Blockchain games are proving resilient amid crypto disasters
The decline of FTX is straining several corners of the cryptocurrency ecosystem and has the predictable effect of challenging investors’ willingness to hold digital assets, including crypto-correlated stocks.
While FTX’s collapse has a contagion effect – the extent of which some experts argue is not fully known – some corners of the crypto industry are proving surprisingly resilient. These include blockchain-based gaming, which has long been seen as a key growth driver for broader blockchain adoption beyond digital currencies.
That positivity can be a plus for exchange-traded funds such as VanEck Digital Transformation ETF (DAPP). For its part, DAPP recently showed signs of rising, gaining nearly 4% last week.
“Despite the FTX collapse, Web3 gaming continues to be a driving force for the dapp industry. In October and November, gaming activity accounted for nearly half of all blockchain activity tracked by DappRadar across 50 networks, with 800,875 daily Unique Active Wallets (UAW ) that interacted with the games’ smart contracts in November. reported DappRadar.
The development of blockchain games underscores the broader use of related technologies. While this use case has long revolved around serving as the digital ledger for digital currency transactions, investors are waking up to the point that there is much more to the blockchain story.
“More” includes applications with digital identification, medical records, real estate, wills and trusts, games, rewards platforms and much more. Add to that, the intersection of blockchain and gaming is relevant in the nascent non-fungible tokens (NFT) market.
“The impact of blockchain games is also visible in the NFT market, where in-game NFTs had a total trading volume of $55 million in the last two months. Gods Unchained remains the top game by trading volume, generating 60% of the total trading volume for game assets, according to DappRadar.
Perhaps strengthening the blockchain task – and gaming is also relevant at this point – are the technology’s applications within the metaverse, which is another young market that could have great growth potential.
“Although investments in blockchain-based games and Metaverse projects decreased in recent months, $534 million was raised in October and November. It is also worth noting that many projects focused on building Web3 gaming infrastructure. Examples of these are Horizon Blockchain Games and Fenix Games, both of which have raised a total of $190 million,” concluded DappRadar.
DAPP’s blockchain-related holdings include Block (NYSE:SQ) and Coinbase (NASDAQ:COIN).
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