Twitter X Rebranding – A Prelude to the Rise of Social Dapps?

Social dapps report of DappRadar, made on Twitter X rebranding and the rise of lens protocol and galxe
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Social Dapps Report by DappRadar

The recent rebranding of Twitter to ‘X’ serves as a stark reminder of the centralized control that traditional social media platforms maintain over content and user information. This obviously raises ongoing privacy concerns. However, the advent of Web3 technologies is signaling a paradigm shift towards a more decentralized, user-centric approach to online interactions. This shift is giving rise to a new and innovative sector within Web3, referred to as ‘Social’.

As we embrace the era of decentralized social dapps, we are witnessing a fundamental transformation of the digital landscape. This transformation exemplifies the overarching mission of Web3: to foster a more equitable, decentralized internet, redistributing power from a few authoritative entities to the broader network of users. The following report delves into this transformative journey, highlighting the growth and impact of social dapps in the Web3 ecosystem.

Key Takeaways 

  • In Q2 2023 social dapps captured 13% of the market (248,042 daily UAW).
  • Social dapps constitute 2% of total industry transactions, and showed resilience with a 7% growth in transaction count and a notable 72% increase in transaction volume.
  • Gaming blockchains like BNB Chain and Polygon fueling the rise of Social dapps, saw 22% and 20% increases in the number of wallets interacting with Social dapps  in Q2 2023.
  • Hooked stands out as the most popular Social dapp in the last 30 days with 322,500 UAW and 10.2 million transactions. 
  • Steem, uniquely designed for Social dapps, showed a 3% rise in unique active wallets and transactions in Q2 2023. Steemit accounts for a major portion of the activity and has a noteworthy past user, Binance’s CEO, Changpeng Zhao.

Table of Contents

  1. Social Dapps Industry Overview
  2. Market Landscape
    2.1 Spotlight on Top Social Dapps: Active Wallets, Transactions and Volume
    2.2 Blockchains Powering Social Dapps
  3. Specific Case studies
    3.1 Steem: Revolutionizing Social Media with On-Chain Rewards
    3.2 Lens Protocol: Crafting a Decentralized Social Infrastructure for Web3
    3.3 Galxe: Crafting a Collaborative Credential Data Network in Web3
  4. Conclusion

1. Social Dapps Industry Overview

In our exploration of the decentralized application (dapp) industry at DappRadar, we’ve strategically categorized dapps across various sectors. Everyone is familiar with DeFi, NFT, and blockchain gaming. However, an unexpected sector—Social dapps—has garnered significant traction since Q4 2022, and currently captures 13% of the market with 248,042 daily UAW in Q2 2023. 

These nascent platforms mirror the functionality of mainstream social media heavyweights like Facebook and Instagram but introduce a unique selling point—the integration of interactive gaming components enabled by blockchain technology. As a thrilling offshoot of blockchain gaming, this emerging sector effortlessly combines entertainment with social interactions.

The escalating traction of social dapps can be attributed to growing privacy concerns associated with conventional social media platforms in recent years. An increasing number of users seek a secure connection with peers that doesn’t compromise their personal data. This is where social dapps come in, offering a safer, private avenue for communication that is not under centralized control. Additionally, some social dapps tend to reward users with point or NFTs for their engagement on the platform.

Take for instance Diaspora, a decentralized social network providing users superior control over their data. On joining Diaspora, users set up a profile stored on their personal computer instead of a centralized server, thus enhancing security. Additionally, Diaspora facilitates connections with other users on separate servers, ensuring uninterrupted communication irrespective of the server in use.

Mastodon, another federated social network, allows cross-server connections for its users, ensuring seamless communication even on different platforms. Being open-source, Mastodon encourages anyone to host their own server, thereby promoting decentralization and security, contrasting with traditional social media platforms.

EtherMail is a Web 3.0 email solution that aims to deliver anonymous and encrypted wallet-to-wallet communication. It is built on the Ethereum blockchain and allows users to connect their digital wallets, facilitating the real-time management of their digital assets.

