Regulatory Challenges Don’t Halt 1.4% UAW Rise

DappRadar June Industry Report
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DappRadar June Industry Report

June 2023 stands as a testament to the tenacity and resilience of the dapp industry, proving itself to be an unyielding force amidst an unpredictable rollercoaster ride. From SEC lawsuits sending shockwaves across the crypto space to volatile market shifts, challenges were certainly no stranger to this month. However, despite these headwinds, the dapp industry has demonstrated a remarkable ability not just to withstand, but also thrive amidst adversity.

Key Takeaways 

  • Despite regulatory uncertainty, the dapp industry experienced a modest growth of 1.4% in June, averaging 1,994,805 daily unique active wallets (dUAW). Gaming continues to lead with a 36% activity share, closely followed by DeFi at 35%.
  • Even though the industry recorded increased adoption of DeFi services, the total value locked (TVL) in these Web3 financial platforms faced a slight decrease of 1.86%, settling at $77.68 billion.
  • The NFT sector recorded $888 million in trading volume from 4.24 million sales. Dropping floor prices due to airdrop incentivized activity on lending platform Blur, played a big role in this negative trend. 
  • Ethereum dominates 72% of NFT trading volume despite making up only 12% of sales, while Polygon stands out with 35% of NFT sales and 1.3 million traders.
  • In June, $80 million in crypto assets were lost due to hackers exploiting smart contracts and duping investors. 

Table of Contents 

  1. Dapp Industry Overview
  2. Stargate Finance retains top spot as most-used dapp
  3. DeFi TVL drops 1.86%, Ethereum holds 70% share
  4. NFT trading hits $888M volume, 4.2M sales
  5. Bored Ape Yacht Club Hits 20-month low
  6. Blur leads NFT market with $535M trading volume
  7. Gaming giants embrace Web3: a new era for blockchain gaming?
  8. $80 million lost due to exploits and hacks
  9. Conclusion

1.Dapp Industry Overview

June 2023 carried forward the momentum of the burgeoning dapp industry with a slight 1.4% increase in daily unique active wallets (dUAW), reaching a robust average of 1,994,805 dUAW. Despite the regulatory turmoil, sectors like gaming and decentralized finance (DeFi) championed the industry’s growth and stability, reaffirming their pivotal roles within the digital ecosystem.

Even though gaming experiences hit their lowest dominance point since July 2021, this sector continues to hold its ground as the primary driver of dapp activities. With 716,127 dUAW, equating to 36% of the total industry activity, the gaming sector saw a modest 1% growth from June.

DeFi’s growth however, outshone other sectors, registering a 14% upsurge and amassing 693,464 dUAW. This surge propelled DeFi’s share to 35% of the total dapp activity, signaling the sector’s rising prominence amidst growing retail user adoption and the hype surrounding anticipated airdrops from platforms like zkSync, Starknet, and LayerZero.

Notably, social dapps sustained their upward trajectory with a 12% increase, culminating in a user base of 263,039 dUAW. Contrarily, the NFT sector witnessed a significant downturn in June with a 44% dip, settling at 86,735 dUAW – the sector’s lowest since March 2021. This downturn resulted in a reduced market share of 4.35% for the NFT sector.

Top Blockchains by Unique Active Wallets in June 2023

A close look at blockchain performance reveals BNB Chain as the market leader, accommodating 545,024 dUAW. With 23% of the blockchain activity, PancakeSwap still sits on top of the BNB Chain ecosystem. WAX and Polygon, despite slight decreases in user activity, remained significant players with Alien Worlds and Stargate Finance dominating their respective blockchain ecosystems.

zkSync continued its ascend in the DeFi space, boasting a remarkable 52% increase in dUAW and securing fourth place in the industry. SyncSwap remained the leading dapp on zkSync, holding over 45% dominance.

Meanwhile, Ethereum and Arbitrum experienced a slowdown, with Ethereum witnessing a 50% drop in dUAW, largely attributed to the downturn in the NFT sector.

In the following section, we delve deeper into the top dapps by UAW in June 2023, offering a comprehensive perspective on the dynamic dapp industry.

