On July 29, crypto analytics platform DappRadar released a report detailing how blockchain and crypto projects dealt with crypto contagion following the collapse of the Earth ecosystem in May.
According to the report, more than $ 40 billion in venture capital and retail funds were stolen following the catastrophic collapse of Terra’s UST stablecoin.
The ripple effect isn’t contagious with cryptocurrency hitting lending companies like Celsius and brokers like Voyager, Three Arrows Capital, and BlockFi. Mass liquidations of leveraged positions and loans caused a rush to various platforms, which were forced at the expense of withdrawals.
The decentralized finance industry was heavily influenced by Terra’s LUST being an integrated part of many lending and lending protocols. According to DefiLlama, the total value locked in DeFi dropped 64%, from more than $ 250 billion in December 2021 to just $ 90 billion today.
DeFi hit hardest
Not surprisingly, it got the biggest share, as the exposure is based on leveraged loans and mortgages, unrealistic yields and a strong to Earth. Now that all this leveraged speculation has been eliminated, a clearer picture of the ecosystem is emerging.
DeFi’s TVL has risen since mid-June when it dropped below $ 70 billion. The gains have been slow and steady, but the whole ecosystem has not collapsed and there have been many survivors.
MakerDAO (MKR) has become the best DeFi protocol with a market share of around 9.5%. Its Collateral-Backed Stablecoin, DAI, did not falter during the MTS roll and maintained its peg to the dollar.
Cryptocurrency contagion is hitting Non-Fungible Token (NFT) projects. In fact, there was a decline in transaction and sales volumes in the first half of the year. However, the markets are slowly stabilizing and showing signs of recovery.
Metaverse and surviving game
The sectors due are not – suddenly having such a severe impact in the period following Earth were the Metaverse and blockchain games. Blockchain games have been the least affected by the slab turmoil, the report reads.
And blockchain games, like GameFi, use tokenized items and in-game currency for groceries and virtual worlds. I believe that the decline in activity suggests that users have interacted with blockchain games at a similar pace, independent of the contagion of cryptocurrencies.
Coming from Axie Infinity (AXS), Decentraland (MANA) and Splinterlands (SPS), Metaversi are becoming participants. My researchers concluded that the NFT project related to the Metaverse have grown year on year and the global interest remains strong:
The NFT projects bequeathed to Metaverse are a beacon of hope as they have seen an overall increase in transaction volume and number of transactions of 97% and 27% respectively.