT sectors has been observed since the collapse, while blockchain Gaming and Metaverse projects have shown a very reduced (or even positive) growth rate.   

Blockchain games and the metaverse has in fact held the trust of investors as it received $2.5 billion in investment in the first and second quarter of  2022. It was able to show an increment in the growth pace by 9.5% in the second quarter of  2022 and grew, by 27%, the number of trading activities in metaverse projects, giving a ray of hope to the sector.

DeFi and NFTs experienced a huge decline during the second quarter, each declining by 14.8% and 12.2% respectively. 

The average amount of interaction from Unique Active Wallets (UAWs) in NFTs reduced by 24% in the second quarter, while that of the Blockchain gaming sector reduced by just 7% indicating that there was still interactions from users in the latter sector at a pace that was not really affected by the Terra incident 

Metaverse related NFTs have appeared to be the light at the end of the tunnel for some stakeholders in the blockchain ecosystem because it recorded an increase of 97% since the second quarter of the year.

DappRadar also suggested in one of its July reports that blockchain games may have been able to stand stronger than other crypto ecosystems in the last quarter given the fact that these games may really be  speculative.

They maintained that given the persistent institutional investment in both blockchain and the gaming metaverse, investors see potential for a more stable economic development in these ecosystems in the near future.

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