Metaverse, DeFi, Future of Finance, Coins Hit Hard by Crypto Crash

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Cryptocurrencies linked to projects dedicated to the Metaverse have been hit hard by the current crypto crash which has wiped out over $1.2 trillion from the digital currency market since November.

It has also been a rout for native coins tied to decentralized finance (DeFi) projects, which are supposed to be the future of financial services. Most DeFi projects want to cut out middlemen.

Prices for Decentraland and The Sandbox, two platforms leading the campaign to make virtual earth a scarce commodity, have crashed from their November highs.

Mana, Decentraland’s native token, fell 15% over a seven-day period. The price is now down 61.7% from its November 25 high. A decentralized virtual reality platform powered by Ethereum, Decentraland allows users to purchase virtual plots of land to create and monetize content as more users move into the online space.

The Sandbox saw its price fall by 13.1%, while its market capitalization also collapsed by 59.3% from its peak on November 25. The Sandbox is built around blockchain and non-fungible token technology (NFT). It’s all about ownership and wants to allow players to monetize in-game resources, a key part of the metaverse.

The losses are greater for Axie Infinity, an online NFT-based video game, which uses Ethereum-based cryptocurrencies. The platform is one of the fastest growing play-to-earn games in the world. Its market capitalization has fallen by 72.5% since November 11. The price is down over 34.7% in the past seven days.

Repeated Incidents, Hacks

The frenzy around these platforms seems to be fading as investors realize that the world portrayed with a lot of buzz and marketing may still be a long way off.

The Metaverse is an alternate digital reality that has received a lot of attention. Humans will interact through three-dimensional avatars that can be controlled through virtual reality headsets.

Through the metaverse, users can participate in virtual activities such as games, virtual concerts, or live sports. The concept got a huge shock when social media giant Facebook changed its name to Meta Platforms (FB) – Get Meta Platforms Inc. Class A Report.

But critics have warned that the Metaverse is becoming extremely overhyped, and companies are applying the tag to any old project involving games, VR or NFTs.

It’s an almost identical story for DeFi, seen as a great way for investors to bet on the potential real-world utility of blockchain technology.

Chainlink, an Ethereum-based oracle network designed to improve smart contracts by automatically feeding real-world data into online systems (e.g. notifying an insurance company when an accident has occurred) , has fallen 22.3% in the past few days. . It has lost more than 70.1% of its market value since its May high.

Avalanche, which is popular with companies looking to streamline contracts, is down more than 55% since November, while Solana, dubbed the Visa of crypto, is down 65.1 from its all-time high.

Aave, which allows users to lend digital assets through pools of liquidity in exchange for interest that varies with demand, has fallen nearly 80% from its all-time high, while Cardano, which lets you to send and receive its token or transfer it in exchange for goods and services, saw its market value drop by 67%.

Uniswap, which allows users to trade crypto tokens without having to go through an intermediary, is down 77% from its all-time high in May.

Apart from the general skepticism surrounding the cryptocurrency sphere, DeFi also suffers from repeated incidents and hacks on some platforms.

For example, Solana was recently hit by a “network instability” incident that disrupted transactions last week.

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