Metaverse, NFT & Gaming Report - May Edition
Monthly comprehensive report that summarizes all major trends, developments and funding across the Metaverse, NFT and Web3 Gaming space
1. NFT Overview
May was a good month for NFTs as the markets were filled with lots of activity. The NFT market volumes across major blockchains stood at $660 million (excluding wash trading), up 5.6% from the previous month. Meanwhile, floor prices of most bluechip NFT projects were down by an average of 9.3%, except for Pudgy Penguins and Azuki, both of which saw an increases in FP.
NFT volumes across major chains grew slightly over the month compared to previous months among top chains (Ethereum, Bitcoin, Solana, Polygon and Immutable X) . This month, we had the Bitcoin blockchain entering our NFT market tracking list which largely caused the increased overall volumes. The development of the BRC20 standard and the influx of Meme currencies onto the blockchain in May gave the impression that the buzz surrounding Bitcoin ordinals wouldn’t be abating anytime soon.
Along with this hype-filled speculating, the trading of Bitcoin NFT (media-based ordinals) also increased, with the month’s trading volume reaching $196 million, an astounding increase of 493% month over month. The chain has witnessed the growth of numerous organic communities, such as Space Pepes, and the expansion of existing Ethereum-based collections to Bitcoin. With this increased interest, Ethereum’s volume domination has fallen to 54%, with Bitcoin coming in second at 29% and Solana coming in third at 6.8%.
Moving on to the second significant development for the month, Blend, an NFT lending protocol developed by Blur, was introduced in May. The peer-to-peer perpetual lending protocol allows borrowers to purchase NFTs at the fraction of the cost, while the lenders on the other end provide attractive lending terms largely due to the increased blur point that lenders can earn.
This has caused a large number of lending activity on the platform, with lots of traders getting loans at 0% interest just to flip NFTs over the short term. In just one month since its launch, Blend has surpassed the majority of competing lending protocols and dominated the NFT market with over 20,000 loans and 170,000 ETH volumes. Overall, these 2 key narratives drove a lot of NFT activity in the market throughout May.
In terms of funding, the NFT sector attracted $49 million in funding, up 62.5% MoM. Largest funding amounts over the month went to Alienswap and Tabi, raising $12 million and $10 million in funding, respectively.
NFT Recent Developments
Sotheby’s launches on-chain secondary NFT marketplace (CoinDesk). The artist first peer to peer marketplace aims to rotate featured artists every few months curated by Sotheby’s specialists.
Blur launches its NFT lender, Blend and sees volumes reach $225 million in less than a month (TheBlock). The newly released product by Blur stands out and has taken over 85% of all NFT lending volumes by charging no fees with no loan expiries.
Pudgy Penguins toys debuts on Amazon with $500,000 in Sales and over 200,000 toys sold (Blockworks). The toys range from stuffed penguins to figurines with QR codes that give them access to the Pudgy world, which allows trading of NFT through email sign up.
Tessara and Escher will cease all operations and would slowly begin winding down (NFTNow). The NFT fractional ownership platform (prev Fractional Art) and NFT marketplace will be closing after carefully analyzing possible market scenarios.
Tensor snatched Magic Eden’s Solana crown with Mad lads helping to push the marketplace on top (Decrypt). The marketplace has used a strategy of using marketplace fees to buy up the floor of Mad lads and raffle them away to top traders.
Japan’s largest Airline group ANA launched its very own NFT marketplace (CoinDesk). The Nippon Airlines marketplace features aviation photography and digital collectable on Ethereum, with the company working on a Metaverse travel experience.
Adidas and Pharrell Williams release Digital clothing for Doodles NFT holders (Decrypt). The Ethereum PFP project expanded to fully customizable avatars along with an upcoming airdrop for a Pharrell Pack.
LG Electronics seeks patent for TV which lets users to trade NFTs (Coindesk). The device would be able to establish connection with an NFT market server, receive and display preview artwork and fulfil purchases with users cryptocurrency wallet.
Monthly NFT Stats
NFT Funding
2. Web3 Gaming Overview
The Web3 gaming industry had a reasonably good month in May as several titles achieved key milestones during the month. The average Daily Active Wallet (DAW) interactions among games increased to 709,293, an 8.7% month-over-month increase.
The gaming industry had tremendous news, particularly on the front of mobile gaming. 2 major games integrated with app store and apple pay. Stepn announced its apple pay integration, allowing users to purchase digital assets right from the app. While some might just oversee it as a small integrations with apple pay, this has far-reaching impacts on the web3 gaming sector. This could be a smart tactic to employ as many web3 game developers and businesses have been attempting to figure out a workable way to get around the iOS rules.
With this integration by Stepn, users can purchase a new in-game currency called sparks and utilise them to purchase NFT sneakers directly on the app. It’s important to keep in mind that due to Apple’s fees for in-app purchases, NFTs are more expensive than when bought in other ways.
Stepn wasn’t the only game to make its move on the iOS gaming space. Axie Infinity launched Origins, its card based strategy game on the App store in May. Since the inception of the Axie Infinity game, this is its first entry into the iOS gaming market. Gamers in select regions in LATAM and Asia will be able to purchase Axie NFTs outside the application and play with those NFTs on it.
Sky Mavis has been working with Apple to get the game on the app stores for about a year and the team is hopeful on adding in-app purchases for NFTs in the future. In what was regarded as a steady month for the gaming industry, these are two of the more encouraging news. The month also has a lot to offer in terms of the mints and alpha/beta releases of games of the highest calibre.