These are a mere few examples of social dapps that will be elaborated in this report, as we delve deeper into the data and discuss their implications for the future of social media.

2. Market Landscape

As we navigate the dapp industry landscape, it’s pivotal to focus on transactional data to derive meaningful insights. Over the last two quarters, there has been a shift in the total transaction count and volume. In Q1, the transaction count stood at 2.6 billion, with a transaction volume of $819 billion. By Q2, these figures had dropped to 2.3 billion and $489 billion respectively, marking a quarter-over-quarter change of -9.09% in transaction count and -40.21% in transaction volume.

To understand these dynamics further, we analyzed the transaction count and volume across various dapp sectors, placing a special focus on social dapps. In the transaction count, DeFi saw a 19% increase between Q1 and Q2, while games saw a decline of 12%. NFTs experienced a minor dip of 4%, while social dapps witnessed a growth of 7%.

In terms of transaction volume, DeFi transactions dipped by 40.83%, while games and NFTs saw decreases of 39% and 15%, respectively. Conversely, Social dapps showed significant growth, with transaction volume increasing by an impressive 72%.

In spite of accounting for just 2% of total transaction dominance, Social was the only sector to experience positive growth in Q2. This aligns with the trending interest in this sector, shedding light on its potential. The correlation between transaction number and volume is often influenced by the token’s price, which drives the transactions. A preliminary look suggests that social dapps tokens have remained resilient amid the turbulent Q2 2023, indicating no major decreases but rather showing signs of increase.

It’s clear from the data thus far that social dapps stand out as an exciting, growing area in the dapp industry landscape. Furthermore, these social dapps have also been used recently to generate engagement for users in search for L2 airdrops.

2.1 Spotlight on Top Social Dapps: Active Wallets, Transactions and Volume

As we shift our focus to the top social dapps of Q2 2023, a clear hierarchy emerges based on unique active wallets (UAW), transaction count, and volume.

The dapp Hooked leads the pack in monthly average UAW with 322,500 and transactions count of 10.2 million. However, transaction volume data for this dapp was not available. CyberConnect, a decentralized social protocol with identity sovereignty, follows closely with an average UAW of 155,327, recording 15.8 million transactions and a transaction volume of $209,322.

Comparing UAW growth from Q1 to Q2, Playbux surged by an incredible 16,309%, climbing from a Q1 monthly average UAW of 521 to its current figure. This spike in popularity is partly due to Playbux’s unique proposition as an ‘AI driven Web3 entertainment platform’ and its backing by Binance, one of the world’s leading cryptocurrency exchanges. The recent announcement of Playbux as one of the potential earning and airdrop projects in the BNB Chain ecosystem has further fueled its user base expansion.

Lens Protocol witnessed the second-highest UAW increase at 1220%, details of which will be examined later in the report. Meanwhile, CyberConnect grew its UAW by 44%. This growth has been partly due to its high-profile backing from investors like Animoca Brands and Sky9 Capital.

On the flip side, both Hooked and Galxe experienced minor UAW decreases from the previous quarter, with Hooked falling by 9% and Galxe by 5%. However, these dapps managed to maintain a substantial user base, particularly Hooked.

It’s worth noting that these top social dapps have performed impressively against their established counterparts. Several of these dapps have consistently ranked in the top 20 on the DappRadar Rankings in recent months, further confirming this upward trend. In the subsequent sections of this report, we’ll dive deeper into the performance and potential of these leading social dapps.

2.2 Blockchains Powering Social Dapps

When we turn our gaze to the blockchains supporting social dapps, a strong gaming connection is revealed. Four out of the top five blockchains — BNB Chain, Polygon, Hive, and Arbitrum — hosting social dapps are also renowned gaming infrastructure providers.

