DappRadar’s Dapp Industry Report for April 2024
After a bullish period throughout the past quarter, it appears that the Web3 market is entering a consolidation phase. Despite some declines in key metrics, overall activity remains strong, with new opportunities and innovative projects continuing to emerge across the dapp landscape. This Dapp Industry Report for April 2024 will provide a detailed analysis of these trends and developments, shedding light on the shifting dynamics that shape the industry’s future.
Key Takeaways
- Daily Unique Active Wallets (dUAW) have reached a new all-time high of 10.6 million. Social dapps witnessed a 11% surge, nearing 1.5 million in dUAW. Meanwhile, gaming continues to lead, maintaining a dominant 28% share in the dapp industry.
- The Total Value Locked (TVL) in the DeFi sector has decreased by 6%, reaching $164 billion. Base and Blast have outperformed Optimism and Polygon in TVL.
- NFT trading volume decreased to $1.3 billion, but the sales count saw an increase and reached 4.12 million.
- Runestones became the top NFT collection by trading volume, taking the top spot of the Bored Ape Yacht Club.
- Blur loses its spot as the top NFT marketplace, and it’s overtaken by Magic Eden with $108 million more in trading volume.
- $13.6 million in crypto assets were lost due to hackers exploiting smart contracts and duping investors, which is the lowest amount of monthly value lost since 2021.
Table of Contents
- Dapp industry overview
- Gaming dapps continue to lead UAW rankings
- DeFi’s TVL down to $164 billion
- NFT trading down to $1.35 billion, but over 4 million sales
- Magic Eden takes the spotlight of Blur
- Blockchain gaming leads Web3
- An all-time-low for exploits and hacks
- Conclusion
1. Dapp industry overview
The dapp industry continues its bullish trajectory in Unique Active Wallets (UAW), reaching a record high of 10.6 million dUAW this month. This growth signals increasing interaction with dapps and is a promising indicator of the industry’s expansion. Another contributing factor to this milestone is our expanding portfolio; as we track more dapps and integrate new chains, the Web3 industry continues to evolve and build.
When analyzing specific segments, gaming leads with 2.9 million daily UAW, showing a 17% increase from the previous month. The DeFi segment remains steady, maintaining its 2 million daily UAW from the last reporting period. The NFT sector has seen a modest 3% growth, reaching 1.3 million daily UAW.
The social sector has observed an 11% rise as more social dapps gain traction. A notable example is Fantasy Top, a SocialFi game allowing users to buy and sell virtual trading cards of crypto-affiliated X accounts, which can be used to compete in tournaments. Players are rewarded in ETH, Blast’s Gold reward tokens, native “fan points”, and additional packs of trading cards. Can we confidently declare that the SocialFi season has made a comeback? Looking at the data, we can say so.
In terms of blockchain network performance, Near emerges as the leader in Unique Active Wallets, followed by Polygon and BNB Chain.
For enthusiasts and analysts seeking a more detailed view of blockchain performance, our chain rankings provide thorough insights, covering a broad range of metrics to gauge the health and trends of the dapp industry.
2. Gaming dapps continue to lead UAW rankings
Continuing the narrative above, we decided to further look at the leading dapps for April 2024, ranked by Unique Active Wallets (UAW). This analysis provides a snapshot of the current market leaders while offering insights into the evolving landscape and potential shifts in prominence as the year progresses.
A key highlight from this month’s rankings is the continued dominance of the shopping platform KAI-CHING in the Web3 domain, closely followed by the gamification product HOT Game. Notably, gaming maintains significant representation in the upper ranks, with seven of the top dapps either directly related to gaming or closely tied to the gaming sector. This trend emphasizes the gaming industry’s strong influence within the Web3 ecosystem.
The month also saw a surge in the popularity of DeFi dapps and exchanges. This growth is attributed to fluctuating cryptocurrency and token prices and a growing desire among users to engage in trading activities. The reasons behind the burgeoning interest in DeFi and its implications for the market will be explored in the following section.
3. DeFi’s TVL down to $164 billion
DeFi’s Total Value Locked (TVL) has shown a remarkable bullish trend since the beginning of the year. In Q1 2024, it reached $175 billion, levels last seen in February 2022 during the previous bull run. However, in April, it closed the month with $164 billion, marking a 6% month-to-month decrease.
This decline aligns with the consolidation of token prices after recent gains. The pattern is consistent with typical economic cycles.
Looking at the top chains by TVL, Ethereum maintains its dominance, holding 66% of the market this month. This marks a slight decrease from 70% last month, suggesting that new chains are gaining popularity, like Blast or Base.
This month’s narrative revolves around the new Layer-2 networks launched in recent months, which have attracted considerable attention. Base and the newcomer Blast have surpassed industry veterans like Optimism and Polygon in TVL.
Base’s growth is driven largely by recent memecoin activity, with the chain’s meme token market capitalization exceeding $870 million, though down from $1.6 billion at the start of the month.
Meanwhile, Blast has seen significant interest after its decentralized exchange protocol Thruster Finance raised $7.5 million in a seed funding round led by Pantera Capital. This seed funding round brought Thruster’s valuation to $70 million. Additionally, Blast’s incentive airdrop program awards Blast Points to users who participate in ecosystem activities like borrowing, liquidity provision, and trading. In addition, the network distributes Blast Gold to developers with TVL and user activity, which dapps can either hold on to or distribute to their users.