2. Stargate Finance retains top spot as most-used dapp

In the constantly evolving realm of dapp industry, understanding which platforms are drawing the most engagement is key to discerning industry trends. For June 2023, we turn our spotlight towards the dapps that have successfully attracted the largest number of unique active wallets (UAW), with a special emphasis on the remarkable performance of Stargate Finance.

Top 10 Dapps by unique active wallets in 2023, stargate finance holds the first sport

Topping the list this month was Stargate Finance, outshining the competition with 2.43 million UAW, marking a 10.72% increase from the previous month. This remarkable rise from an emerging platform to surpass established giants like PancakeSwap reaffirms the dynamic and unpredictable nature of the dapp market.

Stargate Finance’s success coincides with a resurgence in DeFi services and anticipation surrounding airdrop opportunities from projects like zkSync, StarkNet, and LayerZero. It’s noteworthy that DeFi-based dapps now make up 60% of the top ten platforms, a significant shift from the gaming dapp domination observed a few months prior.

June also witnessed the upward trajectory of two social dapps, namely Galxe and CyberConnect. Galxe, a platform that empowers projects and incentivizes Web3 communities, registered a 4.58% increase in UAW, largely attributed to its innovative features. The platform’s unique Token Reward feature, introduced in February 2023, has been pivotal in overcoming challenges like low retention and difficulties in attracting early adopters. In June, this feature was upgraded to support six new EVM blockchains, which undoubtedly contributed to its increasing popularity.

On the other hand, CyberConnect recorded a massive 169% increase in UAW. The platform made headlines by partnering with a Azuki community meetup in Kyoto, an event coinciding with Japan Blockchain Week.

By exploring the patterns and trends in UAW, we can glean vital insights into the rapidly shifting dapp landscape and identify the key players shaping the future of this innovative industry.

3. DeFi TVL drops 1.86%, Ethereum holds 70% share

In the rapidly evolving world of cryptocurrency, the decentralized finance (DeFi) sector has garnered significant attention. However, despite the increased adoption and widespread discussions surrounding DeFi, its performance in June 2023 tells a unique story. 

DeFi total value locked in June, hits $77.68 billion

The sector recorded a slight decline, with the Total Value Locked (TVL) in DeFi falling by 1.86%, to settle at $77.68 billion. This unforeseen decline stands in sharp contrast to the previously expected growth trend within the DeFi arena. A significant contributing factor to this shift was the impact of SEC lawsuits on particular altcoins, notably BNB, ADA, and MATIC, which played a substantial role in steering this course.

Total Value Locked of the top Blockchains in June 2023

Ethereum, with its native token ETH as the second-largest cryptocurrency by market capitalization, continues to dominate the DeFi scene. This thriving ecosystem captured a significant 70% of the market share. Since Ethereum transitioned to a Proof-of-Stake network, anybody can stake 32 ETH to run a network node. Building on top idea, Lido has emerged as a platform for Staking-as-a-service, introducing a concept called ‘liquid staking’. Liquid staking allows stakers to still use their staked ETH tokens, but now at stETH. This principle has gathered lots of attention, and Lido dominates the market despite having some competitors. Even now that users are able to remove their staked ETH, Ethereum staking has experienced a noteworthy 20% increase in TVL. 

While Ethereum continues to dominate, the DeFi landscape isn’t solely its realm. Other blockchains have also garnered attention, although the limelight hasn’t been entirely positive. Unlike Ethereum’s upward trajectory, other DeFi blockchains witnessed a mild decline in their TVL in June.

However, it’s important to note that the future of DeFi looks promising, with an increasingly strong belief among crypto traders that DeFi will play a crucial role in the economy of the future. Despite the overall decline in TVL, various DeFi-centric cryptocurrencies saw an uptick of 24% to 34%, indicating ongoing innovation and investor confidence. This development comes at a time when global economic growth is being hampered by inflation and centralized exchanges grapple with regulatory limitations.

For a comprehensive understanding of the current trends and dynamics shaping the DeFi sector, dive into our in-depth analysis in this article. The piece explores the robust conviction in the future of DeFi, the innovation driving specific cryptocurrencies, and the interplay of economic and regulatory factors impacting the sector.

4. NFT trading hits $888M volume, 4.2M sales

As bitcoin made strides with a 17% surge in value, holding its ground firmly above the $30k mark, the typically reactive NFT market experienced a softer trading pulse.

