DappRadar’s Dapp Industry Report for August 2024
August 2024 recorded a record-number of active wallets interacting with decentralized applications, while both the NFT trading volume and value locked in DeFi saw a noticeable drop. However, while trading volumes dropped, the number of NFTs being traded increased by 17%.
The final month of summer in some regions, or the last month of winter in others, brought a measure of instability to the Web3 industry. Token prices for major projects saw declines, although memecoins continued to show resilience and strength.
As the month came to a close, the industry faced a period that could be described as neither exceptionally positive nor negative. However, it’s important to note that progress is still being made—strong projects are continuing to grow, and even during downturns, the overall industry remains on a path of innovation and development.
In this report, we will review August’s performance and explore the potential trends and developments that September and the months ahead may bring.
Key Takeaways
- Daily Unique Active Wallets (dUAW) reached a record-breaking 17 million this month, reflecting a 9% growth from the previous month. For the second consecutive month, the ‘Other’ category—dominated by AI and high-risk dapps—surpassed gaming, now holding 29% of industry dominance.
- DeFi Total Value Locked (TVL) dropped to $144 billion, marking a 14% decline compared to the previous month, in line with broader market trends. However, the DeFi sector remains a top area for investment, accounting for 25% of total funding this month, with $196 million raised.
- NFT trading volume continued its downward trajectory, reaching a yearly low of $471 million, down 16% from the previous month. Despite this, NFT sales increased by 17%, indicating that while more NFTs are being traded, their average prices have fallen significantly—now five times lower than in March 2024, when the market peaked.
- OpenSea retained its position as the leading NFT marketplace in terms of both trading volume and active traders. However, the platform’s future remains uncertain after receiving a Wells notice from the U.S. Securities and Exchange Commission, which suggests the digital assets sold may be classified as securities.
- Exploits and hacks in the dapp industry saw a significant reduction this month, with losses amounting to $69 million—a 72% decrease compared to the previous month, despite no major incidents.
Table of Contents
- Dapp industry overview
- Social and DeFi dapps lead our UAW rankings
- DeFi TVL declines to $144 billion amid market volatility
- NFT trading volume drops while sales activity remains steady
- OpenSea faces SEC scrutiny but maintains market leadership
- Exploits and hacks decline by 72% despite $69 million in losses
- Closing words
1. Dapp industry overview
The dapp industry continues to demonstrate a strong upward trend in activity. This month, the average daily Unique Active Wallets (dUAW) reached 17 million, marking a new record high and reflecting a 9% increase from the previous month.
Notably, this month marks the second consecutive month where the gaming sector has lost its leading position within the dapp industry. Gaming’s dominance has declined to 24%, while the ‘Other’ category, which includes AI-based dapps such as DIN and Alaya AI, has emerged as the new leader with a 29% market share.
The social sector has also maintained its positive trajectory, gaining significant traction in recent months. It now accounts for 23% of industry activity, supported by 3.9 million dUAW.
Both the DeFi and NFT sectors have shown identical performance this month, each achieving a 12% share of industry dominance and averaging 2 million dUAW.
In terms of blockchain performance, opBNB has secured the top position, driven by the success of its leading social dapp, CARV. Following opBNB, NEAR occupies the second spot, bolstered by the popularity of its shopping and social dapp, KAI-CHING. Solana, known for its resilience, takes the third position with Raydium, a leading DeFi dapp. Base ranks fourth, primarily due to Uniswap trading activity, while Polygon holds the fifth position with its EARNM Reward dapp.
For real-time updates and more detailed insights, please refer to our Chain Rankings.
2. Social and DeFi dapps lead our UAW rankings
As we continue to examine the dapp industry, it is evident that the social sector maintains a significant presence in the market.
This month, CARV emerged as the leading dapp in terms of active wallets, followed by Raydium, which has gained popularity due to increased trading activity around Solana-based memecoins. Notably, CARV’s position was strengthened by its collaboration with Binance in the Web3 Wallet x CARV Airdrop campaign, which ran from August 5 to August 26, 2024. This initiative aimed to distribute a total of 1,000,000 CARV tokens along with a 30,000 USDT prize pool to participants.
In addition to its airdrop campaign, CARV partnered with HashKey Capital and Aethir to launch “Decode: Legacy,” promoted as the world’s first crypto-themed immersive theater experience. This innovative event, which premiered at the Token2049 conference in Singapore, combined elements of cryptocurrency history with interactive storytelling to demonstrate practical applications of decentralized technologies.
To keep abreast of ongoing developments and trends within the dapp industry, we encourage readers to regularly check our updated rankings.
3. DeFi TVL declines to $144 billion amid market volatility
Despite fluctuations in the broader dapp industry, the DeFi sector remains a cornerstone of Web3, essential for its foundational role in decentralized finance. However, this month has seen a decline in DeFi’s Total Value Locked (TVL), which fell to $144 billion, representing an 18% decrease from the previous month. This downturn can be attributed to recent volatility in token prices, with ETH experiencing a notable 22% drop since the beginning of the month.
