Metaverse, NFT & Gaming Report — March Edition
Monthly comprehensive report that summarizes all major trends, developments and funding across the Metaverse, NFT and Web3 Gaming space
1. NFT Overview
March was a relatively subdued month for NFT markets, as volumes across major blockchains totaled $691 million (excluding wash trading), down 30.9% from the previous month. Floor prices of NFT blue chips fell as the overall crypto market continued to rise and reached levels last seen in August of last year. The Nansen 500 index declined by 15%, while the NFT bluechip index dropped by 10% over the course of the month.
In terms of NFT volumes, Solana, ImmutableX and Polygon all gained a little dominance over Ethereum over the month. Solana in specific saw a 17% increase MoM in volumes, while the volumes in Ethereum fell 38% over the same duration. While monthly NFT volumes grew on other chains, Ethereum still maintains a strong hold on the NFT market with a 76% market share.
The battle for market share among marketplaces also continued in March. Opensea bounced back from a tough February and increased its share of fill volumes from 17% to 26%. However, Blur still dominates the NFT markets with a 60% share of fill volumes. This is largely due to their Season 2 airdrop rewards, which has attracted traders willing to take losses in pursuit of a larger airdrop. It is still unknown whether traders will continue to use the marketplace after rewards conclude or what the team is building for the future.
March was also a strong month for Bitcoin Ordinals and NFT lending protocols. Bitcoin ordinals inscriptions more than tripled over March to reach over 660,000 inscriptions so far. Meanwhile, the cumulative number of traders on lending protocols reached 50,000 users, with NFTFi and Bend emerging as the top platforms.
March also brought some negative news for the NFT industry as Meta announced that it will be winding down support for NFTs. This is a significant blow to the industry, as Meta had made great strides in integrating NFTs on Facebook and Instagram over the last few months. Although the integration had been gaining momentum in recent months, the company has decided to change its approach and overall strategy. Given the shock, all eyes are on Amazon as many have reported a NFT marketplace as soon as April.
In terms of funding, the NFT sector attracted $39 million in funding, down 4.8% from the previous month. Largest funding over the month went to Few & Far and Gryfyn, which raised $10.5 million and $7.5 million, respectively.
NFT Recent Developments
The US Internal Revenue Service (IRS) seeks to tax Non Fungible Tokens like other collectables (CoinDesk). The IRS is considering on whether to tax NFTs on par with collectables such as stamps and wine.
Meta scraps NFT initiative on Instagram and Facebook (Cointelegraph). After 10 short months after launching support, the company winds down its work with NFTs citing change to focus on other ways to support creators, people and businesses.
Amazon most likely to launch its NFT initiative by April-May of this year (WatcherGuru). The collectables are anticipated to be tied to real world assets and delivered to users doorsteps.
Doodles moves away from the ‘Speculative Aspect of NFTs’ to a Media Franchise (NFTGators). The company is transitioning its strategy towards a leading media franchise and is not going to spend any resources appeasing those with financial motivations.
NFT bluechips floor price falls off in March. The Floor price of major collections such as Bored Apes have been on a sharp decline, triggering auctions on NFT lending platforms.
Reddit CEO Steve Huffman announced that the 3rd phase of Reddit collectables will be to build a public NFT marketplace (Tweet). The marketplace will allow users to seamlessly buy and sell NFTs, unlike the current highly technical process.
Salesforce taps into NFTs through a suite of Web3 products (CoinDesk). Their new products will help companies build and integrate NFTs into their business, along with a NFT management platform to monitor success of collections.
Popular generative arts platform Artblocks launches its own secondary NFT marketplace (Announcement). The marketplace is pro-royalty and addresses security and authenticity pain-points.
Monthly NFT Stats
2. Web3 Gaming Overview
March was a standout month for the Web3 gaming sector, with some of the biggest names in the traditional gaming industry announcing their entry into blockchain gaming. The excitement and buzz around GDC also contributed to the positive momentum in the sector. The gaming daily UAW rose in March and stood at 745,650 average gaming unique wallet interactions over the month.
Right after the biggest game engine integrated blockchain API’s and a decentralised tools section in February, there were more positive news in the space in the form of 2 major renowned gaming companies entering the Web3 gaming space. It was none other than Maplestory and CCP Games taking the bold step to integrate NFTs into their games. Nexon, the well-known game publisher announced Maplestory Universe last year. However, since the announcement, the team has been extremely silent on the project until this month, where they issued an article celebrating the 20th birthday and the next generation of games that utilise Blockchain technology. Nexon also partnered with Polygon over the month to use their upcoming supernet technology to run their Maplestory universe ecosystem. This move is unprecedented and calls for attention as the Maplestory IP has been active for 20 years and has had over 180 million cumulative global users.
