Metaverse, NFT & Gaming Report — February Edition
Monthly comprehensive report that summarizes all major trends, developments and funding across the Metaverse, NFT and Web3 Gaming space
1. NFT Overview
February proved to be a robust month for NFTs as volumes overall increased, along with the broader market rally. Trading volumes across the most popular blockchains (Ethereum, Solana, ImmutableX, Cardano, Polygon) stood at $1 Billion (excluding wash trading), up 1.7% from the previous month.
The biggest talking points for the month in NFT land were Bitcoin Ordinals and NFT marketplace wars between Opensea and Blur. The NFT market began on a strong note in February, as the Bitcoin-related NFTs (Ordinals) gained significant momentum, riding the wave of overall uptrend in the market. The hype surrounding the Ordinals protocol and digital artifacts was unsurprising given that for the first time, NFTs could be stored natively on Bitcoin. This was revolutionary for most investors as NFTs previously had only been stored on a layer on top of Bitcoin like Stacks.
Ordinals generated a lot of interest among investors and speculators, who rushed to inscribe the first many ordinals in mid-February. Initially, only a select few had access to the inscription process due to the high entry barrier. However, the situation soon changed with the introduction of various applications that made it possible for anyone to create digital artifacts. Over 200,000 inscriptions had been made in February alone. Check out our article where we extensively wrote about Bitcoin Ordinals and how they work.
NFT marketplace wars were the other major event in February. Blur and Opensea went head-to-head in a battle for supremacy over the month as Blur launched its token and airdropped up to 360 million tokens to its previous users. Following this momentum, Blur took a jab at Opensea mid-month by updating its royalty policy and incentivising collections by enforcing full royalties in exchange for blocking the collections on Opensea.
The marketplace additionally announced $300 million in Airdrop tokens for loyal users over Season 2 of rewards, which saw wash trading and volumes proliferate. Amid this increase in the popularity of Blur, Opensea has also reduced its fee to 0% on trades and modified creator royalties. Overall, Blur ended the month leading NFT volumes over Opensea by a large margin.
In terms of funding in the NFT sector, we saw $41 million in funding inflow for the month, up 71.5% MoM. The largest funding amounts went to Superplastic and Fungify, drawing in $20 million and $6 million, respectively.
NFT Recent Developments
Blur and Opensea fight for NFT marketplace supremacy. Blur marketplace gained significant ground on Opensea after releasing its token and announcing $300 million in token rewards for its next season of airdrop.
Multiple NFT related tokens released in February: Sudo token for Sudoswap becomes publicly tradable, Blur airdops tokens to eligible NFT traders, Collabland announced and airdropped tokens to eligible wallets and communities
Bitcoin Ordinals rise to prominence as the innovative Ordinal protocol allows users to hold digital artefacts on the Bitcoin Blockchain. Over 200,000 inscriptions made on the chain in February alone.
Uniswap enables NFT trading with any Ethereum based NFT tokens on its NFT marketplace (Decrypt). The update drastically simplifies the process for users that might need to swap tokens before purchasing NFTs.
Spotify is testing token-enables playlists which allow holders of NFTs to listen to curated music (Coindesk). The pilot is available to Android users in select countries and token holders within Fluf, Overlord, Kingship and Moonbirds communities.
Popular brands continue their expedition of creating NFT collectables. Puma launches Super Puma NFTs, Lamborghini collaborated with VeVe to release sports car collectables, Hublot joined forces with Takashi Murakami to unveil NFTs tied to watches.
Sony partners with Astar network to launch an incubation program for NFTs and DAO focused Web3 projects (Bitcoin.com)
The NFL teamed up with Reddit to release limited edition free avatar collectables celebrating Super Bowl LVII. Over 2.1 Million Superbowl NFTs have been minted on the Social Media Platform.
Monthly NFT Stats
NFT Project Fundraises
2. Web3 Gaming Overview
The Web3 gaming sector had an impressive month in February. We experienced a list of large scale advancements in the space coming from web3 native projects as well as from large traditional gaming companies. The gaming daily UAW dropped in February and stood at 730,290 average gaming unique wallet interactions over the month.
The most notable event for the Web3 gaming industry in February was the Unity assets store’s integration and launch of the decentralized category section, which was by far the most impressive and groundbreaking advancement. The dedicated section allows developers to find solutions to manage digital assets, set up smart contracts and build on blockchain networks, according to Unity.
The game engine has already integrated 13 new verified solutions and SDKs in the category including Dapper Labs, Aptos Labs, Immutable X, Metamask, Solana and Tezos. This development is massive news for the Web3 space. Being one of the largest and most popular game engine, Unity making these integrations proves revolutionary for developers that intend to build web3 games.
The Web3 gaming space also received a major boost from two renowned gaming companies, Square Enix and Ubisoft, both of which made notable forays into the space over the month. Ubisoft introduced Rabbids NFT avatars on the sandbox metaverse game, while Square Enix announced their first digital art collectable project on Polygon called Symbiogenesis. All of these entries from traditional companies have been an incredibly positive indicator for the sector.
