Monthly Comprehensive Report that Summarises all Major Trends, Developments and Funding across the Metaverse, NFT and Web3 Gaming Space

1. NFT Overview

From the initial tumble of ETH prices in the month to the large-scale liquidation crisis among bluechips, August has turned out to be a rough and tumultuous month for NFT markets. Investors experienced a feeling of Déjà vu in the middle of the month as the NFT liquidity crisis unfolded, reminding them of the familiar feeling of fear and uncertainty from a couple of months ago.

Nansen’s NFT bluechip index, which tracks the price action for notable NFT collections, fell by 12.8%; while the NFT volumes on Ethereum dropped to $496 Million, the lowest seen since August 2021. The markets were primarily weighed down with panic and uncertainty as floor prices of bluechips tumbled over the month, causing a liquidation crisis in NFT lending protocol, BendDAO. While not extreme in terms of cascading liquidations, the crisis had posed a difficult situation for the protocol in terms of accumulation of bad debts, which was later resolved with swift governance proposals by the team.

Despite the gloom in overall NFT markets, Sudoswap has been one of the biggest winners and success stories in the NFT sector in the month of August. The AMM-style marketplace has been drawing in tremendous volumes and has become an instant hit among NFT traders. Sudoswap’s trading volumes grew a record 1,686% in the span of a month in ETH terms. The platform also offers sales with zero royalties, which has created a debate of its own in terms of rewarding creators. In contrast to popular marketplaces like Opensea and LooksRare that has a percentage of sales as royalties and marketplace fees, only 0.5% fees is charged on Sudoswap — which could also explain the protocols meteoric rise.

In terms of funding in the NFT markets, the sector logged in $336 million for August, up 75% from the previous month. Largest funding amounts went to Barca Studios and, raking in $100 million and $50 million, respectively.

NFT Recent Developments

  • Tiffany launches NFTiff, a service that turns NFTs into custom jewelry (Tweet). Tiffany & Co unveiled and sold 250 NFTs to Cryptopunk holders as part of the NFTiff service for $50,000 each, making a total of $12.5 million.
  • Telegram founder considering NFT-like smart contracts for usernames (Cointelegraph). This idea was floated after domain name auctions were a success at TON, a layer 1 blockchain that was designed by the team at Telegram.
  • Moonbirds team receives criticism after receding commercial rights. Founder of Moonbirds and Oddities moved the project to CC0 public licensing, leading to an extended debate on Twitter about project licensing.
  • Cryptopunks floor briefly over BAYC. Cryptopunks floor briefly passed the Bored Ape floor for the first time since March, when Yuga labs acquired rights to Cryptopunks.
  • Cryptopunks and Meebits holders finally get Intellectual Property (IP) rights. Yuga labs has released IP rights for both the collections, allowing holders to use their NFTs in personal and commercial settings
  • Panic unfolded at BendDAO as liquidations rose. A series of blue-chip NFTs underwent liquidations which caused concerns of cascading liquidations. The protocol passed an emergency vote that stabilized the situation.
  • Sudorare disappears with 519 ETH in user’s funds (Theblock). The NFT marketplace was a combined fork of Sudoswap and Looksrare, where users staked native token SR to receive trading fees on the platform — only for it to disappear with 800k in users’ funds.
  • Largest sales in multiple bluechip collections in August. Despite the bleak market conditions, many collections experienced their largest sales since launching. Xcopy’s Don’t Panic sold for 500 ETH, Pudgy Penguins for 400 ETH, Mutant Ape for 2,300 ETH and Chromie Squiggle for 150 ETH
  • Meta adds Ethereum, Polygon, Flow NFT Cross-Posting Between Facebook and Instagram (Decrypt)

Monthly NFT Stats

NFT Monthly Volumes on Ethereum (Source: CryptoSlam)
Bluechip Price Comparison over the month
Sudoswap NFT Volumes (Source: Dune Analytics, 0xRob)
NFT Revenues for Brands (Dune Analytics, Kingjames23)

NFT Fundraises

Web3 Gaming Overview

Web3 gaming has had a tremendous month in August, bound by constant gamer count across blockchains and a good number of gaming-specific blockchain deliverables. Average daily unique gamers for August stood at 856,000, with Web3 gaming continuing to dominate all other blockchain sectors in terms of daily unique users.

The launch of gaming-focused Arbitrum Nova and Myria chains were by far the biggest highlights in the gaming sector in August. Both these layer-2 solutions are Ethereum-based and have the ability to improve scaling and reduce fees for gaming applications in the near future. Apart from this positive news in the gaming markets, a new model in Web3 gaming called ‘Free-to-own’ emerged, as news of Limit Break’s $200 million funding round caught everyone’s attention. The free-to-own model revolves around selling assets for free to begin with and cultivating a sense of ownership within the community. Floor price of the game’s first free NFT mint, Digidaigaku, was up over 100% and hit a peak of 15.9 ETH.

