DeFi TVL Hits $192B with Best Performance since February 2022

DappRadar May Industry Report 2024
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DappRadar’s Dapp Industry Report for May 2024

This past May, the dapp industry has been on a bullish trend and continues to build momentum. While everyone is expecting the beginning of the next bull run, we might be right in the middle of it. Read this report to explore all the metrics, sectors, and performance of the dapp industry.

Key Takeaways 

  • Daily Unique Active Wallets (dUAW) have maintained at 10 million. Social dapps witnessed a 29% surge, nearing 2 million in dUAW. Meanwhile, gaming continues to lead, maintaining a dominant 30% share in the dapp industry.
  • The DeFi TVL reached $192 billion, a 17% increase from the previous month and the best performance since February 2022, driven by rising token prices, especially ETH, which increased by 25%.
  • NFT trading volume dipped by 13%, but sales count increased by 3%, indicating strong demand for NFTs despite the average price dropping.
  • Blur dominates the NFT market by trading volume with $452 million, but OpenSea leads by the amount of traders which are more than 239,000. 
  • Web3 exploits and losses are on a downward trend with $52 million lost this month. Despite a 271% increase from last month, the seven-month average loss of $107 million shows a 51% decrease.

Table of Contents

  1. Dapp industry overview
  2. Social dapps lead our UAW rankings
  3. Best DeFi TVL performance since February 2022
  4. NFT prices drop as sales rises and trading volume falls
  5. Blur dominates volume, Opensea leads in traders
  6. Monthly exploits average $107M, down 51% in May
  7. Conclusion 

1. Dapp industry overview

The dapp industry continues its bullish trajectory in Unique Active Wallets (UAW), maintaining the 10.4 million dUAW this month. 

Gaming leads the segment with 3.13 million daily UAW, showing a 7% increase from the previous month. This continued growth highlights the strong engagement and expanding user base within the gaming dapp sector. Gaming now accounts for 30% of the total dapp activity, cementing its dominance in the industry.

The DeFi segment has seen a significant decline, dropping by 21% to 1.75 million daily UAW. Despite this drop, DeFi maintains a 17% share of the overall dapp activity.

The NFT sector experienced an 11% growth, reaching 1.52 million daily UAW. This increase underscores the steady interest in NFT trading and collections. NFTs now represent 15% of the total dapp activity. 

Social dapps observed a notable 29% rise, reaching 1.92 million daily UAW. This increase is driven by the growing popularity of social dapps like Fantasy Top, a SocialFi game that allows users to buy and sell virtual trading cards of crypto-affiliated X accounts. Players are rewarded in ETH, Blast’s Gold reward tokens, native “fan points,” and additional packs of trading cards.

Looking at the performance of chains, NEAR continues to be leading, driven by the popularity of dapps like HOT Game and Kai-Ching. In second place, we have Polygon driven by gaming ecosystem Matr1x and the EARNM Rewards dapp, which focuses on the ‘earn-to narrative’.

Source: DappRadar Chain Rankings

But, the top performer this month has been Arbitrum, which had a 122% increase in its UAW driven by the social dapp UXLINK, which offers a DEX and infrastructure for others to build upon. Different from other one-way, following-only relationships, UXLINK forms two-way, friend-type social relationships, and enables real-time interactions by UXGroup usage scenario.

2. Social dapps lead our UAW rankings

Continuing our analysis of the dapp industry we have to look at the top dapps by UAW this month, and we can safely conclude that gaming still has a strong hold of the dapp industry as 4 project in the list are related to the gaming industry. 

Top 10 dapps by UAW in May 2024
Source: DappRadar UAW Rankings

Kai-Ching remains the leading dapp as well this month, followed by UXLINK and HOT Game which we mentioned in the section above. It’s interesting to see how the social sector keeps being one of the most performant ones, as the social dapps are managing to actively engage the users.

The top performing dapp this month has been the gaming platform BoomLand. Moreover, Boomland recently announced a 250 million BOOM play-to-airdrop. Season 1 will begin in June, celebrating their launch on Immutable zKEVM.

3. Best DeFi TVL performance since February 2022

DeFi’s Total Value Locked (TVL) has shown a remarkable bullish trend since the beginning of the year, and continues in this trajectory. This month it reached $192 billion, which marks a 17% increase from the previous month, and the best performance so far since February 2022. This growth is driven by the increases of the token prices, especially ETH which this month had an increase of 25%.

