The CoinDesk Culture & Entertainment Index (CNE) is designed to measure the market capitalization weighted performance of culture and entertainment protocols that are included in the Digital Asset Classification Standard (DACS). Inclusion of a digital asset in CNE is subject to minimum trading and exchange eligibility requirements. CNE reflects the DACS as of the prior month, so the Culture & Entertainment sector includes all projects that aim to decentralize social media platforms, create decentralized gaming worlds and increase direct peer-to-peer interaction between content creators and their audience, while at the same time maintain user privacy, security and ownership of data and digital assets.

As of Dec 15, 2022, CNE lost 35.2% for the quarter to date, and included 25 digital assets assigned to six industries in three industry groups according to the CoinDesk Digital Asset Classification Standard (DACS). Twenty-three constituents remained in CNE the entire fourth quarter and they all lost.

Best performer: Adventure Gold, the native token of the NFT project Loot, lost 10.4% and is part of the DACS Gaming Industry assigned to the Metaverse Industry Group. It has leaned heavily on its non-fungible tokens (NFT) being free to use however folks please. As such, any new project looking to incorporate Loot tends to have a positive effect on the price of AGLD. This time it would appear to be a game called Endless Crawler.

Worst performer: Rally (RLY), the token of the social tokens platform, lost 53% and is part of the DACS Social Industry assigned to the Media Industry Group. It dropped over 30% in the days after the FTX collapse and hasn’t been able to recover since. However, both Adventure Gold and Rally are relatively small, with a combined total weight just over 0.8% of CNE at the end of the period.

Biggest asset: ApeCoin is the biggest asset in CNE, comprising 21.4% of the sector. While APE lost 26.0% QTD, it ranked as the fifth-best performing asset in the sector. It has fluctuated wildly this quarter, swinging to new lows on the back of reports of a U.S. Securities and Exchange Commission (SEC) probe in October, and then rebounding considerably on the launch of its staking service in mid-December.

Also notable: Virtual reality and gaming platform Decentraland’s MANA token was down 46%.

Read more: CoinDesk Market Outlook: 4Q Crypto Gloom Spills Into 2023

The crypto market slowdown loomed over the Culture and Entertainment sector, consisting largely of digital artistic creations, collectibles and applications such as non-fungible tokens (NFT) and metaverse.

Data from Dune Analytics shows that volume in NFTs fell to $3.3 billion QTD, from $8.3 billion in the fourth quarter of 2021 – a 59% decrease.

Despite the crypto chill, a melding of the metaverse and blockchain gaming communities has brought a silver lining for many builders, with the forming this year of an “Open Metaverse Alliance of Web3” that aims to address interoperability challenges, according to Saro McKenna, co-founder and CEO of Dacoco, publisher of blockchain game Alien Worlds.

“Resiliency of all kinds” might be the bywords for 2023 as developers continue to build more “open products that are interoperable with each other,” she said. “The different gaming and metaverse environments are trying to connect up and allow users to go between the different metaverses carrying their identities and their history with them.”

(Fourth quarter performance as of Dec 15, 2022.)

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