Major metaverse tokens fell sharply this week as Facebook owner Meta Platforms hit a road block in its plans for a virtual world. Broader crypto market weakness also weighed on most tokens.
Top metaverse tokens including Decentralan (MANA), The Sandbox (SAND), Axie Infinity (AXS) and ApeCoin (APE) dropped between 15% to 26%. AXS was the worst performer among its peers, also losing its spot as the third-largest metaverse token as it struggled to recover from a $600 million hack.
Sentiment towards the space was hit by a potential delay in Meta’s plans for a virtual world, which could slow down the amount of capital flowing into the metaverse space. Investors also appeared to be collecting profits after a strong run in token prices through late-March.
Broader weakness in the crypto market also factored into token losses.
Meta hits metaverse hurdle
Meta, which is arguably the biggest factor behind the popularity of the metaverse today, hit a hurdle in its plans to build a virtual world.
U.S. regulators ruled on Friday that the firm must give shareholders the opportunity to vote over its metaverse plans. Specifically, the company will now have to hold a vote over a shareholder proposal that scrutinizes Meta’s plans for a virtual world, citing potential psychological and human rights damages that could occur on the platform.
The proposal, which was announced in December, calls for a third-party assessment of potential health and political risks from Meta’s planned online space. The group of activist investors backing the proposal noted Facebook’s history in hosting politically divisive content.
While Meta had initially sought to block the proposal, it will now be voted on during Meta’s annual shareholder meeting in May. The vote will allow shareholders to decide whether the technology giant’s plans for a metaverse are “prudent or appropriate.”
More companies look at virtual ventures
But while meta may be faltering in its virtual forays, several other firms are looking to capitalize on the rapidly-expanding space. Singapore’s DBS Group was the latest in a growing number of lenders looking at a space in the metaverse.
Recent intellectual property filings also showed that payments operator Mastercard had filed for trademarks related to the metaverse, following a similar filing by peer American Express.
The increasing interest saw most metaverse tokens enjoy a strong rally in late-March.