On the other end, CCP Games the creators behind EVE Online announced it was working on a AAA MMO blockchain game within the EVE universe, as part of its $40 million funding announcement. That makes it 2 major game companies with exponential successes tapping into and building blockchain games. Over the month, more positive news took on the web3 gaming ecosystem during the GDC, as 2 of the premier solutions for Web3 gaming joint hands. Polygon and Immutable partnered to create an ecosystem for Web3 games. With this, Immutable will also be utilising Polygons ZK scaling solution to become the first to be offering the tech in the Ethereum gaming ecosystem.
On the funding end, the gaming sector saw a slight decline in funding amounts compared to the previous month. We saw a funding inflow of $77 million, down 14% MoM across 8 funding rounds. The largest funding amounts went to CCP Games and Matchday, drawing in $40 million and $21 million, respectively.
Gaming Recent Developments
Fortnite’s Epic has close to 20 blockchain games on the store pipeline (Blockworks). The platform currently already has five crypto games that have found some popularity.
Sony Interactive Entertainment files patent for NFTs to allow transfer between games and consoles (CoinDesk). The patent would allow players of Sony products such as PlayStation to have an interoperable Web3 gameplay experience. In some examples, the NFT can be used cross generationally between products.
CCP Games, the studio behind popular space MMO game, EVE Online, raises $40 million to build a new AAA web3 game in the Eve universe (Venture Beat). The game systems will be developed on-chain and also will leverage smart-contract blockchain technology.
Immutable partners with Polygon and joins forces to attract Web3 game developers (Blockworks). Immutable will use Polygon’s zero-knowledge technology for its Immutable zkEVM that will be designed to make developing Web3 games faster and easier.
Gaming Giant Nexon announced it will be utilising blockchain technology for Maplestory Universe (Announcement). Nexon will be using its own dedicated Polygon Supernet for the game.
Esports Giant TSM partners with Avalanche to build its competitive gaming platform called Blitz (CoinDesk). TSM will be launching its custom subnet and plans to host Avalanche-branded tournaments to help gamers improve their skills with performance insights and tools.
Ronin network launches RON staking and announces the first five game studio partners building on Ronin (Tweet)
3. Metaverse Overview
The Metaverse Sector had an impressive month in March. Monthly Metaverse parcel sales volumes stood at $86 million, down 15% MoM — but the sector generated buzz with several noteworthy events taking place.
The Otherside Metaverse garnered significant attention in March, where the voyagers made their way into the virtual world for the second trip. Around 7,200+ concurrent voyagers entered the second trip, up from the previous 4,300 concurrent players in the previous trip 8 months ago. The Yuga labs team arranged an hour long engaging mini game that separated the players into 4 groups and challenged them against each other. Players collected magic blobs as they advanced through various portals and discovered foreign lands. The trip proved to be a major success and left players craving for more in terms of experience. Daily sales for the Otherside Metaverse parcels rose 205% right after the event. Overall, a great month for the Otherside Metaverse.
On the other end, the Decentraland Metaverse along with Spatial Metaverse and OVER hosted the 2nd Annual Metaverse Fashion week during the last few days of March. Over 30+ popular brands like Tommy Hilfiger participated in the event, along with Neo designers such as DressX. Events took place in the Decentraland’s Luxury District and saw multiple large scale Metaverse activations. This highlights the long-term commitment by brands in developing solutions in the Metaverse, despite the fluctuations and drawdown of Metaverse land.
Apart from the positive momentum seen in the decentralised space, the traditional Metaverse space also saw a slew of positive developments in March. In February, we saw the joint agreement by the largest Japanese companies to build Metaverse Infrastructure. This month, it was South Korea that announced its investment in a Metaverse focused Fund. According to the announcement, over $18.1 million had been invested by the Ministry of Science and ICT, in a fund aimed at driving Metaverse initiatives in the country. On the funding front, Metaverse Funding grew 105% from the previous month. The largest funding amounts went to Hexa and DressX, drawing in $20.5 million and $15 million respectively.
Metaverse Recent Developments
South Korea launches Metaverse Fund to expedite domestic initiatives (Cointelegraph). Around 24 Billion Korean Won ($18 Million) has been invested to create a fund of more than $30.2 million toward Metaverse development.
Open Metaverse focused blockchain cofounded by Neil Stephenson, Lamina 1, onboards first partners into its early access program (MetaversePost). Partners such as Dubit, Mystic Moose, Walker Labs and others will be testing tools and providing feedback.
Nissan files Web3 trademarks and trials sales in the Metaverse (Cointelegraph). Nissan Japan announced it has started experimenting a virtual store with features like considering cars to purchasing contracts.
Otherside Metaverse launches 2nd trip of the Metaverse. Over 7,200+ concurrent users journeyed through a series of competitive group mini games.
Metaverse Fashion Week 2023 goes Multi-Platform in push for Interoperability (Decrypt). Luxury brands including Dolce & Gabbana, Coach and Tommy Hilfiger participated in this years event held between 28–31st March.
Luxury brand Gucci to take Active Role in Bored Ape Yacht club after signing a multi-year strategic partnership with Yuga Labs (Blockworks). Gucci aims to join Yuga Labs in exploring the intersection between fashion and entertainment in the Metaverse.
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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