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Dapp Industry Overview: November 2021

Dapp Industry Overview: November 2021

The dapp industry continues to expand across different verticals in November 2021.

The dapp industry continues to expand across different verticals in November 2021. Boosted by the metaverse narrative, the usage of play-to-earn dapps and the value of virtual lands on the rise, the industry maintains its upwards momentum. On the other hand, NFT collectibles have taken a slight step back after three consecutive months of posting $4 billion in trades. Meanwhile, the adoption of DeFi continues to grow as Avalanche, Arbitrum, Elrond, and Ronin considerably increase the value of assets locked in their respective networks.

The metaverse narrative is compelling for the dapp industry. Currencies supporting this trend were the biggest gainers, with the likes of SAND and GALA increasing in value by 600% in the last 30 days.

Furthermore, a record 2.5 million Unique Active Wallets (UAW) connected to blockchain dapps on a daily average. Blockchain games are responsible for half of the industry’s blockchain usage, and the competition for DeFi share continues to heat up. In the NFT space, collectibles experience a cooldown period after three months of impressive trading volume, while play-to-earn and its gaming NFTs are thriving.

Note: Unique Active Wallets (UAW) or unique wallets refer to unique addresses that interact with a given smart contract; therefore, UAW does not translate to unique users.  A single individual might utilize different wallets to interact with a single dapp.

Key takeaways

  • The dapp industry grew 15% from October with almost 2.5 million daily unique active wallets connecting to blockchain dapps on average during November. 
  • The blockchain-based metaverse became as valuable as ever; the market cap for virtual world dapps reached an all-time high, surpassing $4.6 billion at the end of November.
  • For the first time ever, play-to-earn dapps surpassed $1 billion in NFT trading volume, growing 71% month-over-month.
  • The DeFi space saw continued growth, with $246.2 billion in TVL at the end of November, 12% up from the previous month.
  • Metaverse-related tokens soared to all-time highs; GALA and SAND led the way with 790% and 605% increases respectively from October.

Table of Contents

2.5 million daily UAW connected to blockchain dapps

The dapp industry keeps growing. In November, on average, almost 2.5 million UAW per day connected to a blockchain dapp, boosting the usage registered in October by 15%. The number looks even more impressive when compared to November 2020, as the number of daily average UAW has increased 21,950% year-over-year. 

Solidifying the trend observed in October, DeFi dapps continue to attract users. UAW connected to DeFi dapps grew 30% from October, and now represent almost 45% of the dapp industry’s activity. Game dapps continue to grow as well, as UAW connected to games increased 4% month-over-month (MoM). Nonetheless, the dominance of games in the industry’s usage decreased slightly from almost 55% to 49.5%. On the other hand, UAW connected to NFT-related dapps (marketplaces and collectibles) decreased 20% over the same period.

Out of all the different blockchain protocols, the one that improved the most in terms of usage was Avalanche. It grew its UAW base 88% month-over-month, followed by Ronin and Harmony, increasing their usage 72% and 65% respectively. Ronin has found traction as the main blockchain for the Axie Infinity ecosystem, while the newly launched Katana DEX made an impact. At the same time both Avalanche and Harmony have grown their TVL in the DeFi sector. This proves once again that usage is driven by play-to-earn games and DeFi dapps.

Value of virtual lands skyrockets past $4.6 billion

At the end of last month, the conversation around the metaverse began making headlines. Labeled by mainstream media as the next big thing, the blockchain industry seized the opportunity to shine and take the spotlight. NFTs that represent virtual lands across different platforms enjoyed an important value appraisal.

As a result, the market cap of virtual land NFTs reached $4.6 billion in November. This recent valuation represents a 228% increase from the end of October and an impressive 904% from the end of September.

Land from projects like The Sandbox, Decentraland and Somnium Sapce are often valued in their native currencies, SAND, MANA and CUBE. The price increase of those was mostly fueled by the latest token price surge. However, peer virtual worlds that currently lack any type of native currency, like Cryptovoxels and Treeverse, also saw their parcels appreciated in value. Put simply, demand for virtual real estate is on the rise. A record 27,600 unique traders were involved in land transactions, increasing 145% from the previous month.

Furthermore, virtual real estate dapps generated $228 million in trading volume in November. This figure is by far the best month for virtual world projects and represents an outstanding 688% increase from the previous month. Investors and metaverse enthusiasts are truly supportive of this new trend.

For instance, two out of the top five NFT sales in November were virtual lands. The Fashion Street Estate in Decentraland was sold for 618,000 MANA or $2.42 million, while an Axie Infinity Genesis Plot was sold for 550 ETH or $2.33 million.

For digital parcels, owners will be able to build any type of property, host live events, assemble NFT art collections, or simply rent them for others to monetize their projects. Virtual lands will enable a new type of digital economy and even a new virtual community. The metaverse is just getting started.

Metaverse based cryptos soaring to all-time highs

Not only virtual lands saw their value appraised. Cryptocurrencies backing up virtual worlds and metaverse-related projects, including several play-to-earn dapps, saw impressive gains during November.

SAND, The Sandbox’s utility and governance token, reached an all-time high of $8.40, increasing its price 605% from October 30. The price of MANA, Decentraland’s native and governance token rose 277% in the same timeframe, while the price of CUBE, Somnium Space’s native utility token, pumped 151%. 

The surge is not specific to virtual real estate dapps. GALA, the utility and governance token of Gala Games, saw its price increase 790% from October 30. At the same time, the price of ILV, another prominent play-to-earn based token, surged 90% in the same time frame.

NFT collectibles cool down amidst metaverse euphoria

It’s undeniable that the NFT space, specifically collectibles, is undergoing a cooldown phase (that was widely expected – check our last month report). While certain projects like the Bored Ape Yacht Club (BAYC) actually saw their value grow, the majority of the NFT collections are in the throes of a downward trend. 