Here’s a quick breakdown of the unique active wallets (UAW) for social dapps across these blockchains in Q1 and Q2 2023:

BNB Chain leads with an impressive 22% quarter-on-quarter growth, boasting a monthly average of 612,462 UAW in Q2, which comprises 46% of total UAW in the chain. Following closely, Polygon reveals a steady growth of 20%, with 103,788 monthly average users in Q2, constituting 17% of its total UAW. Interestingly, Steem, the only blockchain in this list primarily designed for social dapps, demonstrates a modest growth of 3% in UAW.

These numbers reflect a broader trend in the blockchain industry, where gaming infrastructure is increasingly being utilized to host social dapps. This cross-pollination suggests that the robustness, scalability, and user-friendly interfaces popularized by gaming-centric blockchains can effectively support the unique demands of social dapps.

As a result, we can observe an emerging symbiosis between gaming and social media in the blockchain world, wherein gaming blockchains are becoming popular infrastructure for social dapps. This not only speaks volumes about the versatility and utility of gaming blockchains but also hints at the evolving landscape of social media in the decentralized world. 

This trend underscores the inherent overlap and seamless integration between gaming and social interaction in the digital space, an exciting avenue that we will explore further in the coming sections of this report.

3. Specific Case studies

As we navigate further into the realm of social dapps, it’s important to delve deeper into specific instances that have helped shape this exciting landscape. We’ve identified three case studies that highlight different aspects of this budding sector — Steem, Lens Protocol, and Galxe. Each one of these dapps represents unique innovations and contributions to the space, and their respective progress gives us a closer look at how social dapps are continuously pushing boundaries in terms of user experience, engagement, and utility.

3.1 Steem: Revolutionizing Social Media with On-Chain Rewards

Steem is a social blockchain that nurtures online communities by making immediate revenue streams possible for users. This innovative approach rewards users for sharing content, fostering a vibrant ecosystem where sharing is not just encouraged, but monetized.

According to the platform’s official data, Steem has paid out an impressive $59.5 million in rewards to users since June. The specific year for this data is not provided on their website, but the substantial payout figures speak volumes about the platform’s commitment to rewarding active participation.

In terms of Monthly Unique Active Wallets (UAW), Steem reported an increase of 3% quarter-over-quarter, reflecting a gradual but steady growth in user engagement. The same growth rate is echoed in the transactions count, which also saw a 3% increase.

However, when it comes to the transactions volume, a slight decline of 8% was observed. This decrease does not necessarily indicate a lack of user interest, but could be a result of fluctuating market conditions or changes in user spending behavior.

Steem hosts a total of 79 dapps, but only 32 of them have shown active usage or recorded at least one transaction during this period. The crown jewel in Steem’s roster is Steemit, a blockchain-based social media dapp that claims 83% of Steem’s activity. Steemit prides itself on being a “new kind of attention economy,” one that cultivates communities and rewards users for their contributions.

Interestingly, Changpeng Zhao (CZ), the CEO of Binance, was an active Steemit user six years ago.

For more detailed information about Steem’s on-chain data or to explore other dapps on the Steem blockchain, you can refer to our comprehensive rankings. The visual snapshots provided will offer a more in-depth look at Steem’s dynamic ecosystem.

3.2 Lens Protocol: Crafting a Decentralized Social Infrastructure for Web3

Lens Protocol, a brainchild of the creators of Aave lending protocol, is another significant player in the decentralized social network sector. This visionary platform is on a mission to build a decentralized social graph, supplying the crucial infrastructure for Web3 social media applications. By empowering users with a single, blockchain-secured identity that is functional across all digital platforms, Lens Protocol sets the stage for a unique Web3 user experience.

As our Q2 2023 data reveals, Lens Protocol has garnered impressive user engagement, with a monthly average of 110,169 unique active wallets and a total of 3.6 million transactions. Additionally, their foray into the NFT space has been successful, accounting for a trading volume of $1,573,636 from 8,205 sales within the quarter.

A significant milestone for the platform was the launch of Lens V2 on July 17th. This upgraded version unveiled exciting new features, including Open Actions, the Collective Value Share, and an enhanced Profile Manager. With Open namespaces, users are now able to separate their username from their profile, providing a whole new dimension of flexibility and control. For a comprehensive understanding of these updates, you may refer to our detailed educational guide on Lens Protocol and the recent enhancements.

