Binance Research has released its latest report into the health of the crypto industry, Q3 State of Crypto: Market Pulse. The 53-page document provides a snapshot of how the crypto market is faring as Q3 2023 wraps up. It’s a mixed assessment that notes a 9% contraction in the value of digital assets, but contrasts this with increased investment in sectors such as infrastructure and gaming.

The quarterly research reports commissioned by Binance, and meticulously assembled by Binance Research, have become a useful yardstick for gauging where crypto is at. If the latest State of Crypto report could be summarized in one word it would be “uncertainty.” The market is at a crossroads, with uncertainty as to where it’s headed next, up or down, pending potential catalysts.

On the one hand, the fear of impending regulatory enforcement, coupled with a lack of compelling new use cases, has prompted traders to be cautious. On the other hand, the expectation of imminent Bitcoin ETF approval has savvier traders keeping their powder primed and dry and exploring call options with January expiry. While these matters aren’t directly addressed in its report, Binance Research observes their effects as measured in market contraction.

The document’s key takeaways provide a frank assessment of where we’re at, noting “Crypto market capitalization increased by 8.4% QoQ in Q3 but overall sentiments remain poor.” It records how onchain activity trended lower during the quarter and that TVL in DeFi has also declined. It’s not been a bloodbath, but there’s nevertheless a reduction in meaningful trading metrics. Thankfully the news from other sectors of the cryptosphere is rosier.

The gaming sector has continued to attract investment during Q3 and there have been plenty of new titles making their public debut. The report notes that BNB Chain continues to host more games than any other network, despite the fact that only 28% of web3 games have been released yet: the remainder are still in alpha or beta. The number of mobile-based web3 games grew by 5.6% during the quarter, but web3 gaming on consoles remains low. It seems that if GameFi is to take off, it will be on smartphones.

Other interesting gaming-related tidbits to emerge from the Q3 report are the emergence of move-to-earn as a category, while Alien Worlds and Splinterlands remain the most popular releases. Binance Research then transitions smoothly to the metaverse, pointing out that three of the top five gaming tokens by market cap are metaverse related in SAND, MANA, and APE. The less said about NFTs, meanwhile, which just recorded their worst quarter in almost three years, the better.

One protocol that’s done well in Q3 is Lido. The liquid staking provider has increased its dominance, reaching TVL of $14.7B now, placing it way ahead of closest dapp competitor Aave ($4.9B). In fairness, TVL isn’t the best metric for gauging success here, since Lido’s designation as a staking protocol means it’s bound to hoover up vast amounts of ETH from users intent on then putting stETH to use elsewhere – including Aave.

The crypto industry won’t look back on Q3 2023 as being a memorable quarter it’s fair to say. This is perhaps embodied in the FTX trial proving the main talking point in recent weeks, save for the occasional slice of Bitcoin ETF drama. Nevertheless, there are enough glimpses of sunshine throughout the report – greater investment here; protocol growth there – to suggest better times are ahead for the blockchain industry.

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