The number of active users in the Decentraland and The Sandbox metaverses has dropped massively, according to DappRadar statistics.
The two platforms had less than 4,000 unique active wallets in the past 30 days, while the floor prices of non-fungible tokens (NFTs) in the ecosystems have also retreated.
A shift in focus
According to an Invezz report, most of the flagship metaverse platforms have experienced a decline in users and tokens, which have fallen by double digits.
Companies that have been propelling the metaverse, like Meta, which rebranded from Facebook in line with the strategic plan of creating a metaverse, have since shifted focus from the metaverse to language models as generative AI becomes more popular with the launch of OpenAI’s ChatGPT in November last year.
Two of the biggest players in the metaverse, The Sandbox and Decentraland, have seen users drop while their tokens have also nose-dived.
Currently, Sandbox’s SAND has a market capitalization of $536 million, while Axie Infinity’s AXS token has a market value of $599 million, which is a sharp decline from the billions of dollars they were previously worth.
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Depressed activity
Data from DappRadar shows that the number of users on the platforms has gone down significantly. During the past 30 days up to the time of writing this article, Decentraland had 3,860 unique active wallets (UAW), a 108% jump from the previous month. With 72,800 transactions in the network, this was 63% higher, while the balance on its smart contracts fell to $15 million.
It was almost the same script in The Sandbox, if not worse, as UAW went down 26%, with the number of transactions in the smart contract retreating by 15% to 2,790.
According to Invezz, one would “expect activity on platforms valued at over $500 to be higher than that.”
Slow demand
In the meantime, the floor price of NFT sales in The Sandbox and Decentraland has been on a downward trend after peaking earlier in the year. The floor price is defined as the lowest price of an NFT at any given time. As such, according to Invezz, a “lower price is a sign that demand is a bit limited.”
According to the Invezz report, there is one possible reason for the decline in The Sandbox and Decentraland, which is because their native tokens have gone down.
As of Sept. 14, the price of MANA was pegged at $0.28, which was 95% below its all-time high. In the same manner, the SAND token was trading at an all-time low of $0.28, which was 80% below its peak.
Likewise, users who bought NFTs in these ecosystems or those who won rewards have also seen their values take a dip.
According to the same Invezz report, it follows therefore that the performance of blockchain applications imitates in most cases the performance of cryptocurrencies. They perform well when cryptocurrencies are rising, and vice versa.
For instance, the total value locked (TVL) in decentralized applications (dApps), which are part of the decentralized finance (DeFi) ecosystem, dropped when crypto prices went down, while Bored Ape Yacht Club (BAYC) went down as the price of ether (ETH), the native asset that oversees all transactions on the Ethereum Network, fell.
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