The blockchain industry, specifically decentralized apps (Dapps), has continued to grow rapidly with 1.54 million daily Unique active wallets (UAW) within July–September 2021 (quarter 3), according to The Dapp Industry Report for quarter 3. This UAW growth represents a 25% growth quarter-over-quarter and 509% growth year-over-year in the fast-growing Dapp world.
Three major segments in the Dapp world are driving this growth:
- Play-to-earn dapps which more and more gamers keep playing and earning from;
- Non Fungible Token (NFT) dapps where creators and lovers of unique continue to embrace; and
- DeFi dapps, where lending, staking, and other types of financial solutions are getting more interesting and rewarding.
Play-to-earn games lead adoption while catching fun and making money along the way.
Play-to-earn games in the blockchain industry essentially offer users the opportunity to earn crypto from playing games. This is why it has continued to attract gamers mostly. Spanning several blockchains, gamers in their millions have been increasingly adopting play-to-earn dapps.
Of the 1.54 million UAWs, play-to-earn alone attracted 754,000 daily UAW on average during the quarter under review. This is 140% bigger than quarter two. According to the DappRadar report, BSC, Hive, and WAX are some of the networks that have benefited from the growing adoption of play-to-earn dapps.
It is expected that UAW for play-to-earn dapps will continue to grow. Being inherently self-incentivizing, play-to-earn platforms provide an amazing opportunity especially for newbies to join the blockchain industry. Consequently, this game sector will further contribute to the current global crypto adoption.
Play-to-earn games include Axie Infinity, CryptoBlades, Plant vs. Undead, Dvision Network, Farmers World, Forest Night, Metalands, and Pet Games.
Total play-to-earn market capitalization is currently up to $13.6billion. Axie Infinity (ATX), the number one play-to-earn token by market capitalization, is currently $7.57 billion. This represents over 50% of the play-to-earn blockchain market. Defi protocols[efn_note] (Credit: HiBoox.com) [/efn_note]
NFTs continue to attract interest in its own distinguishable and unique way.
Blockchain-issued digital items, NFTs’ greatest value is that they are distinguishable from one another by a unique number.
Though there has been a general craze for or interest in NFTs particularly in 2021, usage dropped in quarter three of the year compared to usage in the previous quarter. UAW in the NFT world totaled 102,000. For the Top 100 Ethereum collections + NBA Top Shot, market capitalization is estimated at $14.19 billion. A record-breaking $5.2 billion trading volume was transacted in August alone.
But when compared to quarter two, UAWs registered in NFT space dropped by 2%. Though only 2%, could this drop be an indication that the level of adoption is currently moving from hype to reality? Of course this is not to suggest that NFTs are all hype. The drop may just mean that as both creators and adopters engage NFTs, they get to understand and appreciate its use cases better. This experience is expected to impact usage over time. It would be interesting to see the numbers at the end of quarter four. If we were to project this, a further slight decrease is expected, especially as play-to-earn dapps have become the major attraction in the blockchain space.
But while UAW dropped by 2%, trading volume in the NFT space increased by 704% compared with the second quarter, reaching $10.67 billion.
Also, the total NFT market capitalization is $36.8 billion. Of this market capitalization, Axie Infinity (ATX), Theta (USDT), and Tezos (XTZ) top the list with a combined market capitalization of up to $21 billion. They are followed by Chiliz (CHZ), Decentraland (MANA), and Enjincoin (ENJ).
Whether NFTs are treated as a marketplace for creators, buyers, and collectors; a playground for the mega-rich; a fun spot for the creative; a money machine for the crypto trader; or another ingenious invention for the techy, NFTs and their use cases will continue to evolve.
DeFi keeps defying all odds, contributing significantly to blockchain-industry growth.
According to The Dapp Industry Report, the total value locked (TVL) in DeFi is around $178.12 billion. This represents a quarter-over-quarter incrase of 53.45%. Also of this $178.12, around 92.37% ($166.38 billion) is locked in 6 blockchains. From the end of quarter two, TVL in the DeFi grew by 104%, peaking at $195 billion on September 6.
Holding around $125.58 billion in TVL, Ethereum leads the blockchains in terms of TVL. Ethereum currently accounts for around 69.72% of the industry’s DeFi’s metric. It is interesting to note that against the background of new blockchains, multichains, and what are supposed to be ‘Ethereum-killer’ blockchains, TVL in Ethereum in the quarter under review climbed up by 42.57% when compared with quarter two.
Coming second to Ethereum in TVL in DeFi is Binance Smart Chain (BSC). BSC has a TVL of $17.78 billion. This represents 9.98% growth from quarter two. Not surprisingly, the biggest DeFi dapp driving the increase in TVL in BSC is PancakeSwap, the blockchain industry’s second most used dapp after Axie Infinity.
And coming third in quarter 3 is Solana. Self-proclaimed the fastest network in the industry, Solana had the highest growth in TVL at 1,300% compared to quarter two. This took TVL in Solana dapps to around $8.28. The fact that only two dapps out of the total dapps on Solana are multichains suggests that Solona is one strong DeFi powerhouse in the blockchain industry.
Other two notable blockchains pushing the numbers for TVL in DeFi are Terra and Avalanche. Terra, the host of Terra USD (UST)—the DeFi industry’s most traded stablecoin—reached $8.09 billion in TVL. This is a 137% increase from quarter two. Lastly, Avalanche hit $3.62 billion in TVL across its DeFi dapps. The fastest-growing dapp on Avalanche is Trader Joe, a one-stop decentralized trading platform, exchange, farming, and staking platform, with lending underway.
From quarter two, UAW connecting to DeFi dapps dropped by 11%.
What could this crunch mean for the crypto asset buyer?
First, the blockchain industry is getting diverse. With this diversity comes options. Options mean choices. And where there are choices, the window of opportunities are not only open but also widely open—as well as widly so. Second, the blockchain industry is getting more competitive. With this competition, relatively unknown crypto assets or crypto assets with relatively cheaper prices may see their values appreciating over a period of time as adoption improves.
Therefore away from the relative storm centralized finance (CeFI) is generally facing in the space currently, dapps provide the gateway to what may arguably become a robust and sustainable segment of the crypto market. While CeFi continues to grow, DeFi would particularly benefit from the increasing UAW on Dapps. Thia, we believe, will gradually result in a faster growth for DeFi.
That said, the play-to-earn game industry, the NFT industry, and the DeFi industry all provide the crypto asset buyer with the opportunity to diversify his or her portfolio. But before taking any decision on one or more DeFi projects out there, ensure that you have done your research. Also get proper financial advice. Always.