Decentraland.

3 reasons why the MANA and SAND metaverse token rally could end soon

Apple’s rumored VR headset launch appeared to fuel a sharp rally in metaverse tokens, but data suggests that the momentum is unsustainable.

The metaverse hype that began in 2021 dissolved almost entirely by the end of 2022 as the top projects in the space, Decentraland and The Sandbox, lost 95% of their market capitalization. The most prominent reason for the fall was a lack of user growth.

Still, the metaverse narrative is far from dead and will grow in the future. Reportedly, Apple will launch its virtual reality gear sometime in spring 2023. The announcement was a positive catalyst for Decentraland’s MANA and The Sandbox’s SAND, causing a double-digit price surge.

While there’s evidence of positive buying volume supporting the pump, the weak fundamentals of metaverse platforms and overheated market indicators suggest that the price pump risks reversing quickly.

The Apple pump-and-dump

Facebook’s (Meta) foray into the metaverse was one of the most prominent catalysts for metaverse tokens. The idea for Decentraland’s and The Sandbox’s growth is that a decentralized metaverse would flourish more than Meta’s centralized version.

However, the technology has yet to become popular among the masses. In 2022, the percentage of VR users among Steam gamers was less than 2%, and the usage has yet to grow over the past two years. This is discouraging for the technology’s adoption because the gaming sector was the first to embrace it.

The technology suffers from a fundamental issue where VR headsets are unsuitable for long hours. Studies have found that prolonged usage of headsets can cause mental health problems.

Apple’s recent VR news caused an uptick in metaverse tokens, but it doesn’t necessarily translate to the success of these projects. Samsung and Oculus, owned by Meta, already have devices on the market, raising the question about the potential impact of Apple’s new devices on VR adoption.

Poor usage data hinders the reality of a sustained metaverse token rally

Arguably, metaverse euphoria peaked in the last quarter of the same year when Facebook rebranded to Meta. However, the usage statistics of the two most popular metaverse platforms, The Sandbox and Decentraland, remained unimpressive throughout the price surge. Fewer than 5,000 unique active wallets (UAWs) were interacting with the smart contracts at the peak on both platforms.

The Sandbox unique wallet addresses interacting with a decentralized application’s smart contracts. Source: *DappRadar*

Decentraland unique wallet addresses interacting with a decentralized application’s smart contracts. Source: *DappRadar*

Since then, the usage has decreased even further, with fewer than 1,000 UAWs per day, reflecting terrible fundamentals.

Moreover, while the token prices have jumped, the nonfungible token sales for The Sandbox lands haven’t improved with similar prices and volume since the last quarter of 2022. It once again confirms that activity across the platform is uneventful.

Token dilution risks remain

Decentraland is also on the creditor list of Genesis, which filed for bankruptcy last week. According to the court filings, the defunct lending firm owes Decentraland $55 million.

However, according to Decentraland’s Discord, Genesis owes only $7.8 million. A community spokesperson added, “The Treasury remains healthy and the credit amount does not represent a substantial part of the Foundation’s treasury.”

The Genesis issue has been long known; thus, it’s possible that the organization might have dissolved the issue by now. However, it will likely affect the pace of its ecosystem growth, which is small to begin with.

On the other hand, the SAND token suffers from the risk of dilution due to monthly unlocks until the end of Q3 2024. If market conditions do not improve, some investors may be inclined to sell their portion of the tokens.

Despite its shortcomings, as long as there’s a possibility that the technology will become a part of the future, the market is continually going to appreciate the first movers in the space. The problem is long-term visions may not sustain short- to medium-term rallies.

MANA/USD daily price chart. Source: TradingView

The sudden spike after days of low volatility has caused the Relative Strength Index (RSI) metric to show overheated readings. The situation has become more challenging, as the price has been trading at resistance from the breakdown region of the FTX collapse.

Nansen data shows exchange inflows for MANA and SAND were $8.4 million and $12.6 million, respectively. It suggests that more investors moved to sell than buy into a positive breakout.

Nevertheless, the recent uptick in MANA was supported by healthy volume, as reported by data from analytics firm Santiment, which is encouraging for buyers. But MANA/USD must take out the $0.735 resistance and support area for continued upside.

