Dapp Industry Overview: October 2021

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Two million unique active wallets (UAW) interacting with dapps on a daily basis for the first time

October confirmed the bullish trend in the blockchain industry. Furthermore, after a record-breaking quarter, the NFT space continues its impressive pace, showing no signs of slowing down. Meanwhile, the DeFi space has reached an all-time high in terms of Total Value Locked, with seven blockchains holding 95% of it. Finally, the game sector keeps increasing its audience, paving the way for mass adoption to potentially happen in 2022. 

After months of being trapped in a bearish trend, the most important cryptocurrencies reached their respective all-time highs in October. ETH, SOL, LUNA, AXS, and many more followed BTC in their ways to position themselves in the price discovery range. 

In the dapp space, the blockchain industry continues its expansion. A record 2 million Unique Active Wallets (UAW) are connected to blockchain dapps on a daily average. NFTs generated $4.2 billion in trades, with some blockchains starting to get their presence felt in the category.

In DeFi, the race for TVL dominance gets crowded as several networks significantly improve their respective value metrics. Whereas blockchain-based games, especially those involving virtual worlds, gain relevance as the result of Facebook’s rebranding news.

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

  • For the first time, the dapp industry registered more than 2 million daily unique active wallets during October, 21% up from the previous month and a 626% increase year-over-year.
  • The floor market cap for the top 100 Ethereum NFT collections and NBA Top shot was measured at $16.72 billion, a 18% increase from the figure recorded in September.
  • The NFT space keeps up the pace after an impressive summer with $4.2 billion in trading volume in October alone, a 2% increase month-over-month.
  • The DeFi ecosystem’s TVL reached  $219.8 billion, 39% up from the previous month;  93% of the industry’s TVL is concentrated on 7 blockchains.
  • Solana positions itself as a very complete blockchain; in DeFi it surpassed $12 billion in TVL, increasing 50% from September, while it registered $240 million in NFT trades, and offers a wide catalogue of upcoming games.
  • Metaverse tokens go wild after Meta announcement, MANA up 303% and SAND up 128% from October 1st.

Table of Contents

Over two million daily unique wallets

The blockchain industry continues to expand based on October data. For the first time, more than two million (2.16 million) UAW connected to blockchain dapps on a daily basis. This represents a 21.24% increase from September’s usage average, and a notable 626.5% improvement year-over-year (YoY). Besides Wax, which saw its wallet base decrease 23% month-over-month (MoM), other important blockchains saw their number of UAW increase.

Shifting from the trend observed in Q3, DeFi saw the most significant increase in terms of UAW, as the metric grew 32.49% MoM, reaching 803,500 daily UAW on average. This comes barely as a surprise, as in recent months, notable blockchains like Solana, Terra, Avalanche, and Fantom, established themselves amongst networks with solid DeFi ecosystems. 

In parallel, the game category keeps growing as well. The number of UAW that interacted with game dapps in October increased by 19.72% MoM. The most notable growth in this category was observed on Polygon, a network best-known for its DeFi dapps. 

Simultaneously, on the NFT side, the number of UAW keeps increasing too. Over 142,000 daily UAW connected to NFT related dapps. Mostly driven by Solana and BSC, which revamped their NFT alternatives. 

Mainstream meets the metaverse

Last week, Facebook, the 6th largest company in the world in terms of market cap, announced its rebranding to Meta. A direct allusion to the metaverse, which will become the main focus of the social media giant moving forward. Whilst for people engaged with the blockchain space, especially with the game sector, this might be a familiar concept, the metaverse is still quite a novel and abstract topic for most of the people out there.

A direct effect has already taken place in the price of certain cryptos. Those that are are tightly connected to the metaverse. For instance, virtual worlds like Decentraland, The Sandbox, or Ember Sword, to name a few. Triggered by Mark Zuckerberg’s announcement, MANA, the native and governance token of Decentraland, reached an all-time high of $4.11 on Halloween night, tripling in price since the presentation by Zuckerberg.

Something similar happened with SAND, The Sandbox’s utility and governance token. Currently, SAND is in the price discovery range at $2.35. A 125% increase from the previous all-time high reached in September.

While most of these virtual spaces are still in development, it is becoming clearer that the metaverse will potentially change the way we socialize and even monetize certain aspects of our lives. A space where communities will gather to play, trade, and get around. It is evident that a concept that only a few years back was merely a dream has now become utterly relevant beyond the blockchain.