The NFT market in May 2023 took a downward turn, failing to clear the $1 billion trading volume mark for the first time since December 2022. The trading volume receded significantly to $675 million, marking a steep 44% fall. In June, however, the NFT market exhibited signs of recovery with trading volumes reaching $888 million, yet not quite hitting the $1 billion milestone.

NFT trading volume and sales count in June 2023

Still, it’s important not to conflate trading volume with market enthusiasm. A decrease in trading volume doesn’t necessarily spell a downturn in market interest or activity. Indeed, while the total sales count for May languished at 3.6 million, representing a 23.6% decrease from the previous month, June painted a brighter picture with an increase to 4.2 million sales, a solid 16% uplift. This shift suggests a change in trading trends, not a dwindling interest in the NFT market.

This change in trader focus is corroborated by the rise of low-entry price NFTs and a subtle pivot towards alternative blockchains. Ethereum retains its leading position, accounting for 72% of total trading volume, but its representation in total sales count is a meager 12%. This disparity indicates that while high-value NFT trades continue to be centered around Ethereum, transaction volumes are spreading across other platforms.

Bitcoin Ordinals occupies the second spot in trading volume with a market share of nearly 10%, equivalent to a trading volume of $94.6 million. Its sales count, however, stands at just 4.35% with 301,879 transactions. Notably, Polygon takes the crown in NFT sales with a dominating 35% share and 1.3 million traders, buoyed by its scalability and affordable transactions. This makes Polygon an attractive platform for trading lower-priced NFTs, spotlighting an evolving NFT market landscape.

Top Polygon NFT collections in June 2023, DappRadar data

5. Bored Ape Yacht Club Hits 20-month low

The NFT industry is teeming with innovation and creativity, with numerous collections vying for attention. As we assess the NFT landscape for June 2023, we spotlight the top 10 collections by trading volume and the significant events that shaped their trajectory.

Top 10 NFT collections in June by trading volume, bored ape yacht club holds the first spot followed by azuki

The first spot is Yuga Labs’ famed Bored Ape Yacht Club collection. Despite commanding a significant trading volume, it witnessed a decline this month. This decline coincides with its launch on Blend, an emerging NFT lending protocol. This protocol incentivizes traders to bid on collections for accruing loyalty points. Yet, controversy has shrouded the Yuga Labs ecosystem this month with criticism aimed at ApeCoin DAO’s high remuneration practices. This tension has seemingly impacted the collection’s floor price, with Yuga Labs’ NFTs currently sitting at a 20-month low.

The second spot is claimed by Azuki, a name that remarkably features its ecosystem four times in our top 10 list. However, Azuki also navigated controversy this month with the launch of its new collection, Azuki Elementals. The Elementals garnered mixed reactions. The collection’s floor price took a sharp fall, and how it’s used as collateral for NFT lending on Blend, a total of 1,244 liquidations occurred within a 96-hour period, leading to a loss of $1.46 billion. Further details on this can be found in our comprehensive article.

Interestingly, Gods Unchained, the only gaming-related NFT collection on the list, has seen a 16.33% increase in trading volume over the past month. This comes off the back of its announcement to launch on Epic Games Store. With an aim to position itself alongside popular digital Trading Card Games, this launch will make Gods Unchained accessible to Epic Game Store’s vast 230 million-strong player base.

Lastly, The Captainz, part of the Memeland ecosystem, continues to hold its position in the top ranks. The reveal of the collection this month has sparked considerable interest and a bit of debate, but it added to its ongoing momentum.

In addition to examining the trading volume, it’s also beneficial to observe the floor price of these collections. Currently, apart from the two new Azuki collections that have seen a rise in floor price since their inception, the blue-chip collections are experiencing a significant impact, as illustrated in the visual above. The Bored Ape Yacht Club reached its lowest point in 20 months, and Azuki recorded the lowest floor price since its launch in January 2022.

Floor prices of the top NFT collections, especially from the bored ape yacht club and azuki, in June 2023

These trends and developments offer an intriguing snapshot of the evolving NFT marketplace, and they bear testament to the industry’s diverse and ever-changing character.