As we’ve seen in the first chapter, the DeFi UAW was down, meaning that most trading was speculative based on ETH ETF, and likely more trading happened on CEXes.

Ethereum holds the bigger portion of the whole DeFi’s TVL, and this month its dominance is at 68%. Followed by Solana, which in the past months has been propelled by memecoin trading and DeFi activity on its network. Moreover, the native SOL token has surged by 11% in the past 30 days. 

The narrative around the Layer-2 networks continues to be strong, but the real top performer this month has been Merlin. It has become the largest Bitcoin sidechain and more than three times as large as the payments-focused Lightning Network. More than half of Merlin’s $1 billion is held in Solv Finance, a protocol that allows users to deposit wrapped bitcoin and receive “Solv Points” in return. Solv and Merlin are running a promotion encouraging users to farm for points and tokens.

It is safe to conclude that the airdrop narrative is still going strong in the dapp industry, but will this narrative be enough to maintain consumer interest?

4. NFT prices drop as sales rises and trading volume falls

The NFT market has been showing an upward trend in recent months, as illustrated in the image below. However, this month we’re witnessing a 13% dip in trading volume, but it is accompanied by a 3% increase in sales count. What does this signify? The demand for NFTs remains strong, just the NFTs are becoming cheaper.

Examining the top chains by NFT trading volume, Ethereum continues to lead with a 32% market share. Blast follows with 17%, having gained significant traction due to its Blast points program. This incentivization has driven increased activity as users launch and trade NFT collections to maximize their airdrop rewards.

Furthermore, our chain rankings reveal that Bitcoin Ordinals have lost momentum, with a substantial 76% decrease in volume. Was the hype around BTC Ordinals short-lived?

Additionally, Polygon and Immutable have emerged as key players, ranking among the top six chains by NFT trading volume. Both chains have seen volume increases, fueled by popular games such as Gas Hero and Matr1x on Polygon, and Guild of Guardians and Gods Unchained on Immutable.

5. Blur dominates volume, Opensea leads in traders

The NFT marketplace landscape is fiercely competitive, with platforms like Blur, Magic Eden, and OpenSea vying for the biggest part of the industry.

Blur remains a significant player with an average NFT price of $721.76. Despite competitive pressures, it shows strong performance in trader activity (+59%) and sales volume (+68%). Blur’s focus on premium NFTs and Blast Points continues to attract high-value transactions.

Magic Eden has recently overtaken Blur in trading volume, driven by Runes trading and new features like the Diamond rewards program. With an average price of $733.34, Magic Eden’s diverse offerings and strategic partnerships have solidified its top position.

OpenSea faces challenges despite having the most traders. Its average price is $101.17, reflecting a broad user base, making it an entry point for new NFT buyers, despite rising competition. 

OKX NFT Marketplace, with an average price of $763.30, focuses on higher-value transactions but has experienced significant declines in trader activity (-43%) and volume (-65%), due to the fact that recently the interest in trading of Bitcoin Ordinals has decreased. 

And lastly, shows remarkable monthly growth with increases in trader activity (+35%) and trading volume (+385%). But, if we look deeper we can see that it has begun to move towards a downward trend, and its momentum might have lasted just few weeks.

6. Monthly exploits average $107M, down 51% in May

The exploits and money lost in the Web3 industry appear to be on a downward trend, with $52 million stolen this month. Although this represents a 271% increase from last month, the average loss over the past seven months has been $107 million per month, therefore this May marks a 51% decrease from the average.

This month, some of the top exploits included:

Gala Games experienced a security incident on May 20, where a hacker exploited an access control vulnerability in the GALA token contract. The hacker seized control of an admin address and minted 5 billion GALA tokens worth $216 million. They quickly sold 592 million tokens for $21.8 million in ETH on decentralized exchanges like Uniswap and 0xProject, causing the token’s price to drop by 20%. Gala Games detected the exploit, activated their blocklist function (implemented a year earlier), and froze the rogue wallet, mitigating further damage.

Sonne Finance on Optimism was exploited using a known donation attack on Compound v2 forks, resulting in a loss of approximately $20 million.

One thing we can always emphasize: Be SAFU. Security should always be an important part of your journey in Web3.

7. Conclusion

​​The dapp industry experienced a bullish trend this past May and continues to build momentum. While everyone is anticipating the next bull run, this time may be different. More and more projects are developing incredible solutions with cutting-edge technology. 

Perhaps, just perhaps, we are already in the midst of a bull run. Only time will tell what the future holds. Let’s see what happens next.

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