Games represent 55% of the industry’s usage

Even though DeFi was the most improved category in terms of UAW growth, blockchain-powered games still represent most of the activity in the dapp industry. 1.19 million UAW connected to game dapps in October. The dominance established by the games category remained at the 55% seen in September, improving the quarterly outlook from the 49% registered in Q3.

Splinterlands was one of the main contributors. After an astounding Q3 that saw the trading card play-to-earn game expand its user base 3,260% quarter-over-quarter (QoQ), the Hive dapp kept growing in the last month. In October, Splinterlands was consistently the second most played game (based on on-chain activity) in the industry, with over 651,000 UAW registered in the month. The number represents a 44.38% increase from September.

Axie Infinity is the most played game in the entire industry considering off-chain data. With over 2 million daily active users according to the Sky Mavis team. However, the on-chain activity spiked in October, making it the third most-played dapp considering on-chain data only. Impulsed by the AXS staking feature, users are connecting to the popular dapp more frequently. In October, 647,000 UAW connected to Axie, improving the metric 27% from the numbers seen in September. 

Also, there is the curious case of BSC. Since Q3, BSC has established itself as a GameFi referent. Hosting popular games like Mobox and CryptoBlades, the network saw its game usage increase by 16% MoM. Despite decreases of 26% and 25% respectively in the two aforementioned dapps, new GameFi dapps constantly boost BSC’s monthly gamer base. Whilst Mobox (157,000 UAW) and CryptoBlades (89,700 UAW) appear to be locked as top 10 games,  new BSC alternatives come and go each month. In October, CryptoMines attracted over 112,000 UAW, whilst CryptoZoon notched that role in September. Will the trend continue in November or, can CryptoMines consolidate as a top game option? We will keep you informed.

Polygon receives much needed boost

Not so long ago, Polygon was an established DeFi player. To be fair, it still holds a favorable ecosystem, yet it has lost ground to other networks (more on that later). However, in October, signs of life came from the layer-2 solution in the form of game activity.

Arc8, a play-to-earn mobile game developed by Gamee, was launched in September. Along with the game’s send-off, they announced a mining program to make signing up for the game more attractive. Last week, after concluding the mining phase, the Arc8 app fully launched, enabling new mini-games and creating a positive impact on the price of GMEE, the dapp’s native token. In October, over 373,000 UAW connected to the Polygon game, despite the end of the mining activity. It will be worth watching whether Arc8 can consolidate a solid user base. 

Besides Arc8, Polygon hosts already established game options like the GameFi dapp Aavegotchi, and the racing game Revv Racing. In addition, upcoming virtual worlds like The Sandbox and Ember Sword will be integrating themselves into the Polygon network.

The positive news for Polygon is that the future seems bright in the NFT space as well. In addition to the obvious correlation that the virtual worlds – spaces rich in NFTs, will offer, the recent announcement of Bollywood and cricket stars entering the NFT market might play an important role in Polygon’s outlook. It should be noted that Polygon is a project based in India. The importance of Bollywood and cricket in that part of the world can be comparable to the effect that Hollywood and sports celebrities like Tom Brady or Steph Curry have in the United States, or Lionel Messi and the F1 in the Eurozone. 

As monitored by DappRadar, several Hollywood and sports celebrities have jumped on the NFT bandwagon in recent months, from joining blue-chip collections like CryptoPunks or Bored Ape Yacht Club (BAYC), to launching their own NFT series in Ethereum or other alternative blockchains. Giving the space another sense of exclusivity. 

The Bollywood effect is certainly one to monitor in months to come. Having recognized celebrities from that part of the globe, as part of a future NFT market, will not only strengthen Polygon’s NFT offering but will also expose the NFT market beyond a very concentrated US base. Whilst also interacting with a very active play-to-earn driven region, in Southeast Asia. 

The NFT space receives support outside from Ethereum

The NFT space literally exploded in Q3, accumulating over $10.4 billion in trading volume during that timespan. Impressively, the space kept up the pace in October. Over $4.2 billion were traded in NFTs during the last 31 days alone. A slight improvement of $148 million from September’s numbers. 

Perhaps most importantly is the fact that the floor market cap for the top 100 Ethereum collections by trading volume, plus Flow’s NBA Top Shot, increased 17.81% from September’s record. Reaching $16.72 billion in the process.

