Metaverse, NFT Tokens Take Hit as Crypto Market Battles Bears

Several gaming- and NFT-adjacent cryptocurrencies including The Sandbox (SAND), Axie Infinity (AXS), Decentralannd (MANA), and Gala (GALA) have suffered heavy losses in the past 24 hours.

SAND, the native token of the metaverse platform, shed 9% of its value over the past day and is currently trading at $1.28 according to data from CoinMarketCap. 

The token is the market’s 41st-largest with a market capitalization of $1.5 billion. Today's bearish action now puts the token down 84% from its all-time high of $8.44 recorded in November 2021.

Elsewhere, AXS, the token powering the popular play-to-earn game Axie Infinity, has dropped nearly 8% over the past 24 hours.

AXS hits an all-time high of $165.37 in November 2021 which is down 87% and currently trading at $20.95, according to data from CoinMarketCap.

As for Decentraland's native token, MANA is also treading water, down nearly 9% over the past day. MANA is the in-game currency, letting holders buy wearables for their avatars or for acquiring NFT-based LAND tokens within the game.

GALA, the 82nd-largest cryptocurrency with a market capitalization of $561 million, has also shed 8.23% over the past 24 hours. GALA is the native token of the NFT gaming ecosystem Gala.

The token is currently changing hands at $0.08 apiece, down 90% from its all-time high of $0.8367 recorded in November 2021, according to data from CoinMarketCap.

What’s driving the gaming tokens crash?

The primary driver behind today’s price action is likely the drop in NFT trading volume over the past week.

The trading volume on the NFT marketplace, the largest market of its kind, has plummeted to levels before January 2021, according to data from Dune Analytics.

According to data analytics platform Nansen, revenues for Axie Infinity have also been dropping over the past six months. Axie Infinity reported just $5,500 in daily revenue from breeding and marketplace fees, down 99% from all-time highs of $17.5 million per day recorded in August 2021.

Axie Infinity generates revenue through marketplace fees and breeding fees. A breeding fee of 0.5 AXS is charged whenever a new Axie creature is created, and a marketplace fee of 5.25% charges whenever Axies are traded.

For Sandbox, the overall secondary market land sales are down 54% in Q1 2022 compared to Q4 2021. Sandbox is a virtual real estate platform that allows users to purchase digital plots of land as NFTs.

Despite an increasing user base of more than 2 million users, Sandbox finds it difficult to retain users within the platform. It’s reported that only 7% of the users hold the purchased lands in the Sandbox for more than one year, suggesting user concerns around the long-term interest in digital real estate.

Roughly 10% of users sell their NFTs in the sandbox within the first 30 days of purchase, and 72% of them have held on to their NFTs for a period of one to three months.

With waning interest in play-to-earn games, GALA has also been hit badly over the past six months. 

The trading activity of Town Star, an NFT collection by GALA games, is down to just above 11 Ethereum a day from an all-time high of 601.56 Ethereum recorded on December 24, 2021.

Meanwhile, Bitcoin is down 3.38% over the past 24 hours and is currently trading at  $29,275. Ethereum is changing hands at $1.968, a 4.43% drop over the past 24 hours.