Analyzing the top chains by TVL, Ethereum continues to hold the leading position, although its TVL has now fallen below the $100 billion mark. This trend also highlights the rising prominence of Layer-2 solutions, such as Base, which is currently in an airdrop phase, contributing to increased activity. Other emerging chains like Blast and Aptos are also gaining traction, underscoring the growing interest in more scalable blockchain alternatives.
Despite this month’s overall negative trend in TVL, it’s important to note the positive developments in funding within the DeFi space. According to RootData, decentralized finance and artificial intelligence projects attracted the most investments, with DeFi accounting for 25% of total funding, amounting to $196 million. Notable examples include Story Protocol by PIP Labs, which raised $80 million in a Series B funding round to enable writers to monetize their content directly on the blockchain. Additionally, Bridge secured $58 million to develop a global stablecoin payment network.
4. NFT trading volume drops while sales activity remains steady
Just a few months ago, excitement around the NFT market was palpable, with trading volumes exceeding $2 billion. However, since then, the market has taken a downward turn. This August followed the same pattern, with NFT trading volume reaching $471 million, a 16% decline from the previous month and a 78% decrease from this year’s peak.
Interestingly, despite the drop in trading volume, the number of NFT sales has not seen a similar decline. In fact, sales have increased by 17% compared to the previous month, and decreased only by 1.3% since the yearly high. This suggests that NFTs are still being traded a lot, but at significantly lower prices—approximately five times cheaper than five months ago.
What is driving this trend? One factor could be the fading influence of the farming phenomenon on Blur, allowing OpenSea to reclaim its position as the leading NFT marketplace in both trading volume and number of traders, as we will explore further in the next section. Additionally, as mentioned in our previous July report, gaming-related NFTs are gaining traction. Collections like Gods Unchained and Guild of Guardians have become some of the most actively traded, reflecting a shift toward utility-driven NFTs.
In terms of chains, Ethereum continues to lead in NFT trading volume, though Polygon is closing the gap. However, it’s clear that this has been a challenging month for NFTs across most chains, many of which have seen declines in volume, as detailed in our Chain Rankings.
Overall, the NFT market continues to face headwinds, mirroring broader uncertainties in the cryptocurrency sector.
5. OpenSea faces SEC scrutiny but maintains market leadership
As highlighted in the previous section, the NFT market has been impacted by broader instability and the ongoing downturn within the cryptocurrency sector. This trend is also evident in the decline in traders and trading volume across the leading NFT marketplaces. However, market conditions may not be the only factor influencing OpenSea’s recent performance. Toward the end of the month, OpenSea’s CEO revealed that the platform received a Wells notice from the U.S. Securities and Exchange Commission (SEC), alleging that the digital assets sold on the marketplace may qualify as securities.
Despite these challenges, OpenSea has retained its position as the leading NFT marketplace in terms of both trading volume and active traders, outperforming competitors like Blur. Blur, in particular, has seen a steady decline in both trading volume and user engagement, largely due to the waning interest following its airdrop campaign.
Looking ahead, the involvement of the SEC could introduce further uncertainties for OpenSea and the broader NFT industry, potentially leading to a period of heightened regulatory scrutiny.
6. Exploits and hacks decline by 72% despite $69 million in losses
This month, while no major hacks or exploits shook the dapp industry, the total losses due to exploits and hacks amounted to $69 million. Although significant, this represents a 72% decrease from the previous month. Looking at the rest of the year, we’d argue that August has been on par with the monthly average seen throughout the year.
Two notable exploits occurred during this period. The first, and largest, took place on August 21, 2024. A victim lost $55.43 million in DAI after inadvertently signing a phishing transaction, which compromised their DeFi Saver Proxy and allowed the attacker to drain all funds.
The second exploit happened on August 6, 2024, when the Ronin Network Bridge was compromised, resulting in the loss of $12 million. This included $2 million in USDC and 4,000 ETH. The attack exploited a vulnerability introduced during a recent contract upgrade, which was taken advantage of by an MEV-bot.
As always, we strongly advise users to exercise caution and remain vigilant when managing their assets.
7. Closing words
What can be said with certainty is that we are becoming more accustomed to the volatility inherent in this emerging industry. Rather than viewing it as uncertainty, it could be seen as part of the natural patterns of a healthy economic cycle. Additionally, we are navigating through uncertain times globally, with the upcoming U.S. elections, ongoing conflicts around the world, and rising inflation affecting many countries.
However, one thing remains clear: the Web3 industry continues to build and innovate, regardless of external challenges. While this may seem like a down month, the progress made is significant, and the long-term potential remains immense.
Perseverance is what drives us forward, and it’s this resilience that will continue to shape the future of the Web3 space.