The increase in the floor market cap came despite the fact that some of the blue-chip collections experienced a decrease in their respective floor price on a monthly basis. For instance, CyrptoPunks floor price decreased 21.44% MoM, BAYC’s was down 10.23%, while CyberKongz and Cool Cats floors were down around 6% respectively from the end of September. 

On the other hand, amidst the current hype surrounding the metaverse, virtual world projects like Decentraland and The Sandbox, pushed their floor prices upward contributing to the floor market cap rise as well. Coupled with the increase in the price of ETH of 50.32% when compared to September 30. 

It is worth noting that the dominance of in-game items decreased slightly in the month. A contraction of less than 2%, puts the NFT game dominance at 15.46%, down from the 17.02% seen in September. Most notably, Axie Infinity scales down its trades having a downside effect in-game NFTs. Despite the negative scenario, the NFT space continued to expand.

Whilst the demand for NFTs is still outpacing the ever-growing supply, it might be time for a slight market contraction. However, an all-time high of 3.7 million unique NFT traders was identified in October, putting the rumors down. The NFT market is still following a positive direction. 

During the previous months, we have covered in detail the progression of NFTs, especially on Ethereum. Some of the collections hosted on Ethereum are widely viewed as units to store value, whilst others are truly passive income generators. That is the case of some of the aforementioned NFT projects, as well as other ones like the Art Blocks collection, and Cryptoadz to name a few.

The status of blue-chip collections has certainly played a role in Ethereum’s NFT dominance (82.11% of total NFT trading volume). However, as previously mentioned, the decrease in some of these collections opens the door to a surge of other marketplaces that are not named OpenSea. 

Whilst the trading volume on Ethereum grew 1% MoM in October, OpenSea, the network’s most important marketplace, experienced a 14.37% drop in trades during the same period. For the second consecutive month, OpenSea has decreased on this metric, further supporting that the NFT space is not dependent on one single blockchain.

Notably, Solanart, the de-facto NFT marketplace on Solana, generated over $187.3 million in trading volume in October, growing 13.79% MoM. That level of sales leave Solanart as the third-largest marketplace by trading volume in October, only trailing incumbents OpenSea and Axie’s marketplace. 

Also, the AtomicMarket on Wax saw an important spike in its trading volume. Boosted by NFT game items like the ones coming from FarmersWorld, AtomicMarket increased its trading volume by an impressive 459.25% compared to the previous month.

In BSC, PancakeSwap was already the most used dapp in the entire industry. Yet, in October, the DeFi platform solidified its new feature, the PancakeSwap NFT marketplace. In October alone, PancakeSwap, as a marketplace, attracted over 37,000 unique traders and amassed over $39M in trading volume. Those numbers represent significant increases of 140.72% and 676.67% respectively. Impressively, PancakeSwap marketplace generated the 6th most traded volume in October, surpassing NBA Top Shot despite the successful sale of the “Run it Back” series that saw Top Shot’s marketplace improve its trading volume by 122.42%, and an uptick in its unique traders of 30.46% MoM, reaching 124,000. 

All-time high $219.8 billion in Total Value Locked

The DeFi space might have been overshadowed by the solid Q3 that both NFTs and games put up. However, as stated in DappRadar’s Q3 Industry Report, we noticed that noteworthy stories like Solana’s strong DeFi offering, and Avalanche intensive liquidity mining program was already happening in DeFi land. Furthermore, boosted by the surge in crypto prices, the industry’s TVL reached an all-time high of $219.8 billion in October. A 23.4% increase from September’s value. Meanwhile, seven blockchains hold 93% of the industry’s TVL.

Ethereum is still the leader in terms of the aforementioned metric. At the end of October, Ethereum held $120 billion in TVL, almost 55% of the industry’s metric. Even though the supply in DeFi dapps has increased in recent months, and despite all the negative effects of high gas fees, Ethereum is still a network rich in DeFi activity. Especially one where whales thrive, as explained in our latest whale reports.

BSC was surpassed by Solana in terms of TVL. Despite being home to the most used dapp in the entire industry, and increasing the TVL by 23% from the end of September, BSC could not match the pace of the red-hot Solana. Besides PancakeSwap, other DeFi dapps like ApeSwap, Venus, and Alpaca Finance offer attractive yield farming options that have attracted a notable amount of users. At the end of October, the TVL in BSC reached $21.89 billion.

