Welcome to This Week in the Metaverse, where Fortune rounds up the most interesting news in the world of NFTs, culture, and the metaverse. Email marco.quiroz-gutierrez@fortune.com with tips.
The Sandbox and Decentraland were two first movers in Web3. During the digital land rush of 2021, speculators were paying hundreds of thousands of dollars for a plot in each metaverse. Some that stand out include a $4.3 million purchase in the Sandbox by Republic Realm (now Everyrealm) or Tokens.com’s $2 million buying spree in Decentraland.
Their respective cryptocurrencies, SAND and MANA also skyrocketed. In November 2021, SAND reached a high of about $8.44 and MANA reached a high of $5.90. On Friday, the tokens were trading at 48 cents and 41 cents, respectively, more than a 90% decrease, according to CoinMarketCap.
This week, the SEC said in lawsuits against Binance and Coinbase that both the SAND and MANA tokens were securities, a move that doesn’t bode well for either platform.
Sébastien Borget, chief operating officer of The Sandbox, on Wednesday seemed to brush off SAND being labeled a security, saying that the complaint doesn’t change the company’s day-to-day, Decrypt reported.
“We are aware of the lawsuits against Coinbase and Binance, and we disagree with many of their characterizations,” The Sandbox said in a statement to Fortune. “We hope this eventually leads to more clarity in the U.S. around crypto.”
Decentraland, for its part, has not put out an official statement on the SEC’s claims and did not send anything in response to my request for comment.
Although the lawsuits may take years to play out, the SEC’s claims are a setback for a Web3 space already suffering from slowing momentum. Already, Robinhood has said it will no longer support three of the cryptocurrencies mentioned in the complaint: Cardano, Polygon, and Solana.
Because SAND and MANA are the lifeblood of the in-game economies that differentiate their platforms, being delisted from exchanges could throw yet another wrench into the business of virtual worlds.
A look at Web3 gaming
Although last month the NFT market fell below $1 billion in monthly trading volume for the first time this year, Web3 gaming is holding steady, according to a report from DappRadar.
The blockchain analytics firm reported in its most recent blockchain games report that on-chain gaming activity saw a 6% increase in May. And despite a general decrease in on-chain transactions, gaming still made up 36% of all activity.
In other news
Crypto exchange Kraken launched the final version of its NFT marketplace after months of beta testing. The new marketplace will not charge gas fees for buying or selling on the platform and expanded its offerings to 250 collections from the 70 originally promised. The company claims that there are thousands of NFTs available for less than $100.
We are launching out of BETA! 🎉#KrakenNFT is your gateway to buying, selling & learning about NFTs!
— Kraken NFT (@KrakenNFT) June 8, 2023
🔎 Browse 250+ collections
⛓️ Polygon blockchain Integration
🧡 Reddit Collectible Avatars @0xPolygonLabs @Reddit
Read our latest announcement: https://t.co/3Xnn2tMyST pic.twitter.com/l1LTizqwT1
Louis Vuitton released its first NFT trunk. The collection includes “a few hundred” digital trunks called “Via Treasure Trunks” that cost $39,000 each. They are available in the U.S., Canada, France, the U.K., Germany, Japan, and Australia. Trunk buyers will receive access to upcoming Louis Vuitton products and events throughout the year.
Puma is planning an NFT sneaker collaboration with NBA player LaMelo Ball and NFT project Gutter Cat Gang, Decrypt reported. The GutterMelo MB.03 digital sneakers will go on sale June 29 and retail for about $175 on OpenSea. Buyers of the NFT can redeem them July 18 through Aug. 20 for a physical version.