The emerging narrative around these Layer-2 solutions is exciting and showcases the market’s ongoing evolution.
4. NFT trading down to $1.35 billion, but over 4 million sales
Since December 2023, the $1 billion threshold in NFT trading volume has been consistently achieved. This month, we’ve reached $1.35 billion in trading volume, marking a 13% decrease from last month. However, we’ve seen a 20% increase in the number of sales.
Why is this happening? What explains the rising number of sales?
Several factors could be contributing to this trend. First,this month Runestone, one of the largest Bitcoin Ordinals inscriptions, gained significant popularity. Runes leverage Bitcoin’s existing UTXO model to minimize data added to the blockchain, potentially reducing transaction fees compared to Ordinals. This has made Runestone the NFT collection with the most trading volume in April, surpassing Bored Ape Yacht Club for the first time.
Additionally, all Bitcoin collections have seen increased trading volume, reaching a total of $675 million this month, which is a 32% increase from the previous month. This surge has positioned Bitcoin as the blockchain with the highest trading volume, followed by Ethereum.
Another chain gaining attention and popularity is Blast. Traders are flocking to farm airdrop points via Blur’s new deployment on Blast. While this buzz around points and airdrops may not last indefinitely, with more reward seasons expected, Blast aims to establish lasting dominance in the NFT space.
5. Magic Eden takes the spotlight of Blur
After examining the overall NFT industry, it’s essential to analyze the NFT marketplace landscape. For the first time since Blur launched, it is no longer the top NFT marketplace by trading volume. That spot has been taken over by Magic Eden.
Magic Eden, now allowing the trading of Bitcoin Ordinals, holds the top spot, with Bitcoin Ordinals trading accounting for 70% of the marketplace’s total volume. This underscores their growing popularity. Other factors contributing to Magic Eden’s success include its new Diamond rewards program and a continued partnership with Yuga Labs, which has become increasingly valuable as the NFT studio cut ties with marketplaces not supporting creator royalties.
Further analysis reveals that the conversation in April focused largely on Bitcoin NFTs (Runes and Ordinals). This is evident as both UniSat and OKX NFT Marketplace made it into the top 5 marketplaces of April 2024.
Interestingly, OpenSea continues to lose ground in trading volume and appears unable to keep up with its competition. How this trend will evolve remains to be seen, and it will be fascinating to observe in the coming months.
6. Blockchain gaming leads Web3
As noted in the first chapter, blockchain gaming remains the dominant sector of the dapp industry, with 28% of activity occurring in gaming dapps. This month saw several notable developments, which will be detailed in our upcoming monthly gaming report, scheduled for release on 16 April 2024.
To highlight the gaming industry’s adoption, we analyzed the NFT collections with the most traders.
Unsurprisingly, the top performers are gaming NFT collections. This month, Open Solmap stands out, offering an innovative approach that allows users to own and develop digital plots representing Solana’s transaction history and block space.
Furthermore, this month we’ve seen a growing number of investments toward gaming projects, which we will further share in our gaming report. But, what’s safe to say is that gaming leads Web3.
7. An all-time-low for exploits and hacks
According to the REKT Database, Q1 2024 ended with $407 million lost to exploits and hacks, contrasting with the overall positive trajectory of the industry. However, in the first month of the second quarter, we’re seeing reasons to be optimistic again, with ‘just’ $13.6 million lost, marking an 86% decrease from last month.
No particular incident stands out this month, so we analyzed the largest ones, both involving exploits.
The first incident involved a contract related to Hedgey Finance, resulting in approximately $2 million in losses. The exploiter used the Balancer Vault flash loan exploit to target the victim contract, manipulating the createLockedCampaign function. Other malicious actors unrelated to the primary exploiter also took advantage of the vulnerability in the victim contract.
The second incident occurred at XBridge, a cross-chain platform linking Ethereum mainnet and BNB Chain. On 24 April 2024 a smart contract vulnerability allowed an attacker to siphon off about $1.9 million in assets. The flaw enabled the attacker to remove funds seamlessly from the protocol.
While this isn’t a total victory, the downward trend is encouraging. Let’s hope the losses continue to diminish and eventually reach zero.
8. Conclusion
April 2024 showcased a nuanced performance across the Web3 industry, revealing both strengths and challenges. Despite modest dips in NFT trading volume and DeFi TVL, the gaming sector remained resilient, securing its dominant position with a solid 28% share of dapp activity.
The NFT marketplace landscape saw a significant shift, with Magic Eden overtaking Blur for the first time, driven by the rapid rise of Bitcoin Ordinals. This shift, alongside increased activity on new Layer-2 solutions like Blast and Base, indicates a market hungry for innovation. The rise of new chains and marketplaces also points to the competitive and rapidly evolving nature of the sector.
DeFi’s TVL contraction aligns with the natural ebb and flow of market cycles, yet the emergence of Layer-2 chains offers a promising glimpse of future scalability and engagement. Meanwhile, security remains a top concern, but the sharp decline in losses due to hacks and exploits is an encouraging sign.
Overall, April painted a picture of a maturing Web3 industry. It’s a space adapting to challenges while demonstrating agility and creativity in the face of changing market dynamics. As new trends take shape, the industry’s evolution will be driven by both innovation and a commitment to overcoming challenges.
