DeFi TVL is $250 billion less than its peak
The crypto industry is still feeling the effects of several breaches, including the Solana wallet attack, the Acala and Nomad exploits, and the Tornado Cash sanctions. Therefore, it’s no surprise that the market is still bearish, with dapp activity dropping to an all-year low.
However, the latest report from blockchain analytics firm, DappRadar, showed some bright spots as the Ethereum network completed one of the largest testnets, Goerli, in preparation for the upcoming merger.
DappRadar’s August 2022 Industry Report found that unique active wallets (UAWs) connected to blockchain dapps fell 3.52% on a monthly basis, to 1.67 million. This figure is also a 14.73% drop from its August 2021 counterpart.
The decline of other cryptocurrency activities is also visible. DappRadar reports note that Solana UAW was down 53% from the previous month and the number of transactions fell 68%, due to the latest Solana hack that occurred earlier this month.
On the positive side, the decentralized finance (DeFi) industry is seeing an overall increase in activity as the crypto market slowly recovers. DeFi dapps are showing signs of recovery with a 3.7% increase in average daily UAW month-over-month (MoM). Still, the DeFi category is far from its peak with less than half a million daily UAWs.
“This growth is primarily driven by the Flow protocol, which grew 577% UAW over last month, due to support for Flow-based NFTs in Instagram (LINK) and the success of their game, Solitaire Blitz. Additionally, Optimism has a 33% MoM increase, primarily due to the upcoming Ethereum merger,” the report states.
Even though DeFi is showing signs of recovery when analyzing active wallets, Total Value Locked (TVL), the baseline for measuring the effectiveness of dApps, is still suffering and currently sits at $74.21 billion. This is an alarming decrease given that this amount was $250 billion less than eight months ago, the report notes.
In contrast, NFTs and games continue to show signs of evolution and maturity, with 847,230 daily unique active wallets and $698 million in transactions. It’s no surprise, as we’ve seen several blockchain games with truly immersive gameplay mechanics that take entertainment to the next level.
Other highlights show new entries as competitors in the NFT market, with OpenSea’s dominance falling to 56% from 84% measured in May. However, OpenSea continues to maintain its position as the dominant market leader, accounting for a total transaction volume of $482 million. The drop in OpenSea’s total trading volume comes at a time when it is cutting 20% of its workforce, citing the company’s need to adapt to current market conditions.
The DappRadar report outlines the factors affecting the blockchain ecosystem, using metrics and data to create an understanding of the latest trends. The report summarizes different market scenarios to provide a basic overview of the market as it relates to DeFi, NFTs, gaming, and everything in between.