Despite the market downturn that we have experienced in the first five months of 2022, we are still seeing the metaverse space being the best performer in terms of price appreciation. Metaverse tokens are vastly outperforming every other crypto category in the current bearish condition, up by approximately 400% year-on-year.
Leading the gains are Decentraland (MANA) up 41%, Sandbox (SAND) up 470%, Axie Infinity (AXS) up 511%, and STEPN (GMT) up 746% according to data from the May 2022 market report by Kraken Intelligence and CoinGecko. Metaverse tokens can be used to pay fees, buy land, and participate in governance.
The next highest category for year-on-year gains were exchange tokens which saw a 6% increase. All other categories saw negative price action in the same time period ranging from -13% for Bitcoin to -72% for Decentralized Finance (DeFi).
What you should know
Blockchain-based gaming using nonfungible tokens (NFT) and Metaverse platforms has remained tremendously popular throughout 2022 so far.
Despite slumping prices across the market, usership among those games has remained consistent at about 1 million users per day according to data from decentralized app (Dapp) tracker DappRadar.
The Kraken report pointed out that although May saw flat daily usership, its also stated that, “NFT volume saw a large decrease with daily volume dropping -87.1%.”
Every sector tracked by Kraken’s report, including Metaverse and exchange tokens, experienced negative returns over the past 30 days and 90 days.
Metaverse tokens were among the worst losers over the past 30 days, dropping 42%, with by far the highest volatility at 173%.
Despite the short-term price action, investors have been pouring in funds into the sector. DAppRadar’s Q1 games report noted that $2.5 billion was raised in support of blockchain games and Metaverse projects in the first quarter of 2022.
Investors were eager to back games according to the report because 52% of all blockchain activity came from game DApps. It reads, “At this pace, play-to-earn and Metaverse-related projects will add $10 billion this year to keep building the future of this industry.”
Layer-1 tokens such as Solana (SOL) and Cardano (ADA) led the losers as over the past 90 days, they are down 53% and down 43% over the past 30 days. Bitcoin (BTC) and Ethereum (ETH) saw relatively modest losses compared to altcoins over all three-time frames measured by Kraken.
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