Has Terra Debacle Changed NFT, DeFi, and Crypto Adoption?

Paigambar Mohan Raj
Source: GetBlock

The demise of the Terra blockchain had repercussions on almost every aspect of the crypto space. The event has sparked numerous debates among industry experts and governmental watchdogs. Many people lost not only their life savings but also their hopes in the crypto space.

A recent report by DappRadar, a platform for decentralized applications, has compared the Terra collapse to the subprime mortgage crisis of 2008. The 2008 housing bubble had a detrimental impact on every aspect of the global economy. The 2022 crypto crash is no less different, according to DappRadar. They went as far as to compare it to the Lehman Brothers.

What has changed since the fall of Terra?

According to the report, overall blockchain activity has remained more or less unchanged. The platforms report a 1% drop in overall transaction count since Q1 of 2022. However, DeFi-related transactions have reduced by almost 15% since Terra’s fall in May 2022.

Meanwhile, the transaction count for NFTs (non-fungible tokens) has reduced by 12.2% in the last quarter. NFT transaction volume dropped 67% in May, while sales count dropped by 21%. Additionally, the number of unique active wallets interacting with NFTs declined by 24% since the May Terra collapse. Nonetheless, compared to Q2 of 2021, activity is still up by 48%.

Nonetheless, blockchain gaming seems to have defied the trend. DappRadar reports that blockchain-based gaming transactions increased by 9.51% in Q2 2022. The report found that despite the Terra debacle, investments into gaming and metaverse remained constant at $2.5 billion in Q1 and Q2 of 2022. The number of unique active wallets has fallen by 7% in the last quarter. This indicates that the number of people interacting with blockchain games has remained more or less constant before and after the Terra incident.

Now, why the blockchain gaming numbers have not declined since the Terra fiasco is up for speculation. It is possible that the users who interact with such projects are not in it for profit. Games are more inclined towards leisure activities rather than a source of income, at least for now. And this aspect could be a reason for the unchanged metric.

Another DappRadar report from July 12 also corroborates the new report’s findings. The report found that blockchain-based games were the least affected in the bear market post the Terra collapse. The report saw a 19% increase in sales counts year-over-year.

Source: Dappradar

Blockchain-based gaming as an industry is only expected to grow. The gaming industry is one of the fastest-growing sectors in the tech world; hence, it will not be surprising to see blockchain-based games taking center stage soon.