The DeFi, Gaming, and NFT sectors on alternative chains all see a rise in activity in February
Terra, Fantom, BSC, and Ronin gained ground in February, but Flow and Avalanche made the biggest moves towards the Ethereum throne. Pushed forward by multichain dapps like NFT Trade, Avalanche saw its NFT trading volume jump 25% in a month. These are the latest numbers from the DappRadar Industry Report for February 2022.
The report details that blockchain activity overall has not decreased, despite the bearish climate on crypto markets. About 2.48M unique active wallets connect to a decentralized application every day. Looking at the different categories of dapps across the blockchain ecosystem, Ethereum still holds a dominant position. Yet other chains are becoming user favorites.
Despite the positive note about on-chain activity, not every product category has seen the same amount of traction. The DeFi sector is the one struggling the most because of the falling valuations of crypto tokens. Despite that DeFi dapps still held $180 billion in assets locked at the end of February. Ethereum saw its dominance over the sector fall from 65% to 61%. At the same time, chains like Terra and Fantom solidified their spot on the map.
Success found in NFTs and gaming
While most popular NFT projects are built on Ethereum, the chain is actually not the one registering the highest trading volume in February. In fact, Ronin, the new home of the Axie Infinity ecosystem takes the top spot, while the game’s NFT collection surpassed $4 billion in all-time trading volume.
Following the same trend is Avalanche. The Avalanche blockchain boosted its NFT trading volume by 25% in February. NFT Trade, an NFT marketplace with a multichain approach (Ethereum, BNB, Polygon, and Avalanche), has increased its volume by 40% on the Avalanche network from $10.7 million to more than $15 million since the end of January.
Other chains, like Flow for example, have also seen heightened NFT trading activity. Flow’s BloctoBay doubled its trading activity in February, while marketplaces like Magic Eden оn Solana or Obkt and Hic et Nunc оn Tezos show that NFTs can thrive outside Ethereum.
When it comes to gaming, Ethereum’s misgivings become even more clear. While games and virtual worlds like The Sandbox and NFT Worlds are bringing in a lot of users and trading volume, the play-to-earn movement has focused on alternative chains. To add more salt into the wounds, The Sandbox moved its assets to Polygon recently. Furthermore, NFT Worlds moved its token economy over the Polygon, dramatically emphasizing a departure from Ethereum.
Can Ethereum keep the throne?
While data points to the fact that Ethereum might be losing traction across all sectors, there is a light at the end of the tunnel. The Ethereum team has been hard at work for months now, piecing together how to move the chain to a proof-of-stake consensus model.
According to the official announcements, this transition will bring numerous improvements to the fundamental functionality of the blockchain. Most importantly, the proof-of-stake consensus mechanism will allow Ethereum to process more transactions faster, thus limiting the amount of gas fees charged for each transaction.
This shift will make Ethereum much more competitive, especially with high-throughput chains like Solana, Terra, and Fantom. In this sense, Ethereum has the potential to keep the throne. However, this will only be possible once the proof-of-stake mechanism becomes the underlying consensus for the chain. When will Ethereum 2.0 launch, that’s the question. Read the full DappRadar Industry Report here, and get all the insights you need to stay on top of the game.
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