SAND/USD daily price chart. Source: TradingView

A similar trading set-up for SAND sees resistance for the token at around $0.93. If buyers conquer this level for the metaverse tokens, we can expect the rally to continue. However, based on fundamentals and short-term risks, it remains unlikely that the price can break above the resistance.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

Bitcoin could take a break from its sharp rally and if its price bounces off underlying support, APE, MANA, AAVE and FIL could break out.

After nearly a 20% rally last week, Bitcoin (BTC) is on track to end this week with gains of roughly 10%. Bitcoin’s rally has improved sentiment and attracted buying in several altcoins. This sent the total crypto market capitalization firmly above the $1 trillion mark.

The strong recovery in Bitcoin has startled several analysts who remain skeptical about the rally. Some believe that the current rise is a dead cat bounce that will reverse direction sharply, while others see similarities between the current rally and the 2018 bear market recovery.

*Crypto market data daily view. Source:* *Coin360*

Although traders should be ready for any eventuality, the pace of the rise in Bitcoin does point to a possible major bottom. There are likely to be bumps down the road but the dips are likely to be aggressively purchased by traders.

Bitcoin’s sustained recovery may encourage buying in select altcoins.

Let’s study the charts of Bitcoin and select altcoins that are showing strength in the near term.

BTC/USDT

Bitcoin climbed above the $21,650 overhead resistance on Jan. 20, indicating the resumption of the up-move. This shows that demand remains strong at higher levels.

The bulls pushed the price above the $22,800 resistance on Jan. 21 but failed to build upon the breakout as seen from the long wick on the day’s candlestick.

While the upsloping moving averages indicate that bulls are in command, the relative strength index (RSI) in the overbought territory warrants caution. It suggests that a few days of consolidation or minor correction is possible.

However, when a new uptrend starts, the RSI sometimes tends to remain in the overbought zone and frustrates the bears. If that happens, the uptrend may continue without a major pullback and the pair could reach $25,211.

On the downside, the first support is at $21,480. If the price rebounds off this level, it will suggest that the bulls are buying on every minor dip. That could increase the likelihood of a rally to $25,211.

*BTC/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows that the bulls are trying to flip the $22,800 level into support. If the price continues higher and soars above $23,271, the bullish momentum could pick up and the pair may rush toward $25,211.

If the price turns down and breaks below $22,600, the pair could slide to the 20- day exponential moving average (EMA). This level may act as a support but if bears manage to pull the price below it, the next stop could be $21,480.

APE/USDT

ApeCoin (APE) has been range-bound between $7.80 and $3 for the past several months. After the bears failed to sink the price below the range, the bulls are attempting a comeback. They will try to propel the price to the resistance of the range.

The upsloping moving averages and the RSI in the overbought area suggest that buyers have the upper hand. There is a minor resistance near $6.40 but if buyers bulldoze their way through it, the APE/USDT pair could surge to $7.80. This level may witness aggressive selling by the bears.

The positive view could invalidate in the near term if the price turns down and breaks below the 20-day EMA ($4.80). That could sink the price to the 50-day simple moving average ($4.17).

*APE/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows that the pair is in a strong uptrend. The bears are trying to stall the up-move at $6 but a positive sign is that the bulls have not given up much ground. This indicates that every minor dip is being purchased. The bulls will now try to propel the price above $6 and resume the uptrend.

On the contrary, the bears will try to pull the price below the 20-EMA. If they succeed, the pair could attract profit-booking from the short-term bulls. The pair could then tumble to $5.

MANA/USDT

Decentraland (MANA) rallied sharply from $0.28 on Dec. 30 to $0.78 on Jan. 21, which shows strong momentum in favor of the bulls.

The bears sold the break above $0.74 on Jan. 17 but the bulls stepped in and bought the dip at $0.61. This shows that the sentiment remains positive and traders are viewing the dips as a buying opportunity.

The bulls will have to sustain the price above $0.74 to signal the start of the next leg of the recovery. The MANA/USDT pair could surge to $0.87 and thereafter to the psychological barrier at $1.

If bears want to gain the upper hand, they will have to sink the price below $0.61. If they do that, the pair could start a deeper correction to $0.53.

*MANA/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows the formation of an inverse head and shoulders pattern. If buyers thrust the price above the neckline of the pattern, the setup will complete and the pair could spurt toward the target objective at $0.93.