6. Blur leads NFT market with $535M trading volume

The narrative of the NFT industry in June 2023 remains as dynamic as ever. Continuing its dominance, Blur holds a commanding lead with 60.97% market share, translating to over $535 million in trading volume. This marks a 20% surge from the previous month, substantiating the pattern of large investors liquidating NFT collections to bid on them. The latest exhibit includes Machibigbrother’s high-volume offloading of 58 BAYC and 104 Beanz for a cumulative 134 ETH across two transactions.

Moreover, Blend is solidifying its position in the NFT lending market, claiming a whopping 95% share in June. Its lending volume continues to vie with its spot volume, crossing the coveted $1 billion threshold in inception-to-date lending volume.

NFT marketplace dominance by trading volume in June 2023, Blur holds the first sport

Despite a slip in its market dominance to its lowest point since January 2021, OpenSea maintains a bustling pool of traders, clocking in at 330,365 this month. This suggests that the platform has become a hub for smaller, lower-value transactions.

The third spot is occupied by UniSat, the pioneering open-source browser extension wallet for Bitcoin Ordinals & BRC-20. Following the integration of Bitcoin Ordinals, UniSat saw a remarkable surge in popularity, achieving a trading volume of $40 million and a 4.57% share of the total NFT marketplace in June.

A fascinating trend to note is the rise of direct peer-to-peer NFT sales, bypassing traditional marketplaces. This month saw $54 million in these trades, marking a significant 7.46% increase from the previous month. This development could herald a shift towards greater decentralization within the NFT industry.

Finally, it’s worth highlighting the promising performance of smaller NFT marketplaces like Jellyme on the MOOI Network, which recorded 8,570 UAW with 189,000 transactions. Additionally, JPG Store from Cardano also made waves, reaching $5.7 million in trading volume, a healthy 18.52% upswing from last month. For more information about these emerging NFT marketplaces, refer to our detailed article.

7. Gaming giants embrace Web3: a new era for blockchain gaming?

Even though the gaming sector hit its lowest dominance since July 2021, it remains the main force behind the dapp industry’s activities. With a robust 716,127 dUAW, which equates to 36% of the total industry activity, the sector witnessed a modest 1% growth from May 2023.

A significant development this month is the announced intent by established companies from the games industry, Ubisoft and SEGA, to launch their first Web3 games this year.  These gaming behemoths are reportedly investing heavily in blockchain gaming with original titles like Champions Tactics: Grimoria Chronicles and Battle of Three Kingdoms.

Renowned Japanese game maker SEGA aims to revitalize its gaming IP Sangokushi Taisen with Web3 elements, supported by blockchain gaming experts from Double Jump Tokyo. They will be using the Oasys blockchain network. This move followed SEGA’s earlier venture into blockchain when it released an NFT collection on Oasys.

Meanwhile, French games publisher Ubisoft might be best known for franchises like Just Dance, Far Cry and Assassin’s Creed, but has now announced its first Web3 game. With Champions Tactics they not only promise promise compelling gameplay but also sparks potential resurgence in the NFT space.

The advent of these major players arguably brings a much-needed shift in the blockchain gaming paradigm. Early blockchain gaming attempts often placed significant emphasis on in-game blockchain economies, occasionally overlooking compelling storylines, captivating gameplay or high-quality visuals. The entry of experienced gaming studios could usher in an era where gaming expertise complements blockchain innovation, offering richer gaming experiences for players.

Moreover, the metaverse’s profound connection to blockchain gaming cannot be understated. As detailed in our previous metaverse quarterly report, venture funds have invested more than $707 million into metaverse projects in 2023 alone, signaling the sector’s burgeoning potential.

Stay tuned as we dig deeper into the expansive realm of Web3 gaming in our upcoming June blockchain gaming report and the quarterly report due next week. Our aim is to provide a comprehensive perspective on how blockchain is revolutionizing the gaming landscape, the role of the metaverse, and the exciting new developments to watch out for.

8. $80 million lost due to exploits and hacks

The dapp world has witnessed its fair share of ups and downs when it comes to exploits, with June 2023 being no exception. Although the month recorded a decrease in the total value of losses from hacks and exploits compared to previous months, it still showcased vulnerabilities.

Based on the data from REKT Database, there were 38 recorded incidents in June 2023, leading to an aggregate loss of around $80 million. Even though this figure pales in comparison to prior months, where losses often soared beyond $100 million, it stands as a stark reminder of the constant threat of security breaches.