Apart from action from web2 companies, we saw multiple top quality web3 games releasing early alpha/beta versions to holders, the largest of which was Parallel. The highly anticipated TCG game launched its closed alpha release at the end of Feb, after close to 2 years of development.
On the funding end, the gaming sector saw a substantial increase in funding amounts compared to the previous month. We saw a funding inflow of $95 million, up 32% MoM across 13 funding rounds. The largest funding amounts went to Kratos Studios and Mino Games, drawing in $20 million and $15 million, respectively.
Gaming Recent Developments
Unity tapped into the Web3 space by releasing a decentralization category under its online storefront (Coindesk). The gaming engine aims to provide developers with resources to connect to Web3 gaming and has integrated support for 13 different blockchain SDKs
Video game giant Square Enix has partnered with Polygon to launch digital collectable project titled Symbiogenesis (Coindesk). The project will offer an experience built around collectable art that are tied to a storylines players unfold.
Popular game publisher Ubisoft launched a collection of 2,066 Rabbits avatars for the Sandbox Metaverse. The video game publisher has been constantly experimenting with NFTs and Web3 technologies.
Loco, the largest game streaming platform in India has teamed up with Avalanche to revolutionise games on Subnets (Tweet). Loco aims to bring collectables to fantasy gaming and add a new layer to the fan experience to it.
ImmutableX launches Immutable Passport, an instant wallet onboarding solution for Web3 games (Announcement). The solution is a custodial wallet and authentication solution for onboarding mainstream audiences.
Fortnite star Mongraal accepted a 1,000 ETH (- $1.63M) bid on the Dookey Dash NFT key after achieving the highest score on the Yuga Labs game (Decrypt)
DigiDaigaku airs $6.5 Million ad during the Super Bowl with a QR code that users could scan to claim Dragon NFTs. Crypto community express mixed views on the advertisement given the QR code redirected to the CEOs twitter account.
Monthly Gaming Stats
Gaming Project Fundraises
3. Metaverse Overview
February was an incredible month for the Metaverse Sector. Monthly volumes and sales numbers of Metaverse worlds soared over the month, reaching impressive levels. Metaverse volumes in February stood at $102 million, up 175% from the previous month. This is in fact the first time volumes have hit the $100 million mark since May last year, when Otherside sold its Otherdeed plots. Of the volumes over the month, 97% of the sales were related to the Otherside Metaverse.
While there wasnt much announcements from the Yuga Labs team, there is a possibility that a large portion of these trades are related to Blur airdrop farming by NFT whales. Another decentralised metaverse that impressed and ranked as the second-most traded world was Worldwide Webb. The retro styled Metaverse saw a funding infusion of $10 million in Feb, resulting in the increased sales volumes. The Metaverse plans to bring in in-game features like quests and PVP competitive modes in the future.
Apart from the positive momentum seen in the decentralised space, the traditional Metaverse space also saw a slew of positive developments in February. The largest of which was the incredible Metaverse partnership among Japanese tech companies. 10 of the biggest companies such as Fujitsu and Mitsubishi Corporation partnered to build an Open Metaverse Infrastructure called RYUGUKOKU. The Metaverse infrastructure aims to enable interoperability between Metaverse worlds.
Multiple Brands and organisation continued their foray into Metaverses in February. Invincible, Doritos and AXA were some of the more recognisable brands to enter the Metaverse over the month. On the funding front, Metaverse Funding dropped sharply over the month, down 41% from the previous month. The largest funding amounts went to Worldwide Webb and Mawari, drawing in $10 million and $6.5 million respectively.
Metaverse Recent Developments
Japans biggest tech and finance companies have teamed up to form an initiative to build a Metaverse Economic Zone (NFTGators). Fujitsu, Mitsubishi and JCB financial are among the 10 companies that have signed to build an open metaverse infra called Ryugukoku.
The Sandbox has signed a memorandum of understanding with the Saudi Arabia Digital Government Authority (Tweet). The partnership entails exploring, advising and mutually supporting each other in activations of the Metaverse.
Deloitte and Sinclair Broadcast Group team up to launch a new Metaverse sports fan community experience (Announcement). The new community experience will enhance the way fans build connections and engage with the content they love.
Huawei to launch a Metaverse and Web3 Alliance for East Asia (Finbold). The tech titan has entered into a partnership with multiple blockchains over the launch of its Metaverse.
Blackrock is offering an ETF that focuses primarily on companies that are exposed to the Metaverse (Coindesk).
Columbia’s legal system experiments in the Metaverse as a court recently hosted its first legal trial on the Metaverse (Cointelegraph)
Nokia is exploring the use of the Metaverse for industrial purposes and to support workers in distant locations (NFT News)
Monthly Metaverse Stats
About Rising Capital
Rising Capital is a Singapore head-quartered ‘Digital Assets Management’ firm focused on early-stage blockchain investments (Rising Funds) and venture building studio (Rising Studios) in South & Southeast Asia. Since 2013, the team has built, operated and sold several crypto ventures before setting up ‘Rising’ to capture significant return asymmetries by picking and investing in brilliant founders, while keeping a majority of investments in liquid assets.
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