Contrarily, if the price turns down from the current level and breaks below the moving averages, it will suggest that the bears are fiercely guarding the $0.74 resistance. The pair could then plunge to the $0.61 to $0.55 support zone.

AAVE/USDT

Aave (AAVE) broke and closed above the downtrend line on Jan. 17 signaling a potential trend change. The bears tried to yank the price back below the downtrend line on Jan. 18 but the bulls held their ground.

The upsloping 20-day EMA ($74) and the RSI in the overbought region suggest that bulls have the edge. This advantage could strengthen further with a break above $92. The AAVE/USDT pair could then rally to the psychologically crucial level of $100.

This level may again pose a strong challenge to buyers but if they overcome this obstacle, the pair could skyrocket toward $115.

Contrary to this assumption, if the price turns down and dives below the downtrend line, it will signal that bears are active at higher levels. The advantage may tilt in favor of the bears on a slide below the 20-day EMA.

*AAVE/USDT 4-hour chart. Source: TradingView*

The four-hour chart shows that the bears are defending the zone between $88 and $91 but they haven’t been able to pull the price below the moving averages. This indicates a bullish sentiment where traders are buying the dips.

The bulls will make one more attempt to clear the overhead zone. If they can pull it off, the pair could resume the uptrend.

Instead, if the bulls fail to push the price above $91, the bears will try to tug the pair below the moving averages. The pair could then fall to $78 and later to $73.

FIL/USDT

Filecoin (FIL) broke above the downtrend line on Jan. 14 and held the retest of the breakout level on Jan. 18. This suggests that the bulls have flipped the downtrend line into support.

The moving averages have completed a bullish crossover and the RSI is in the overbought space, signaling that bulls are in control. The FIL/USDT pair could rally to $6.50 where the bears may again mount a strong defense. If bulls kick the price above this level, the up-move could reach $9 with a brief halt near $7.

The 20-day EMA ($4.24) is the important support to watch out for on the downside because a drop below it could tilt the advantage in favor of the bears.

*FIL/USDT 4-hour chart. Source: TradingView*

The bears tried to stall the relief rally at $5 but the bulls pierced this resistance and started the next leg of the recovery. The upsloping moving averages and the RSI in the overbought zone indicate that bulls are firmly in the driver’s seat. Buyers will try to nudge the pair toward $6.50 and then $7.

On the downside, the 20-EMA is the critical support to pay attention to. If the price rebounds off this level, it will indicate that the uptrend remains intact. On the other hand, if bears drag the price below the moving averages, the pair could collapse to $4.20.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Decentraland launches virtual property renting for LAND owners

The metaverse platform announced that users who own LAND within Decentraland can officially rent out the rights to the space through the digital marketplace.

The metaverse platform Decentranland announced a new platform feature which allows its users who own virtual LAND to essentially become landlords. Owners can now officially rent out their property to other users on the platform for predefined periods of time.

This allows users to earn passive income off of their metaverse assets.

Decentraland classifies LAND owners as accounts or wallet addresses which own the smart contract for LAND, whether it be “a Parcel, an Estate, or both.”

All LAND rentals are performed in (MANA), the native token of Decentraland and paid upfront in total. The platform gave examples of digital universities renting out land to build campuses or DJs renting space for a club or party.

Similar to most rental contracts of physical properties, Decentraland landlords can not sell the land, nor can they receive any purchasing bids for purchase until after the rental contract period is over.

Decentraland followers on Twitter suggested the same rental service should also be available for wearables. Overall the community response was positive.

This comes as the metaverse continues to evolve and pick up more attention from both inside and outside of the Web3 industry.

The word metaverse itself was up for the Oxford dictionary’s word of the year, but ultimately came in second place.

Legacy internet giant Mozilla recently acquired Active Replica to boost its metaverse prowess and enhance its users’ digital experiences. While the metaverse and GameFi developer Animoca confirmed rumors that it will create a billion dollar metaverse fund for developers seeking to build out digital reality.

The metaverse, particularly mega-events such as festivals and fashion week, continues to be a gateway for new community members and developers into the greater world of Web3.

Norwegian gov’t agency opens metaverse office in collaboration with EY

The Brønnøysund Register Center collaborated with EY to open a virtual office in the Decentraland metaverse to reach its next generation of users.

The Brønnøysund Register Center, a Norwegian governmental agency, partnered with Big Four accounting firm Ernst & Young (EY) to step into the metaverse with a new virtual office location.

