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A Sea Of Red Across Markets
The bear season affecting cryptocurrencies has been in place for several months now. May 2022 offered little relief as bitcoin dropped below $30,000 for the first time in 17 months. Alternative currencies are down by up to 90% from their all-time highs reached in November 2021. Making matters worse is the decreasing DApp activity and infrastructure concerns affecting networks like Solana.
Some may point to Terra’s collapse as being a key catalyst for this downtrend. However, one must acknowledge the markets have been in very bearish territory since late November 2021. While Terra represents a $60 billion removal of wealth in the market, it was the proverbial drop in the bucket. Ongoing sell pressure across all markets has little to do with Terra and UST and more with macroeconomic fear and uncertainty.
The DeFi industry received a significant blow from Terra’s demise, as it was the second-largest network by Total Value Locked. Losing over $25 billion in TVL was worrisome, although the industry is rebounding. Even though the bear market affects these TVL rates too, DeFi has an 11% increase in Total Value Locked over May 2021. A shining beacon of light amid all the darkness spreading throughout the industry.
Speaking of DeFi, Tron has become a new industry powerhouse. It yields a 47% TVL increase month-over-month despite ongoing market pressure. It starkly contrasts Ethereum, BNB, Polygon, and Solana, losing up to 38% in the same period. More significant losses of up to 60% have been recorded for Avalanche, Cronos, Fantom, and Near. There is still a power vacuum to claim the #2 TVl spot from Terra, and it will be interesting to see who comes out on top.
 
 
NFTs Are Alive And Well
Looking at some positive developments, one has to acknowledge the resilience of the NFT industry. A monthly volume of $3.7 billion in May 2022 is more than respectable, although it is a 20% decrease over April. Even so. OpenSea generated 950,000 ETH in volume, a 6.5% decrease, yet a 25% drop-off when measured in USD. On the opposite side of the spectrum, Solana NFTs noted a 13% volume increase, surpassing $335 million in May 2022.
New collections have come to the forefront in the ever-shifting NFT industry. More liquidity pours into GoblinTown and Otherdeeds, removing volume from Moonbirds and Okay Bears. Blue-chip collections continue to lose ground, and price floors continue to drift lower. Azuki, a top-tier collection, lost 75% of its value, whereas Bored Ape Yacht Club had a 38% price floor decrease, and Mutant Ape Yacht Club lost 57%.
There is a silver lining for NFTs, too, as marketplace competition is emerging. Activity across LooksRare, Magic Eden, and others continue to pick up. OpenSea’s trading volume dominance decreased from 90% to 63.3%, a healthy sign for the industry at hand. However, it represents 76% of all organic trading volume, far ahead of Magic Eden (10.1%) and LooksRare (8.1%).
Blockchain Games Are Very Resilient
One would expect blockchain games to suffer from these market conditions but things are looking fine. A 5% decline n unique active wallets connected to game dApps is not abnormal. Moreover, the top games maintain their player base, and metaverse projects remain of great interest to VCs. Investments still occur around the clock, indicating there is long-term potential for this vertical.
Newer projects, like STEPN and Genopets, have come up with a way to introduce play-to-earn mechanics to physical activities. Move-to-earn is a new and popular trend in GameFi and will likely continue to build momentum. Last but not least, virtual worlds, like Otherdeed, had their best month at $850 million generated in May 2022.
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