Many cryptocurrencies related to games, the metaverse and NFTs, including The Sandbox (SAND), Axie Infinity (AXS), Decentraland (MANA) and Gala (GALA) have suffered heavy losses since the beginning of the bear market. The main reason for this fall could probably be the decline in the volumes of purchases and sales of NFTs.
The domain of the metaverse at the penalty
For The Sandbox, overall sales of land on the secondary market decreased by 54% in the first quarter of 2022 compared to the fourth quarter of 2021. The Sandbox is a virtual real estate platform, which allows users to buy digital land as an NFT.
Although the users of The Sandbox platform have grown to 2 million users, the retention problem is the main cause of this defect. It has been reported that only 7% of users hold the land purchased in The Sandbox for more than a year. This highlights user concerns about the long-term interest in digital real estate.
About 10% of users sell their NFT in The Sandbox within the first 30 days after purchase. 72% of them kept their NFT for a period of one to three months.
The lack of interest in games Play-to-Earn does not help NFTs
This price correction is probably due to a decrease in the volume of NFT transactions. This has fallen to levels lower than January 2021, according to data from Dune Analytics.
According to the data analysis platform Nansen, Axie Infinity’s revenues have also fallen over the past six months. Axie Infinity brought in only $5,500 in daily income from livestock and market expenses. It is down 99% from the all-time highs of $17.5 million per day, recorded in August 2021.
Axie Infinity’s income 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 market fee of 5.25% is due each time Axies are exchanged.
With a lack of interest in games Play-to-Earn, GALA has also fallen in the last 6 months. The commercial activity of Town Star, an NFT collection from GALA Games, has fallen to just over 11 ethers per day, compared to a record high of 601.56 ethers recorded on December 24, 2021.
There are a huge number of reasons why metaverse and NFT tokens are plunging. The ecosystem that Web3 offers is quite new. The cryptocurrency market itself is currently in a downtrend, for various reasons. But overall, the lack of interest and the low activity of these sectors do not make it possible to support projects and at the same time prices.
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