On the funding end, the gaming sector saw a significant drop in funding amounts compared to April. We saw a funding inflow of $42.2 million over the month, down 44% in May. The largest funding amounts went to Pomerium and Illuvium, drawing in $20 million and $10 million in funding, respectively.
Gaming Recent Developments
South Korean Game Publisher Neowiz launches a $10 million accelerator program with Polygon Labs through gaming subsidiary Intella X (Decrypt). The grant program will give game developers the opportunity and means for more great games to be build on polygon.
Social App Line reveals five gamer first NFT games that are releasing in 2023 on its own Web3 gaming platform (Decrypt). The Web3 gaming platform is based on Line Next’s global NFT platform DOSI, providing games that allow users to own and trade digital goods.
Popular gaming move-to-earn platform, Stepn integrates with Apple Pay (Inside Bitcoins). It is the first blockchain gaming application to have such an integration, breaking barrier to entry.
Axie Infinity Origins game launches on the Apple App Store in key regions (Coindesk). Players will be able to utilise their NFTs purchased outside of the apps store on the application.
Ubisoft creates smart collectables of highly popular open world franchise Assassins Creed on the Polygon network (Decrypt).
PancakeSwap launches tower defense game with native token rewards (Decrypt). The platform collaborated with Mobox to deliver a fun and exceptional game experience.
MechaFightClub Game development stalled by US regulatory uncertainty (Blockzeit). The team announced an indefinite hibernation and cited that the game may resurface in the future but in a different form.
Gala Games burns over $600 million worth of GALA tokens after completing its V2 airdrop (Decrypt). These tokens were received as ecosystem rewards over the years and were burned to reduce concern among holders of a mass sell off.
Layer 1 blockchain Sui launches its mainnet and has become home for over 40 games as its technical advantages appeal game developers (Decrypt)
Monthly Gaming Stats
Gaming Funding
3. Metaverse Overview
The Metaverse sector demonstrated a modest performance in May. Monthly Metaverse parcel sales volumes stood at $7.4 million, down 76.8% MoM. However, the space was uplifted with lots of the activity coming from the east, along with some positive partnerships for the space.
The month was all about China and the country’s focus on the web3 sector, most accurately the Metaverse space. Over the month we saw multiple announcements for the Metaverse, starting with a couple of Chinese cities announcing Metaverse action plans. The city of Zhengzhou set out policy proposals that are aimed at supporting Metaverse companies, with plans to establish a $1.4 billion fund dedicated to the industry. Along with these plans, the city would also provide up to $28.34 million in subsidies to companies relocating there, which appears to be an effective strategy for drawing talent and technology to their area.
China’s Nanjing city also announced a state backed Metaverse entity to consolidate resources of academic institutions and enterprises in China and bolster research efforts relating to the Metaverse. Meanwhile, there was also news that Beijing announced its web3 whitepaper that focused heavily on the Metaverse evolving beyond just entertainment. These advancements just from the news side of things seems extremely positive for the Metaverse sector and shows the commitment towards metaverse advancements and the industry.
Apart from these announcements, Alibaba Cloud had partnered with Avalanche that will provide clients with their own metaverse space on the blockchain. The partnership has profound effects on the enterprise adoption of the Metaverse and puts on a massive onboarding ease for large organizations. Overall, a great month for the metaverse markets coming from the East.
On the decentralised metaverse front, the interest for almost all Metaverses dropped in May. NFT worlds rebranded to Topia, setting its sights on creating a platform that rivals Minecraft and Roblox. In terms of funding, Metaverse Funding dropped 78% from the previous month. The largest funding amounts went to Burgercities and Metazone, drawing in $4 million and $3 million respectively.
Metaverse Recent Developments
China betting big on the Metaverse as Zhengzhou joins with $8.5 Billion fund (NFTgators). The Henan province capital announced a strategic plan to support metaverse companies operating within its jurisdiction and intends to launch a $1.4 billion fund initially.
Chinese state owned investment group, Henan Cultural Tourism group, sets up a $22 million private equity fund to finance Metaverse ventures (Forkast). The fund was formed in April and aims to integrate resource in culture and tourism industy and Metaverse
Hong Kong Police Force launches new Metaverse platform (Cointelgraph). The platform launched to promote crime prevention in the Metaverse and to educate public on the dangers associated with Web3 and the Metaverse.
Alibaba and Avalanche partner to deploy Metaverses on the Blockchain (Techcrunch). The partnership will provide Alibaba’s clients with a launchpad that aims to help businesses customize, launch and maintain their own Metaverse spaces on the blockchain.
Popular decentralised metaverse world NFT Worlds rebrands itself to Topia (PlaytoEarn) Topia plans to create its own sidechain and airdropped a copy of worlds in a new version.
Lego and Epic games to create safe and fun Metaverse for kids (NFT News). The goal of the partnership is to construct a family-friendly Metaverse that is enjoyable for users of all ages.
Monthly Metaverse Stats
Metaverse Funding
May Crypto Fundraising
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.
Our experience & global network allows us to be at the forefront of changing narratives in crypto such as NFT, Gaming, Metaverse, L1s and L2s, along with advancements in blockchain protocol technologies by conducting thorough research on the “next big things” while managing risk with proper licenses, audits, compliance and security management. Have an interesting idea for partnership or working on a startup?
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