According to the new report, the NFT market may be able to decouple with financial markets just as art has been separated from the S&P 500. Flagging market and The Terra crash in may did not spare decentralized apps, but DappRadar’s new report shows that the ecosystem is already showing signs of recovery.
According to the report, the number of daily active wallets that interacted dApps declined to 2.2million last month, a drop of 5% over April. This is the lowest figure this year, but 32% more than in May 2021.
Bad-but-better-than-last-year seemed to be a theme across dApp categories, with NFTs and gaming having fared the best.
The overall NFT market volume dropped by 45% to $10 Billion, from $18 Billion in April. This was due in part to the rough month for blue-chip collections.
Bored Ape Yacht Club (BAYC), for example, saw its floor price drop 38% in May from 150 Ethereum to 95 Ethereum. The loss was a boon to newer collections such as Otherdeeds and land parcels for BAYC’s metaverse game. Goblintown has traded $31 million since its launch.
“What we are seeing right now is part the evolution of NFT market where new collection with intriguing factors are getting lots of attention, draining liquidity for other projects and appraising ourselves,” Pedro Herrara, senior blockchain analyst at Dapp Radar told decrypt. “This is the case with Goblintown, Otherside, and recently launched We all are going to die.”
DappRadar stated that NFTs feel like assets that could be decoupled from financial markets at one point. He made the comparison to the fact the Artprice100 Index dropped only 26% during 2008’s Great Recession, while the S&P 500 lost 56%.
Green shoots with crypto gaming
The flow of venture capital into gaming is the biggest bright spot.
Dapper Labs launched a 725 million fund in order to grow its Flow ecosystem. Andreessen Horowitz’s a16z launched their GAMES FINDER ONE which will invest $600 millions in the metaverse gaming market.
DappRadar stated that DeFi was hit the most by all the market turmoil. Although the total value locked (TVL), across DeFi apps fell by 45%, it was still up 11% when compared to last year.
According to the report, Polygon and Near, Optimism and Arbitrum are poised for market share as Terra apps leave the Terra ecosystem.
Justin Sun’s Tron (TRX) was the only DappRadar track to see growth in May. It had increased its TVL 47%.
Tron’s -like USDD algorithmic stablecoin reached a market capitalization of $603 million by the end of May. According to CoinMarketCap, it has already added $100 million, bringing the total market cap to $703 million.