In November, the NFT space generated $3.76 billion in trading volume, 15% down from October’s numbers. The decrease comes despite 4.5 million unique traders in November, which is 9% higher than the last month. From a blockchain standpoint, Ethereum and BSC both saw their NFT trading volumes decrease by 28% and 61% respectively, while Solana and Wax improved their NFT trading volumes by 211% and 108% month-over-month.

Another relevant metric to assess the state of the NFT space is the floor market cap. As of November 30, DappRadar estimates the NFT market cap for the top 100 NFT collections across all protocols (Ethereum, Flow, BSC, Solana, and WAX) at $18 billion, increasing 6.6% from October’s record. It should be noted that the 228% increase of virtual worlds market cap played an important role in the NFT market cap growth. 

Diving deeper into the NFT sphere, we identify that the trading volume of NFT collectibles decreased 16% MoM. At the same time, game items represented as NFTs generated over $1.08 billion in trading volume, improving the metric 71% from October numbers.

While the NFT market for collectibles might be experiencing a bearish trend, the most recognized projects like CyberKongz, RTFKT and SupDucks among several others, continue their respective developments. There is no need to panic.

Play-to-earn dapps attracted over 1.2 million daily unique wallets 

Play-to-earn and GameFi dapps have benefited significantly from news around the metaverse. Not only did gaming NFTs surpass $1 billion in trades for the first time, but the use of blockchain games is encouraging. Over 1.2 million daily UAW connected to game dapps on average in November.

Axie Infinity continues to be the most played dapp based on off-chain activity, with more than 2 million Daily Active Users (DAU) according to Sky Mavis. In addition, Axie’s on-chain activity increased significantly since the AXS staking feature was enabled on Ronin at the end of September.

The rest of the leading game dapps continue their dominance atop DappRadar’s game rankings. Splinterlands and Alien Worlds continue to dominate the usage, while CrytpoMines and Mobox solidify their status as GameFi dapps commonly found in BSC. 

To learn more about the state of the blockchain game industry, stay tuned in at DappRadar, as next week, we’ll release our game report covering in detail each aspect of this enticing industry.

DeFi reaches $246 billion in TVL as 10 protocols 

Amidst the emotion brought on by the metaverse, DeFi has been overlooked for the last few weeks. Still the industry’s TVL grew 6% reaching $246 billion in value locked across all protocols.

Ethereum continues to lead. The layer-1 network reached $132 billion in TVL, accounting for almost half of the industry’s value. This represents a 10% increase from November.

Avalanche has seen increasing adoption over the past month, and became the main winner in DeFi land. The number of UAW connected to the network increased 88% MoM, mostly propelled by an interesting DeFi offering. The Ava Labs blockchain increased its TVL by 55% MoM, surpassing $13 billion at the end of November. Prominent DeFi dapps like Aave and Curve extended their features to Avalanche, while Avalanche native DeFi dapps Trader Joe, Benqi, and Blizz have formed a solid DeFi ecosystem inside the network. 

Also, it should be noted that the DeFi industry is more complete and mature than ever before. 10 protocols have surpassed $1.4 billion in TVL at the time of writing as Arbitrum, Elrond, and Ronin all reached the milestone in November. The case of Ronin is something to monitor. The Sky Mavis sidechain has become a more complete network with the launch of the Automated Market Maker (AMM) Katana.

25 million ENS airdropped to early .eth domain adopters

This November report would not be complete without mentioning one of the most important airdrops in the history of Web 3.0. We’re talking about the Ethereum Name Service (ENS) governance token airdrop. Almost 138,000 wallets were eligible to receive a certain amount of the 25 million ENS distributed, depending on how many domains were registered and how long an address had held them. 

Web 2.0 uses Domain Name Services (DNS) to direct traffic to the desired website IP. In Web 3.0, domains are much more than that. ENS for instance are almost invulnerable to DDoS or spoofing cyber attacks, and are also used as payment gateways. 

Moreover, ENS will be critical in mass adoption. By providing a human-readable .eth domain, individuals will transfer 1 ETH to johndoe.eth instead of a hexadecimal address that may be daunting for some people. In this way, decentralized domains will eventually become part of our digital identity, something that important brands have realized. In August, Budweiser acquired beer.eth for 30 ETH, while there are rumours about Adidas’ interest in purchasing the adidas.eth domain after making its way into The Sandbox earlier this month.

Budweiser’s ENS domain; source: Twitter

It is worth noting that ENS, as a cryptocurrency, has a $1.5 billion market cap at the time of writing, positioning itself as a top 100 currency by market capitalization. ENS is only an example of Web 3.0 domains. It lays down the foundations of this new technology paving the way for a decentralized and community governed infrastructure. 

In-summary

November confirmed that the dapp industry is expanding and evolving across multiple fronts. The metaverse dominated headlines and assets related to that narrative have enjoyed a streak of success. The value of metaverse related cryptocurrencies and NFTs surged to all-time highs, reaching an impressive $4.6 billion for the virtual real-estate market.

While NFTs collectibles are cooling down, the usage and interest in games and DeFi continue to grow. An all time high of 2.49 million UAW connected to dapps on a daily basis, helping DeFi to achieve an all time high in TVL, and propelling activity and trade volumes in play-to-earn and GameFi dapps. 

It’s clear that people are interested in the advantages of a decentralized ecosystem, and this ecosystem produces amazing stories to reach a broader audience. From the run on virtual real estate to the ENS airdrop, and from financial services on the blockchain to play-to-earn, the world is watching. With brands stepping in, it feels like mass adoption is getting closer. This and all those new developments make the dapp space is as enticing as ever.

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