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Cryptos are diving, but blockchain games aren’t

Representational image.

Representational image. | Photo Credit: Reuters

Cryptocurrencies are falling as investors dump their digital assets. The sell-off has pushed Bitcoin to below $30,000. The largest cryptocurrency was trading at $29,653 on Monday, and other tokens like Ether is also losing its value.

The sell-off isn’t limited to the world of cryptos. The broader equities market is also under pressure as investors weigh the latest signs of economic malaise, particularly in the US and China. This, and the added pressure of tighter monetary policy is making investors steer away from risky assets like cryptocurrencies.

For the digital assets, the drop in their value is a result of TerraUSD debacle. The stablecoin has lost more than $3 billion in cryptocurrency reserves after its efforts to peg the digital asset to the dollar failed last week.

The Luna Foundation Guard, the entity set up by Terraform Labs to maintain TerraUSD’s peg to the dollar, used up roughly $2.9 billion in crypto reserves since May 7 trying to stabilize the token, according to a Bloomberg report.

While the digital currencies are facing a bear market, the technology underpinning cryptos is pushing another part of the segment.

Blockchain games are thriving despite cryptocurrency price drop. And this market is showing an appetite for play-to-earn games that run on certain blockchains.

According to a report by DappRadar, Wax, BNB Chain, and Solana dominate the blockchain people use for gaming. These decentralised ledgers are cheaper and faster than Ethereum, and have become home to some of the most used decentralised app (dapp) games in the industry.

And now as cryptocurrencies enter bear market, those same dapps continue to drive blockchain usage and keep the outlook for decentralized applications positive, the report noted.

The report indicates gaming on blockchains drives over 50% of blockchain application usage. “Amidst the recent price slump, it had been expected that dapp usage might also falter. Instead, we see the opposite,” the web service noted.


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Printable version | May 18, 2022 12:51:32 am | https://www.thehindu.com/sci-tech/technology/cryptos-are-diving-but-blockchain-games-arent/article65422775.ece