Many gaming, metaverse and NFT-related cryptocurrencies including The Sandbox (SAND), Axie Infinity (AXS), Decentraland (MANA) and Gala (GALA) have suffered heavy losses since the start of the bear market. The main reason for this drop could probably be the decline in NFT buying and selling volumes.
The domain of metaverses at pain
For The Sandbox, overall secondary market land sales were down 54% in Q1 2022 compared to Q4 2021. The Sandbox is a virtual real estate platform, which allows users to purchase digital land as NFT.
Although users of The Sandbox platform have increased to 2 million users, the retention issue is the main cause of this defect. It has been reported that only 7% of users hold purchased land in The Sandbox for more than a year. This highlights user concerns about long-term interest in digital real estate.
About 10% of users sell their NFT in The Sandbox within the first 30 days of purchase. 72% of them kept their NFT for a period of one to three months.
Lack of interest in games Play-to-Earn does not help NFTs
This price correction is likely due to a decline in NFT trading volume. This fell to levels below January 2021, according to data from Dune Analytics.
According to data analytics platform Nansen, Axie Infinity’s revenue has also fallen over the past six months. Axie Infinity brought in just $5,500 in daily income from breeding and market fees. It is down 99% from all-time highs of $17.5 million per day, recorded in August 2021.
Axie Infinity’s revenue comes from transaction fees and creation fees. This is because 0.5 AXS is charged each time a new Axie creature is created, and a 5.25% market fee is due each time Axies are traded.
With a lack of interest in games Play-to-Earn, GALA has also fallen over the past 6 months. Trading activity for Town Star, an NFT collection from GALA Games, has fallen to just over 11 ethers per day from a record high of 601.56 ethers recorded on December 24, 2021.
There are a large number of reasons why metaverse and NFT tokens are plunging. The ecosystem offered by Web3 is quite new. The cryptocurrency market itself is currently in a downtrend, for a variety of reasons. But overall, the disinterestedness and low activity of these sectors do not support the projects and at the same time the prices.
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Metaverse and NFT plunge as bear market declared
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