The center is responsible for managing numerous public registers for Norway, along with systems for the government’s digital exchange of information.

According to the announcement, the agency is choosing to create a metaverse location because the “future users of public services are there,” and it wants to connect with the younger generation that utilizes its services.

Magnus Jones, Nordic innovation lead at EY, told Cointelegraph:

“More and more authorities see a clear need of being present at the platforms where mainly younger generations are both for tax and legal purposes with regards to information.”

The virtual office plans to offer information on crypto reporting to users via the Norwegian Tax Agency and information on how to start an enterprise from experts at the Brønnøysund Registers.

Andreas Hamnes, a business developer at the Brønnøysund Registers, said if services continue to develop as they do now, it will contribute to increased alienation for generations who were “born digital.”

Jones continued to say that it’s the next generation that is really building “DeFi-based landscapes,” and they often have no clue or lack knowledge of tax or legal implications.

“That is why public authorities in Norway want to inform [them] about everything: from how you register a company, at what threshold VAT registrations arise, how to report your cryptos, etc.”

EY also has a metaverse office location in Decentraland, following its many Web3 developments, which include multi-million-dollar investments in the development of its own blockchain suite.

This development comes after worrisome claims were made about usership numbers in Decentraland.

Initial reports claimed that there were only around 40 unique active wallets in the metaverse platform. These numbers were corrected by both DappRadar, the source of the data, and Decentraland.

In the weeks following the incident, developers and investors in the metaverse spoke out with confidence that the metaverse is still very much a major part of the future of the internet.

DappRadar’s Q3 report revealed that blockchain games and metaverse projects raised a cumulative $1.3 billion in that quarter alone. In the same time frame, the International Criminal Police Organization entered the metaverse with its own metaverse law enforcement.

Ecosystem is bullish on the metaverse, no matter what the numbers imply

Despite the reports surfacing of low numbers of unique active wallets on Decentraland, the metaverse hype, investment and development go on.

An initial interpretation of DappRadar numbers on Oct. 11 reported extremely low engagement numbers for Decentraland, one of Web3’s most-hyped metaverses. The numbers shocked the community, as the platform has a current market evaluation of $1.2 billion.

Shortly after the initial report broke, both DappRadar and Decentraland verified that the published number of less than 40 unique active wallets (UAW) was not an accurate representation of activity on the network. According to DappRadar’s tracker at the time of writing, UAW is just over 600.

A DappRadar report following the incident revealed that blockchain games and metaverse projects raised a cumulative $1.3 billion in the third fiscal quarter.

However, if user engagement is low, what keeps investors coming back for more of the metaverse?

Cointelegraph spoke with Decentraland, DappRadar and prominent metaverse investor Animoca Brands,= to better understand what it is about the metaverse that keeps investors coming back.

Robert Hoogendoorn, the head of content at DappRadar, highlighted that despite the plummet in both crypto token prices and trading volume in United States dollars for metaverse land, the actual number of trades only dropped by 11%.

“This shows there’s still strong demand,” he says. Hoogendoorn also reiterated that participation in the metaverse goes far beyond just logging in. It is also decentralized autonomous organizations (DAO) activity and development teams leveraging each other’s open-source software:

“It’s not a one-way stream from business to consumer, but a web of entangled stakeholders, builders, creators, users, investors, organizers and so on.”

Sam Hamilton, the creative director of the Decentraland Foundation, said it is obvious that the space is still young. He continued to say that it “might be shocking” but numbers aren’t stopping anyone from joining in this creative climate.

Hamilton understands that many dismiss the metaverse as nothing more than “pointless entertainment,” but in reality, developers are creating something much larger:

“When you spend your days building something as massive and impactful as the metaverse, it becomes very hard to be short-sighted and merely care about numbers.”

Yat Siu, co-founder and executive chairman of Animoca Brands, said negative responses to important technological shifts are nothing new but expects to see them shift as the technology itself ripens.

Siu stressed that from an operational perspective, the decentralized metaverse is a better business model which is easier to both obtain capital and offer cool opportunities to consumers.

However, from a user perspective, he said it is even more important because products and services offer empowerment as never before. Nonfungible ownership presents new benefits from digital goods and data to “give users a stake and a voice in the products and services that they use”

“Blockchain is not simply a technological change but also one that enables socio-political change.”

