Report: GameFi and Metaverse least affected by Terra crash

Blockchain gaming and the Metaverse managed to “dodge” Terra’s “Lehman Brothers-style” crash in May, according to a report — though decentralized finance (DeFi) and NFTs haven’t been as lucky.

In a Friday report from decentralized application (DApp) data aggregator DappRadar, Terra’s collapse in May was similar in scale to the 2008 subprime mortgage crisis — which led to DeFi, NFT and Three Arrows Capital (3AC) Companies like , Celsius, and Voyager bore the brunt of Terra's crash:

“It’s becoming increasingly clear that the Terra debacle has become a Lehman Brothers-like event that sent shockwaves through the entire crypto industry and aftershocks that will affect us for months to come.”

However, DappRadar points out that blockchain games and metaverse projects have shown few shortcomings or even positive signs of growth during the same period.

Trials and hardships

This report compares different metrics to show how the Terra crash (in the middle of Q2) affected the performance of various tracks in the crypto space in the first two quarters of this year.

A key metric this report focuses on is transaction count, or the total number of completed transactions, which essentially shows user engagement. DeFi and NFT saw the biggest declines at 14.8% and 12.2%, respectively, while blockchain games and NFT-related Metaverse projects “successfully avoided the ensuing bear market” with increases of 9.51% and 27%, respectively.

The report also added that while the average activity of unique active wallets (UAWs) in NFTs fell sharply by 24% in the second quarter, blockchain games only dropped by 7%, indicating that users continue to interact with gaming DApps "in Much the same as before the Terra event."

Since the second quarter, although the overall NFT industry fell by 32.66% in the second quarter, the transaction volume of NFT projects related to the metaverse still increased by 97%. The NFT project related to the Metaverse is also known as the "Lighthouse of Hope".

In another DappRadar report in July, the firm suggested that blockchain gaming may have performed better than the rest of the crypto industry last quarter due to the non-speculative aspects of the games themselves.

“This bullish activity shows that engagement in virtual worlds does not depend on end-user profitability. It suggests that virtual worlds are inherently interesting to end-users as the community remains active despite native token depreciation,” the report wrote in.

DappRadar also said that there is continued institutional investment in both blockchain gaming and the Metaverse, highlighting that many top companies see strong economic growth potential in both areas.

The report goes on to highlight that despite Terra’s debacle, the number of investments in blockchain games and Metaverse projects has remained the same:

"Despite the financial hit and eroded trust in the industry, investors remain bullish as the number of investments in blockchain games and Metaverse projects remained flat quarter-on-quarter, with investments reaching $2.5 billion.”