DappRadar’s Dapp Industry Report for July 2024
At the time of posting, the crypto and economic markets are down, but this hasn’t seemed to affect the broader Web3 ecosystem. That’s why we’ve decided to present what happened in July, and honestly, the outlook still seems bullish. We’ve reached record-breaking activity levels, seen more AI dapps gain popularity, and witnessed old players, like OpenSea, reclaim their top spot as the leading NFT marketplace by volume.
So, a lot happened in July, and despite a rough start to August, the future still looks optimistic. Dive into this report to find out more.
Key Takeaways
- Daily Unique Active Wallets (dUAW) have surged to a record-breaking 15 million, reflecting a significant 78% increase from the previous month. Notably, the ‘other’ category has overtaken gaming in dominance, accounting for 28% of the industry. This category largely comprises dapps in the AI and high-risk sectors.
- DeFi Total Value Locked (TVL) has reached $175 billion, marking a 5% increase from the previous month, aligning with the closing value of Q1 2024.
- NFT Trading Volume has continued its downward trend, falling to $561 million, a 41% decrease from the prior month. However, the number of NFT sales decreased by only 11%, indicating sustained demand but at significantly lower prices.
- Ethereum remains the leader in the NFT market with a 29% market share, closely followed by Polygon at 24%.
- OpenSea has reclaimed its position at the top of the NFT marketplace rankings, achieving the highest trading volume at $174 million and leading in the number of traders, exceeding 163,000.
- Web3 exploits and losses saw a concerning spike, with $250 million lost this month, a staggering 400% increase from the previous month, reversing what was previously perceived as a downward trend.
Table of Contents
- Dapp industry overview
- Social dapps continue to lead our UAW rankings
- DeFi’s TVL matches the Q1 2024 levels
- Gaming NFTs take the spotlight: lower prices, lower volume
- OpenSea leads again in volume and traders
- $250 million lost due to exploits and hacks
- Closing words
1. Dapp industry overview
The dapp industry continues its bullish trajectory in Unique Active Wallets (UAW), reaching an impressive 15.9 million daily UAW, marking a substantial 78% increase from last month.
For the first time in over a year, gaming has lost its position as the leader in the dapp industry. This month, its dominance has dropped to 26%, while the ‘Other’ category has taken the lead with a 28% share. This category includes AI-based dapps like DIN and Alaya AI.
The social sector has continued its upward trend, gaining tremendous popularity in recent months. It now commands a 20% dominance in the dapp industry, with 3.1 million dUAW.
The DeFi segment saw the smallest increase in activity this month, with its dominance falling to 11%. Meanwhile, the NFT sector has surpassed DeFi, experiencing a 67% increase in activity and reaching 2.3 million dUAW.
In terms of chain performance, NEAR remains in the lead, driven by popular dapps like HOT Game and Kai-Ching. In second place, we have opBNB, boosted by Particle Network and Revox | ReadON, which emerged as the top performer this month.
Base also saw a significant increase in activity, fueled by Uniswap and the relatively new game dapp BLOCKLORD Dynasty, which has become the top game on this chain.
2. Social dapps continue to lead our UAW rankings
As we continue our analysis of the dapp industry, it’s clear that the social and DeFi sectors have a strong hold on the market.
Kai-Ching remains the leading dapp this month, followed closely by UXLINK and Revox | ReadON, which were highlighted in the previous section. It’s noteworthy how the social sector continues to excel, with social dapps actively engaging users and maintaining high performance levels.
To stay updated with real-time developments in the dapp industry, be sure to check out our rankings.
3. DeFi’s TVL matches the Q1 2024 levels
DeFi’s Total Value Locked (TVL) has been on a remarkable bullish trend since the start of the year and continues on this upward trajectory. This month, TVL reached $175 billion, marking a 5% increase from the previous month and matching the closing value of Q1 2024. This high value is maintained thanks to the launch of the ETH ETF and the ongoing trade of memecoins.
Ethereum continues to dominate the DeFi landscape, holding 66% of the total TVL. Solana follows, with its memecoin trading and DeFi activities boosting its network’s value.
The narrative around Layer-2 networks remains strong. Notably, Linea has quickly ascended to become the 10th largest chain by TVL, spurred by rumors of a new airdrop.