Siu is previously quoted saying that he believes GameFi will be the onboarding point for users into the metaverse.

While some on crypto Twitter questioned the value of the metaverse, developers and investors have shown no hesitation in building out a digital universe. New tools and events are constantly being deployed to make the metaverse a more tangible experience.

Metaverse trading volume plummeted 80%, but hype hasn’t decreased

A DappRadar report found that while trading volumes have taken a sharp hit during Q3, the average number of NFT sales for these 10 projects only decreased by 11.55%.

Third-quarter trading volume for the top 10 metaverse projects may have fallen 80% compared to the second quarter, but analytics firm DappRadar suggests that interest in virtual worlds still remains.

The metaverse sector has been hit with a fair amount of negative press as of late, particularly around suggested low user activity across certain platforms, such as Decentraland and Meta — reports which they have refuted.

DappRadar noted in an Oct. 20 report that while trading volumes have taken a sharp hit during Q3, the average number of NFT sales for these 10 projects only decreased by 11.55% compared to Q2.

DappRadar explains that lower trading volumes could merely reflect decreasing asset prices and not necessarily lack of interest, noting that:

“We consider this a bullish sign because it shows that the hype for these types of projects hasn’t decreased. Instead, the fall of cryptocurrency prices has affected the projects’ overall trading volume instead of a lack of interest.”

A caveat to these sentiments, however, is that eight of the top 10 metaverse projects saw significant decreases in their nonfungible token (NFT) sales counts during Q3, with Yuga Labs’ Otherside seeing a 74% decrease for the quarter.

The positive action was primarily driven by The Sandbox and former Minecraft-based platform NFT Worlds V2, which saw NFT sale count increases of 190% and 79% apiece.

DappRadar attributed this to the hype surrounding The Sandbox’s Alpha Season 3, which offers a host of new gaming experiences and collectibles. While NFT Worlds V2 being booted off of Minecraft may have been seen as a “buying opportunity” as the value of its NFTs dropped by 90% in Q3.

Virtual lands floor prices plummet

Meanwhile, DappRadar’s report indicated that the floor prices for NFT land plots had decreased by 75% on average, which may have been one of the reasons why trading volumes had decreased by so much.

While the value of any piece of real estate, virtual or otherwise, is subject to swings, “Metaverse real estate is currently very depreciated,” DappRadar stated, adding that the declining prices are in accordance with the broader bear market of the crypto sector.

DappRadar was forced to defend its metaverse data last week, which had been interpreted to mean that platforms such as Decentraland had less than 40 daily active users.

The firm alsnoted that its user data tool only tracks users’ interaction with a blockchain, usually in the case of transactions, and did not count “non-blockchain-based activities” such as non-spending users.

The Sandbox tweeted on Oct. 10 that it had hit 39,000 daily active users, and 201,000 monthly active users over the previous 30 days.

Decentraland also reported having 8,000 daily active users and 56,697 monthly active users as of Oct. 8.

DappRadar explains why it counted less than 40 active users on Decentraland

DappRadar only tracks users directly interacting with blockchain, a new blog post explains. For example, Axie Infinity’s daily user count is over 100,000, but DappRadar measures it only at 20,000.

Crypto Twitter was shocked by reports claiming Decentraland, a $1.2 billion metaverse ecosystem, has had less than 40 daily active users recently. The data, courtesy of decentralized finance (DeFi) analytic firm DappRadar, created quite a buzz among the crypto community, with questions being raised over the future of Web3.

Decentraland was quick to refute those metrics and claimed that to get a better insight into the platform’s user activity, one should refer to the dashboard on the website. The metaverse platform noted that it accounted for 1,074 users interacting with smart contracts in September and a total of 56,697 monthly logged-in users.

Let's have a look at some of September's data:

56,697 MAU
1,074 Users interacting with smart contracts
1,732 minted Emotes
6,315 sold Wearables
300 Creators received royalties
161 created Community Events
148 DAO Proposals

— Decentraland (@decentraland) October 7, 2022

DappRadar has since clarified how the team reached that number and noted that it’s currently working with the metaverse platform to offer a more accurate data set. The data analytic firm said that it tracks the number of Unique Active Wallets (UAW), the number of transactions and the volume of those transactions across different decentralized applications (DApps).