On the funding end, Web3 gaming has surpassed previous months funding amounts by a small margin. Funding for August stood at $229 Million, up 2% from the previous month. Largest funding deals for the month were marked by Gunzilla Games, Animoca Brands KK, and Xterio drawing in $46 million, $45 million, and $40 million respectively.

Gaming Recent Developments

  • Gaming-focused Ethereum Layer-2 solution Myria goes live (Announcement). The layer-2 solution uses ZKrollups in partnership with Starkware and has multiple games in the pipeline.
  • Arbitrum launches Nova Chain, an application-focused Layer-2 (Tweet). The chain is built on Arbitrum’s AnyTrust technology and is specific to social and gaming applications that require low fees and large transaction volumes.
  • Animoca Brands’ Japan raises $45 Million (Announcement). Japanese strategic subsidiary of Animoca brands raised $45 million at a $500 million valuation from Animoca Corporation and Japan’s largest bank, MUFG. The funding will be used to secure licenses to popular IP’s and promote Web3 adoption.
  • DeFi Kingdom abandons Harmony for Klaytn (Tweet). One of the most played blockchain games to date leaves the harmony blockchain for Klaytn, a Korean metaverse-focused chain. Harmony has been struggling to recover since the $100 million bridge hack in June and has now lost its biggest dapp.
  • Axie Infinity launches season 0 of Axie Infinity Origin (Article). Origin is the rebranded version of the play-to-earn game with a new economy and SLP production shift focusing on utility.
  • Highly-anticipated gaming project, Ragnarok, experiences financial woes and criticism (Cointelegraph). The game brought in $15.5 million from NFT sales in April but the CEO has splurged on salaries and lost 12% through trading.
  • Enjin launches Unreal Engine Software development Kit (SDK) (Announcement). The new integration will allow UE developers to easily integrate NFT’s into games.
  • 40% of gamers in the U.S., U.K., & Indonesia Are Interested in Trying Blockchain Games, but There Are Barriers to Overcome First (Report)

Web3 Gaming Stats

Unique Daily Users (Source: Footprint Analytics)
Games Categorised by chains (Source: Footprint Analytics)
Top played games (Footprint Analytics)
Game Volumes (Footprint Analytics)

Web3 Gaming Fundraises

Metaverse Overview

August turned out to be an extremely difficult month for Metaverse markets. The Metaverse Index, which tracks the price action of metaverse tokens was down 24.4%; while the Nansen Metaverse-20 index which tracks price of Metaverse assets was down 28%.

Focus was placed on the land prices of Sandbox and Decentraland, two of the premier Metaverses in the blockchain space whose prices have dropped 77% and 64% from their peak this year. Hype of the Otherside has also died down significantly after last months testing, but the Metaverse still remains the popular choice among investors looking to invest in the space. According to Metaverse analytics platform, Metacat, the Otherside Metaverse made up 6 of 10 land parcel purchases and 75% of the total Metaverse land purchase volume in August.

Despite the concerns in price action and trading volumes, traditional companies have been continuing their obsession with virtual worlds and the Metaverse. August saw multiple large corporations and brands venturing out into the metaverse, some of which include Taco bell, Hells Kitchen, Unilever and Netflix. In terms of funding in the space, Metaverse projects have raised a total of $158 million in capital, an increase of 137% from July. Biggest funding amounts went to Ready Player Me and Inworld, drawing in $56 Million and $50 Million in Funding.

Metaverse Recent Developments

  • Meta raises $10 billion in bond offering for the first time. The capital, among other things, will be used to fund its metaverse and virtual reality focus based on facebook’s business revamp in October 2021.
  • Nvidia increases focus on the Metaverse with new developer tools (Announcement). The GPU manufacturer announced the expansion & upgrades of NVIDIA Omniverse kit and apps to enhance building accurate twins and realistic avatars.
  • Decentraland hosts its third-annual Metaverse Art Week. The five-day event from 24–28 Aug showcased curated art from brands like Sotheby’s and Opensea in the metaverse.
  • Invesco announces $30 million metaverse-themed fund (Decrypt). The global asset manager will invest in interrelated sectors that will facilitate, create or benefit from the growth of virtual worlds.
  • Beijing announces a two-year metaverse development plan (Announcement). The plan requires all districts to build technological infrastructure and promote its use in fields including education and tourism.
  • MTV VMA embraces the Metaverse this year. VMA’s introduced a brand new category of award called ‘Best Metaverse Performance’, while Snoop Dogg and Eminem performed as Bored Apes on the Otherside Metaverse (Video)

Metaverse Monthly Stats

Floor price of Decentraland and Sandbox Land Parcels
Metaverse Parcel Sales Numbers (Metacat)

Brands that entered the Metaverse in August

Metaverse Funding Rounds

About Rising Capital

Rising Capital is a Singapore head-quartered ‘Digital Assets Asset Management’ firm focussed on early stage blockchain investments (Rising Funds) and venture building studio (Rising Studios) in South & South East 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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