Exploits and hacks in June 2023

In terms of distribution, BNB Chain bore the brunt of these incidents, with 58% of the exploits focused on it. In second place, we see the Ethereum network, accounting for 29%. This distribution pattern highlights the necessity of shoring up security across all blockchain platforms.

Top 10 exploits in June 2023

The most notable among these incidents involved Atomic Wallet, a renowned multi-chain DeFi wallet. The wallet fell prey to an exploit, leading to the unfortunate loss of a staggering $35 million worth of diverse tokens. Tron-based USDT took a major hit, with on-chain analytics pinpointing it as the largest stolen stash of almost $7.9 million.

According to an official tweet from Atomic Wallet, the affected users constituted less than 1% of their monthly active users. Intriguingly, the losses were disproportionately high among the top five users, who collectively lost approximately $17 million. Some users claimed their crypto assets were stolen following a software update, while others reported losses despite not updating their software, as evidenced by messages on Atomic Wallet’s official Telegram channel. To aid in their ongoing investigations, Atomic Wallet requested victims to submit pertinent information via a Google Docs form.

However, thanks to the collaborative efforts of on-chain experts, $1.2 million worth of funds were successfully recovered from the hackers.

Furthermore, a noteworthy development in June 2023 was the resolution of the CFTC’s enforcement case against Ackerman, an alleged fraudulent scheme operator. The CFTC claimed that Ackerman managed to entice and misappropriate funds from over 150 individuals and entities, amassing a total of at least $33 million from August 2017 to December 2019.

Ackerman duped potential investors with false claims of generating profitable trades and monthly returns of around 15%. In reality, he was a losing trader, skillfully concealing the truth with counterfeit accounting statements, misleading newsletters, and manufactured screenshots.

When discounting the $33 million associated with Ackerman’s case, the total losses for the month round up to $47 million, thus emphasizing the need for more diligent security measures within the industry.

June 2023 served as yet another poignant reminder of the risks inherent in the evolving dapp space, prompting calls for increased vigilance and improved security protocols to mitigate future incidents.

9. Conclusion

It’s clear that the dynamic world of blockchain-based applications and the industries they influence – from gaming to finance to art – continues to experience significant transformations and developments.

The dapp industry remains a vibrant ecosystem, with an average of nearly two million daily unique active wallets (dUAW). In June, despite regulatory uncertainty, the industry experienced modest growth of 1.4%. Gaming continues to lead with a 36% activity share, closely followed by DeFi at 35%.

Although the total value locked (TVL) in DeFi platforms faced a slight decrease of 1.86%, settling at $77.68 billion, the sector continues to hold significant potential. Ethereum’s dominance in this space, particularly in liquid staking, underscores its central role in shaping the DeFi landscape. However, the emergence of other blockchains in this sector points to a future that could be marked by heightened competition and diversified offerings.

The NFT market retains its allure despite a recent downturn in trading volumes. In June, the sector witnessed a 44% dip in daily unique active wallets (dUAW), recording $888 million in trading volume from 4.24 million sales. Dropping floor prices due to airdrop incentivized activity on lending platform Blur played a significant role in this negative trend.

 Notably, Ethereum dominates 72% of NFT trading volume despite making up only 12% of sales, while Polygon stands out with 35% of NFT sales and 1.3 million traders. These shifts in market dynamics, along with the appetite for cheaper NFTs, indicate an evolving marketplace that is adapting to the needs and preferences of its user base.

The intersection of blockchain technology and the gaming industry is evident, with hefty investments from gaming industry titans like Ubisoft and SEGA. This convergence is creating an exciting paradigm where traditional entertainment models are being disrupted and reimagined through the lens of blockchain technology.

However, despite the progress, the prevalence of exploits and hacks in the blockchain sphere remains a concern. In June alone, $80 million in crypto assets were lost due to hackers exploiting smart contracts and duping investors. These incidents serve as a stark reminder of the urgent need for robust security measures and sophisticated protocols to ensure user safety and trust.

In conclusion, while blockchain-based applications and their respective industries continue to experience transformative growth, it is crucial to address regulatory uncertainty, security vulnerabilities, and market fluctuations. By doing so, we can foster an ecosystem that harnesses the full potential of blockchain technology and ensures the long-term success and adoption of these innovative applications.

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