DappRadar noted that its user data tool only tracks users’ interaction with a blockchain, usually in the case of transactions, but often non-blockchain-based activities go untracked. For example, Axie Infinity’s daily active user count is well over 100,000, while DappRadar measures only 20,000 UAW per day through on-chain data.

The DeFi analytic firm acknowledged that the Metaverse is a fast-growing ecosystem, and it depends solely on developer data for calculations. The firm is now working with Decentraland developers to offer a better insight into daily active users on the platform. The official blog post from DappRadar read:

“The key metrics DappRadar provides are based on smart contracts, which are mainly submitted by DApp developers. The Decentraland team is currently updating their list of smart contracts, and we’re therefore recalculating their metrics.”

While DappRadar user data might not be accurate, there is a certain decline in interest around Web3 ecosystems, including the much-hyped Metaverse. Even the most thriving projects are facing unprecedented pressures in the current bear market.

Metaverse platforms refute ‘misinformation’ about daily active users

User data from DappRadar consists of metaverse users who have also made an in-game purchase with the project’s native token, but the Decentraland and Sandbox projects disagree with that criteria.

Ethereum (ETH) blockchain-based Metaverse projects Decentraland (MANA) and Sandbox (SAND) have hit back at reports suggesting low daily user activity on platforms, arguing a “misinformed” metric was used to measure each of the platforms’ Daily Active Users (DAU).

The controversy appears to have come from data originating from DappRadar, with observers suggesting the Decentraland metaverse sees 30 Daily Active Users despite having over $1.2 billion in market cap.

Decentraland ( $MANA ) has 30 Daily Active Users

and a $1.2 Billion Market Cap pic.twitter.com/u4MBNsWvwk

— SHAKE (@0x_shake) October 6, 2022

However, Decentraland said in an Oct. 8 tweet that “some websites are tracking only specific smart contract transactions but reporting them as daily active users […] which is inaccurate.”

Sandbox CEO Arthur Madrid tweeted on Oct. 10 that “on chain transactions does not mean Users” and that nonfungible token (NFT) owners “invest in an asset that will grow in value over time based Utilities.”

In its tweet, Decentraland said “better data” can be found at DCL Metrics, a data aggregator custom-built for Decentraland, which measures DAUs by the number of “people who login and then move out of a parcel.”

This distinction is significant, as Decentraland’s September data shows 56,700 Monthly Active Users but only 1,074, or 1.89% of those users actually interacted with Decentraland’s smart contracts.

Let's have a look at some of September's data:

56,697 MAU
1,074 Users interacting with smart contracts
1,732 minted Emotes
6,315 sold Wearables
300 Creators received royalties
161 created Community Events
148 DAO Proposals

— Decentraland (@decentraland) October 7, 2022

Similarly, Sandbox refuted data suggesting its platform has a low number of DAUs, stating on Twitter that it has 201,000 Monthly Active Users.

But while this shows blockchain data should never be interpreted without context, it appears as though user experience and engagement are the biggest cause for concern according to a recent Reddit thread.

The thread saw one poster refer to Decentraland as “Desertedland,” while another poster said the popular Metaverse game had become a “ghost town.”

The controversy comes as even the most legitimate Metaverse projects face unprecedented pressures in the current bear market — which has caused a steep drop in token prices.

Decentraland’s MANA is currently priced at $0.65, down 88.8% from its all-time high (ATH) of $5.85 with a market cap of $1.43 billion.

Meanwhile Sandbox’s SAND is priced at $0.78, down 90.6% from its ATH of $8.40, with a market cap of $2.36 billion. Both MANA and SAND are down more than 5% over the last 24 hours.

Metaverse platforms refute ‘misinformation’ about daily active users

User data from DappRadar consists of metaverse users who have also made an in-game purchase with the project’s native token, but the Decentraland and Sandbox projects disagree with that criteria.

Ethereum blockchain-based metaverse projects Decentraland and the Sandbox have hit back at reports suggesting low daily user activity on platforms, arguing a “misinformed” metric was used to measure each of the platforms’ daily active users (DAU).

The controversy appears to have come from data originating from DappRadar, with observers suggesting the Decentraland metaverse sees 30 DAU despite having over $1.2 billion in market cap.