Additionally, the namespaces or blockchain domains are interconnected within the social dapps. These name services allow users to identify a wallet through a regular word instead of a complex string of letters and numbers. On every blockchain there are services that allow people to buy user names, nurturing a system of online identities and a market for trading these popular assets.

Lens Protocol is steadfast in its commitment to pioneer a truly social internet – an arena where users maintain absolute ownership, control, and portability of their online engagements. With V2, Lens Protocol takes another decisive step towards this ambitious goal by enhancing its composability and facilitating both individual and collective monetization opportunities. The advent of Lens V2 indicates an exciting phase of growth for Lens Protocol and its users, signaling a promising future for decentralized social media platforms.

3.3 Galxe: Crafting a Collaborative Credential Data Network in Web3

Galxe is a unique proposition in the realm of social dapps, providing an open and collaborative credential data network for all developers in the Web3 space. Galxe empowers users to curate digital credentials and make significant contributions to the data network. Simultaneously, brands and projects can capitalize on Galxe’s permissionless NFT infrastructure to gamify their loyalty systems, conduct targeted marketing campaigns, and boost user acquisition. One must sign in with their wallet to be a user, and claiming a reward necessitates a transaction. For a more comprehensive understanding of Galxe, we invite you to read our detailed educational guide.

Galxe has demonstrated strong user engagement in Q2 2023, boasting a monthly average of 110,780 Unique Active Wallets, generating a total of 12.5 million transactions, and accruing a volume of $1.3 million. Their foothold in the NFT market is also commendable, with a trading volume of $558,056 within the quarter.

In its continuous endeavor to enhance user experience, Galxe introduced the Space Tier Program this quarter. This Loyalty Points Program, designed to empower Projects and incentivize their Web3 communities, enables Projects to level up their Space on Galxe by completing tasks and earning points, consequently unlocking a variety of rewards and benefits. To gain more insight into this exciting update, you can explore their official blog.

Galxe’s infrastructure contributions are indispensable to the ongoing development and maturation of the Web3 ecosystem. Currently, Web3 is still nascent, and user data remains highly fragmented. This fragmentation extends to products that do not employ decentralized technologies directly, such as data service providers like CoinGecko and media outlets like CoinDesk, and also encompasses the vast amount of off-chain data from platforms like Twitter, Steam, and Discord.

Galxe aims to address these challenges by facilitating credential curation through multiple data sources, intending to help teams better serve their users with this data. 

4. Conclusion

The exploration of social dapps in the Web3 ecosystem reveals a digital landscape that is not just expanding but transforming the ways we interact online. Drawing from the data presented in this report, we see this transformation reflected in user engagement and the adoption of new technology like NFTs.

In terms of user engagement, the rise in Unique Active Wallets (UAW) in dapps such as Playbux and Lens Protocol demonstrates a growing interest in decentralized social media platforms. Playbux’s exponential 16,309% increase in UAWs in Q2 2023 compared to Q1, and the strong showing from Lens Protocol, underline the escalating traction of these platforms.

Meanwhile, blockchains traditionally associated with gaming, like the BNB Chain and Polygon, are seeing increased UAWs related to social dapps, accounting for 46% and 17% of their total UAWs respectively. This points to a trend of cross-utility in blockchains, with gaming and social domains becoming increasingly intertwined.

The adoption and integration of NFTs into social dapps signals a significant trend in how digital assets are utilized and valued within the social media context. Lens Protocol’s $1.5 million in NFT trading volume and 8,205 sales for Q2 2023 exemplifies this, offering a glimpse into the future of digital content ownership and exchange.

As we move further into 2023, we anticipate these trends to not only continue but also to reshape our understanding of social interaction, online value, and digital identity in profound ways. Blockchain technology not only allows for ownership, but also enables users to build a reputation.

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