However, the standout performer this month has been Avalanche. The California DMV’s digitization of 42 million car titles on its blockchain is a prime example of Web3’s practical applications, indicating potential for continued adoption in this direction.
4. Gaming NFTs take the spotlight: lower prices, lower volume
Over the past few months, the NFT market has experienced slight changes in its trend, initially appearing to be on a very positive upward trajectory. We even reached the $2 billion milestone back in March. However, the landscape seems to have shifted. This month, the market barely surpassed $500 million, marking a significant 41% decrease from the previous month. Despite this downturn, there’s a silver lining: NFT sales have only decreased by 11%, suggesting that demand remains relatively high, but prices are falling.
When examining the performance of different chains, Ethereum remains the dominant player with a 29% market share. However, Polygon is close behind with 24%, having risen rapidly by shifting its focus from DeFi to gaming, making it one of the strongest competitors. This raises the question of how long it will be before Ethereum potentially loses its top spot, something that has yet to happen.
Additionally, it’s noteworthy that Immutable ranks fifth this month, bolstered by its robust and well-established gaming ecosystem.
Overall, the market appears to be shifting focus away from Profile Pictures (PFPs) and collectibles, instead leaning towards gaming-related NFT collections.
5. OpenSea leads again in volume and traders
For the past year, Blur has dominated the NFT market by trading volume. However, this month we’ve seen a shift as OpenSea reclaimed the top spot, accounting for 31% of the trading volume and hosting the majority of traders. This resurgence seems to be driven by the success of the Liberty Cats NFT collection.
As illustrated in the visual, the NFT marketplace industry has faced challenging times, with an overall downward trend. Despite this, there have been a few bright spots: the increase in traders on Magic Eden, largely driven by the popularity of the Bored Ape Yacht Club collection, and the rise in volume and average price on Element Market, also fueled by the zkCastle collection.
It’s fascinating to observe how quickly things can change in this space and how established players can make a comeback.
6. $250 million lost due to exploits and hacks
For the past couple of months, the frequency of exploits in the Web3 industry seemed to be on a downward trend, which had been encouraging. However, this month saw a significant setback with $250 million lost, marking a staggering 400% increase from the previous month and the highest amount since November.
Some of the major exploits this month include:
WazirX Multisig Exploit (July 19, 2024): A major attack led to the theft of $230 million. The attacker compromised the signers’ Externally Owned Accounts (EOAs) and altered the implementation of the Multisig, enabling them to drain the funds.
Li.Fi Exploit (July 16, 2024): This cross-chain DeFi protocol suffered a significant exploit due to an arbitrary call vulnerability, resulting in a loss of approximately $8 million.
Terra Blockchain Breach: A significant security breach occurred due to a vulnerability in a third-party module known as IBC hooks. Despite being patched in April 2024, the patch was not included in a subsequent Terra upgrade in June, leaving the system exposed. The attacker exploited this oversight, stealing around $4 million in assets, including USDC stablecoin and ASTRO tokens.
These incidents underscore the critical importance of prioritizing security in the Web3 space. Dapp builders must place a greater emphasis on safeguarding their platforms to protect against such significant losses.
7. Closing words
Despite the initial optimism from a positive trajectory in various sectors of the Web3 ecosystem, this report highlights a complex and evolving landscape. While there have been significant achievements, such as the rise in daily Unique Active Wallets, the continued strength of the DeFi market, and the resurgence of players like OpenSea, there have also been notable challenges. The NFT market has seen a sharp decline in trading volume, and security vulnerabilities have led to substantial financial losses, reversing what seemed like a downward trend in exploits.
The past month has been a testament to the dynamic nature of the Web3 industry. While certain areas, like gaming and AI dapps, are gaining traction, others face obstacles that must be navigated carefully. The fluctuating market conditions, shifting focus of NFT collections towards gaming, and the critical need for enhanced security measures all paint a picture of an industry in transition.
Despite these challenges, the underlying trends and developments suggest a resilient ecosystem with the potential for continued growth and innovation. As we move forward, the emphasis must remain on adapting to changes, securing platforms, and exploring new opportunities within this rapidly evolving space. The future, though uncertain, still holds promise, and the industry’s ability to navigate these challenges will be crucial in shaping the road ahead.
