Flow Dapp Ecosystem Q2 Report

Flow Q2 report
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Flow Blockchain Thrives: Dominating NFT Transactions into Q2 2023

Flow Blockchain, having cemented its position as a top-tier platform in the world of NFT transactions by 2022, continues its strong performance into Q2 2023. The third-largest blockchain platform for NFT transactions, Flow has consistently proved itself as a leader in all-time sales. This report will delve into Flow’s performance in various domains during the second quarter of 2023, exploring the trends and developments that have driven its sustained growth.

Key Takeaways

  • Flow had 13,169 daily unique active wallets in Q2 2023, with 60% coming from gaming and the remaining 40% from NFT trading activity.  
  • NBA Top Shot and NFL All Day are leading NFT marketplaces on the Flow blockchain, with respectively 54% and 19% dominance.
  • Three mobile games by Joyride Games were the top dapps on the Flow blockchain in Q2 2023. 
  • Despite Increment Finance’s 9.5% TVL decrease in Q2 2023, DeFi lending surged 100% and Liquid Staking increased 12%. 

Table of Contents

  1. Flow On-Chain Activity Overview
  2. Flow adds innovation into the NFT market
  3. NBA Top Shot draws over 1.5 million users to Web3
  4. From goals to knockouts: Sports NFT collections flourish on Flow
  5. Expanding horizons: Flow blockchain games now available on iOS
  6. The rise of Flow staking: 70% of circulating supply locked-in
  7. Conclusion

1. Flow On-Chain Activity Overview

Disclaimer: The report’s calculation for transaction count does not reflect all the transactions executed on a blockchain; it considers all the transactions from the dapps tracked by DappRadar on that specific network.

Flow is a blockchain designed for gaming and other applications that require high throughput and low latency. In Q2 2023, Flow saw significant growth in on-chain activity, with a number of new games and applications launching on the platform.

Flow's unique active wallets in Q2 2023 and in 2022

The total number of UAWs in Q2 2023 increased to an average of 13,169, exhibiting a growth of approximately 1.5% from Q1 2023’s count of 12,971. This rise indicates an expanded user base, translating into greater engagement and transactional efficiency.

Dominance of Flow's activity in Q2 2023

In terms of category-specific growth, the number of UAWs in Games saw a notable increase of about 11% from 6,265 in Q1 2023 to 6,971 in Q2 2023. This indicates Flow’s rising prominence in the world of blockchain gaming, thanks to its high-speed and low-cost transactions. However, the NFT UAWs presented a different scenario, witnessing a decrease of approximately 26% from 6,294 in Q1 2023 to 4,665 in Q2 2023. While this signifies a contraction in the Flow NFT market, it also falls in line with the overall contraction of the entire NFT ecosystem, as seen in this report

In the past three months we did witness an overall upward trajectory in the total transactions count. The number of transactions in Q2 2023 increased to 29 million, up by approximately 3% from Q1 2023’s figure of 28 million. 

However, according to Flowscan, in Q2 2023 Flow recorded 51.6 million transactions. This represents a 12% decrease from the previous quarter. 

2. Flow adds innovation into the NFT market

Despite experiencing a decline in trading volume, NFTs on Flow also experienced a new wave of innovation thanks to the launch of Doodles 2. The drop in NFT trading volume can be addressed to a myriad of factors such as market dynamics, individual project performances, and global economic trends affecting the NFT market, as we’ve previously mentioned in our industry reports.

Looking into the numbers, the first quarter of the year recorded $23.5 million in trading volume, that number dropped 39% to $14.4 million in Q2 2023. In addition, the number of sales dropped about 30%, from 1.4 million to 1 million. 

The launch of Doodles 2 on Flow can be seen as a strong move. This partnership was born at the end of Q1 2023 out of the Doodles community’s desire to leverage Flow’s composability feature. This then allows NFTs to be portable and interoperable across various platforms. Doodles 2 not only represents a solid cross-chain relationship between Ethereum and Flow, but also highlights the power of open systems in generating compelling user experiences.

The launch of Doodles 2 illustrates Flow’s ability to support large-scale, complex communities tied to blue-chip brands. The event showcased the superpower of composability, where content and experiences evolve based on fan and community input. This development signals Flow’s potential as a fertile ground for other blue-chip NFT projects, thanks to the flexibility of Cadence and Flow’s account model.

Flow’s embracement of the Bored Ape Yacht Club NFT smart contract in Cadence further exemplifies its suitability for handling well-known NFT projects. It provides another compelling case for Flow’s potential to foster new partnerships with established Web3 brands, consequently expanding its influence in the NFT market.

3. NBA Top Shot draws over 1.5 million users to Web3

The NFT marketplace on the Flow blockchain witnessed dynamic activity in Q2 2023, primarily driven by sports-related platforms. NBA Top Shot, a marketplace offering officially licensed NBA collectibles as NFTs, topped the charts with a trading volume of $6.7 million, accounting for 54% of the market share. This platform has captivated fans and collectors alike, merging their love for basketball with the innovative technology of NFTs.

Flow's NFT marketplaces

NBA Top Shot has significantly contributed to the Web3 onboarding of over 1.5 million individuals on Flow, setting a trailblazing path for other sports-centric projects such as OneFootball and NFL ALL DAY. The successful integration of major sports leagues with NFT technology on Flow has garnered attention from prominent brands including Ticketmaster and Mattel. It has also attracted blue-chip NFT projects like Doodles and game developers like Joyride and Bloxmith, reflecting the blockchain’s capability to support and scale a diverse range of experiences.

