Published on: 13/06/2022
NFT, crypto games outgrow DeFi following slumps in May
Despite facing a recent slump in May this year, NFT and crypto games seem to have found their way back steadily by outperforming DeFi.
According to a report by DappRadar, DeFi was the most affected sector, with a Total Locked Value reaching almost $120 million, while both NFT and crypto games remained resilient despite still being affected. It remains to be seen whether the three sectors will witness more growth this year.
NFT, crypto games grow steadily
2022 has been the worst year for NFT, cryptocurrencies, and all things related to digital transactions ever since a limited-year boom in 2021. The NFT industry faced a tremendous decline in transaction volume, reaching 20 percent of MoM.
However, the backward growth did not shift people’s faith in the industry despite a Google Trends analysis showed that NFT reached its peak in January 2022 but gradually dropped to around 80 percent since.
The Solana NFT collection grew by 13 percent since April, generating $335 million across all online marketplaces. The growth might not be significant compared to the 2021 boom, but this came when floor price values of Yuga Labs’ projects such as BAYC and MAYC were declining.
The largest NFT marketplace, OpenSea, also experienced a decline. There were a number of reasons, including the growing popularity of competitors, including Magic Eden and Wax’s Atomic Hub just to name a few.
As explained in DappRadar’s report, the NFT industry is just facing a slump instead of losing the entirety of its market momentum. The industry also still manages to captivate investors in this uncertain time. As of right now, NFT is currently consolidating following the recent contraction, outgrowing the slump steadily.
“The exposure that the blockchain industry receives from NFTs, puts today’s crypto market in an entirely different position from the conditions seen in the 2018 crypto winter. In those days the levels of engagement and enthusiasm around the industry were alarmingly low. While the mainstream media keeps calling for the NFT bubble to burst, the market conditions of the NFT space disagree,” the report reads.
Crypto games, on the other hand, were affected the least compared to NFT and DeFi. Since April, the number of transactions for crypto games has been only down 5 percent. Reportedly, private venture capital firm Andreessen Horowitz has committed $4.5 billion to boost both the metaverse and crypto gaming industries.
DeFi faces steep decline
Both NFT and crypto games were not affected as much as DeFi. The industry recorded a whopping $117 million of Total Locked Value in May or 45 percent below what was made in late April.
That being said, DappRadar’s report also explained that DeFi was “far from dead” as network protocol Tron made a positive increase of 47 percent MoM TLV. So far, Tron has been the only DeFi protocol that recorded growth instead of the opposite. The rest of the major protocols experienced declines. However, Despite the fact that DeFi was most affected this year, the industry had 11 percent of YoY TLV growth.