Decentraland ( $MANA ) has 30 Daily Active Users

and a $1.2 Billion Market Cap pic.twitter.com/u4MBNsWvwk

— SHAKE (@0x_shake) October 6, 2022

However, Decentraland said in an Oct. 8 tweet that “some websites are tracking only specific smart contract transactions but reporting them as daily active users […] which is inaccurate.”

Let’s have a look at some of September’s data:

56,697 MAU
1,074 Users interacting with smart contracts
1,732 minted Emotes
6,315 sold Wearables
300 Creators received royalties
161 created Community Events
148 DAO Proposals

— Decentraland (@decentraland) October 7, 2022

Similarly, Sandbox refuted data suggesting its platform has a low number of DAUs, stating on Twitter that it has 201,000 Monthly Active Users.

But, while this shows blockchain data should never be interpreted without context, it appears as though user experience and engagement are the biggest cause for concern, according to a recent Reddit thread.

The thread saw one poster refer to Decentraland as “Desertedland,” while another poster said the popular metaverse game had become a “ghost town.”

The controversy comes as even the most legitimate metaverse projects face unprecedented pressures in the current bear market — which has caused a steep drop in token prices.

Decentraland (MANA) is currently priced at $0.65, down 88.8% from its all-time high (ATH) of $5.85 with a market cap of $1.43 billion.

Meanwhile, Sandbox (SAND) is priced at $0.78, down 90.6% from its ATH of $8.40, with a market cap of $2.36 billion. Both MANA and SAND are down more than 5% over the last 24 hours.

Decentraland’s MANA and Shiba uptake surges year-on-year: eToro

eToro stated that MANA and SHIB saw the biggest surge in hodlers in Q3 2022, posting increases of 437% and 269% apiece compared to Q3 2021.

Increasing interest in the Metaverse has been seen as a reason for Decentraland (MANA) and memecoin Shiba Inu’s (SHIB) outpaced growth on retail trading platform eToro over the past 12 months.

In an Oct. 7 report shared with Cointelegraph, eToro stated that MANA and SHIB saw the biggest year-on-year surge in hodlers in the most recent quarter, rising 437% and 269% apiece compared to Q3 2021.

Other notable hodler increases on the eToro platform included Enjin (ENJ), Polygon (MATIC), and Basic Attention Token (BAT) with increases of 229%, 107% and 107%, respectively.

eToro crypto market analyst Simon Peters said that the rise of MANA in particular suggests the Metaverse has become a key theme of the crypto market this year despite the bear market:

“The Metaverse has been a major new frontier and that is reflected in the exponential growth in open positions of MANA. Although crypto markets have been difficult in recent months, the fastest risers indicate real interest in some of the most innovative projects in the past year.”

It is also worth noting that while the beloved SHIB is primarily a memecoin, the dog-inspired cryptocurrency gained a new use case in May 2022, allowing hodlers to use the crypto to purchase land in the Shiba metaverse.

The crypto is also involved in an upcoming mobile nonfungible token (NFT) game called Shiba Eternity, which will be available on both the Apple App Store and the Google Play Store, and will be compatible with its Shiboshi NFTs.

However, while the two Metaverse-linked tokens saw gains, eToro’s report noted that the top 10 most-held assets on the platform remain unchanged over the last 12 months.

Bitcoin (BTC), Cardano (ADA) and Ether (ETH) take the top three spots, while SHIB is ranked sixth and MANA is ranked tenth.

The uptick in Decentraland’s MANA token comes despite Decentraland catalyst nodes monitor on GitHub showing only 467 people online using the platform at the time of writing, while people in the crypto community on Twitter noted there were around 500 yesterday also.

The figures seem low, considering MANA has a market cap of $1.2 billion.

Just fyi dappradar tracks the interactions with DCL contracts not the users online (around ~500 atm)https://t.co/9lbpALw0oC https://t.co/6AJPJiex3y

— jin (@dankvr) October 6, 2022

Data from DCL Metrics lists the number of unique visitors to Decentraland at 7,871 as of Oct. 6, which is the highest number so far this month. However, this figure pales in comparison to the 18,000 daily users Decentraland co-founder Ari Meilich, reported back in December 2021.

MANA is currently the forty-sixth largest crypto asset in terms of market capitalization, according to CoinGecko, and its price is down 88.1% to $0.69 since its all-time high of $5.85 on Nov. 25, 2021. Over the past 24 hours, $115.3 million worth of MANA has changed hands.