Another key player in the Flow blockchain’s NFT marketplace landscape is NFL All Day. Despite being in the NFL’s off-season, this platform managed to clock a substantial trading volume of $2.4 million, representing 19% of the market dominance. Similar to NBA Top Shot, NFL All Day offers collectors the opportunity to purchase and trade officially licensed video highlights from NFL games as NFTs.

4. From goals to knockouts: Sports NFT collections flourish on Flow

The burgeoning popularity of sports-related NFT collections took center stage on the Flow blockchain in Q2 2023, complementing the dominance of sports-based marketplaces as highlighted in the previous section. Many of these collections operate on their unique platforms, blurring the lines between collections and marketplaces, and amplifying user engagement through direct purchase opportunities.

Following our earlier discussions on NBA Top Shot and NFL All Day, another notable mention is LaLiga Golazos. This unique collection, featuring remarkable goals from Spain’s premier football league, clocked a trading volume of $849,510. UFC Strike, offering collectors an array of iconic moments from the exhilarating world of mixed martial arts, garnered a trading volume of $682,789. Meanwhile, cricket collectible platform FanCraze achieved a trading volume of $420,137.

These flourishing collections underscore the escalating trend of sports-related NFTs as vehicles for fans to cultivate deeper connections with their favorite teams and cherished moments. The integration of blockchain technology and the ability to buy, sell, and trade these digital collectibles via peer-to-peer marketplaces have revolutionized the realm of sports memorabilia.

The advent of sports-related NFTs extends beyond fan engagement, presenting teams and leagues with lucrative revenue opportunities. The potential to monetize game-winning instances or championship victories through the sale of official NFTs unveils a novel income source. Moreover, it stimulates increased fan engagement and loyalty, solidifying the appeal of sports-related NFTs as a multifaceted asset in the Flow ecosystem.

5. Expanding horizons: Flow blockchain games now available on iOS

During the past quarter the Flow blockchain hosted a variety of Web3 games, each demonstrating unique engagement levels and transactional volumes. Leading the pack was Trickshot Blitz with an average of 2,657 daily UAWs and 4.4 million transactions for the quarter. Solitaire Blitz and Carrom Blitz followed closely with 1,370 and 3,468 daily UAWs respectively, and transaction volumes of 4.3 million and 4.2 million. FanCraze, though trailing with 768 daily UAWs, still garnered a significant transaction count of 2.9 million, showcasing the interest and activity around these games in the Flow ecosystem.

This quarter Flow released a new SDK for game building tool Unity. This updated SDK has Wallet Connect integrated, allowing developers to easily connect their Web3 applications to user wallets. Above all, the SDK now also supports Apple’s iOS operating system, adding a lot more potential for success for game developers.

6. The rise of Flow staking: 70% of circulating supply locked-in

Despite not being traditionally known for DeFi, the Flow blockchain has seen encouraging developments in this domain in Q2 2023 thanks to Increment Finance. At the start of the quarter Increment Finance had a total value locked (TVL) of $6.3 million, which dropped 9.5% to $5.7 million. Even though the TVL experienced a decrease, certain services within the dapp saw impressive growth, showcasing Flow users’ increasing interest in DeFi.

Increment Finance provides an array of DeFi services, including a permissionless automated market maker (AMM) swap, a decentralized money market, and non-custodial liquid staking. These services allow users to access diverse DeFi products on the Flow blockchain, thus enhancing the liquidity and functionality of the network.

Examining the metrics of Increment Finance reveals an intriguing trend: the lending option experienced a remarkable 100% increase this quarter, indicating a growing interest in decentralized lending solutions among Flow users. In addition to this, the Liquid Staking offering also recorded a 12% uptick in the same period.

Source: Flowscan

These trends are consistent with the broader metrics for the Flow ecosystem. Currently, 70% of the circulating supply of Flow tokens are staked across 445 nodes and 45,409 delegators. This high level of participation in staking activities strengthens the Flow network, reduces the potential for price manipulation, and highlights the long-term benefits that users see in the ecosystem.

7. Conclusion

The second quarter of 2023 marked another period of sustained expansion for the Flow blockchain. A notable increase in unique active wallets and transaction volumes unambiguously attest to Flow’s capacity to cultivate a vibrant, engaged community. The substantial surge in these key performance indicators reiterates Flow’s scalability and its readiness to deliver consumer-oriented blockchain experiences.

Despite a slight downturn in NFT sales and trading volume in Q2 2023, Flow’s adaptable nature shone through its innovative initiatives such as Doodles 2. 

Furthermore, sports-centric NFT marketplaces and collections, including NBA Top Shot and NFL All Day, have made a lasting impact on Flow. Their considerable trading volumes and market prevalence highlight Flow’s potential to revolutionize sports fan engagement and create new avenues for revenue generation.

Flow’s allure in the gaming industry continues to strengthen. With the introduction of an advanced Flow SDK for Unity, and the success of Joyride’s various Blitz games, the platform has greatly expanded its functionalities and use-cases. 

Perhaps the most remarkable advancement in the past quarter, comes from the DeFi sector. While DeFi isn’t Flow’s primary area of focus, Increment Finance flourished to become Flow’s premier DeFi dapp. High token staking rates reflect the resilience and user-focused appeal of the Flow ecosystem, indicating potential pathways for future expansion in this area.

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