Terra is still the fourth blockchain in terms of TVL. With over $9.95 billion, Terra increased its metric by 18% MoM. A positive trend, but overmatched by Avalanche. Boosted by strong liquidity mining offerings, Avalanche grew 129% MoM in terms of TVL. At the end of October, Avalanche’s TVL was measured at $8.38 billion. The difference between these two blockchains decreased from $4.78 billion at the end of September, to the current $1.57 billion. The case of Avalanche is also worth highlighting. A blockchain that went from $184 million at the end of July, to the current levels is simply remarkable. 

Fantom is another blockchain that deserves consideration when talking about DeFi. The highly scalable network has already surpassed Polygon in terms of TVL. At the end of October, Fantom had $5.45 billion in TVL, notably increasing the metric by 287% from the end of September.  

All in all, the DeFi race is a sight to behold with seven blockchains battling for TVL dominion. In less than three months, the space went from being dominated by Ethereum, BSC, and Polygon, to a very competitive landscape with plenty of interesting options that suit different types of investors. It will be worth monitoring the development of this space in the upcoming months.

Solana: a three-headed monster blockchain

As previously mentioned Solana has made its footprint even more visible in the DeFi race. At the end of October, Solana became the second largest network in terms of TVL. Reaching $24.9 billion on its way to surpass BSC. Its TVL grew 35% MoM, and now represents 11.32% of the industry’s total.

Slowly, Solana dapps have positioned themselves as integral pieces of the DeFi industry. For instance, Raydium, an Automated Market Maker (AMM) that also serves as a liquidity provider, became one of the most used DeFi dapps in the entire industry. In October, Raydium attracted over 238,000 UAW, lagging only PancakeSwap, and 1inch in that regard. Serum, the Decentralized Exchange (DEX) that benefits from Raydium’s AMM, reached $1.6 billion in TVL at the end of October. 

Also, it is worth noting that Saber, Marinade Finance, Sunny, and Orca, all have at least $1 billion in TVL in their respective protocols. Creating a very complete DeFi ecosystem within the network. 

But we should not consider Solana as a DeFi-only platform. This network might present one of the strongest NFT markets behind Ethereum. Despite hosting several NFT collections that are clear doppelgangers from notable Ethereum collections, the market is finding its base. As proved by Solanart, the third marketplace in terms of trading volume in October. 

The case for Solana is just strengthened by looking at the upcoming game offer. Star Atlas, one of the most hyped games in the wider ecosystem will be hosted on this network. The play-to-earn space exploration strategy MMORPG gets company from the survival shooter Decimated and the role-playing game Aurory.

In summary

The dapp industry is probably living its best moment as all three main categories are experiencing organic growth in both usage and value. Games are still the main driver behind the blockchain’s usage. Several of these gaming projects, besides the incumbent virtual worlds, have already announced virtual lands as crucial parts of their development. For instance, Axie Infinity, Splinterlands, Aavegotchi, Dark Country, and many will integrate land features into their game mechanics. With the recent media attention for the metaverse, the concept of virtual land ownership will gain ground with a mass audience. We expect the importance of decentralized virtual worlds to grow even further. 

The NFT space might be cooling down after back-to-back impressive months. After consecutive months with more than $4 billion in trading volume, October saw once again $4.2 billion in trading volume. Even though some of the most important Ethereum collections are in the midst of a natural consolidation period, marketplaces on other blockchains like Solanart, AtomicMarket, and PancakeSwap’s own platform, are generating value. Also, it is worth mentioning that the floor market cap of NFTs is on the rise.

This is one of the most important metrics when assessing an NFT project, so having visibility on it is essential. Overall it is important to look at the floor price, while actual valuation that considers rarity and other kinds of metrics add another layer. Using DappRadar’s revamped NFT page, as well as our own portfolio tracker and valuation tools, you can gain this type of insight.

Last but not least, DeFi. As mentioned in DappRadar’s previous industry reports, DeFi was some kind of sleeping giant. The space is getting more mature and consolidated, with renowned blockchains playing a vital role in the decentralized finance industry. Ethereum has established itself as a network for whales, whereas Solana, BSC, and other blockchains will continue to attract new users, as we take one step closer to mass adoption in DeFi land as well.

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