Original source: DappRadar

Original source: DappRadar

The January 2022 Dapp Industry Report shows that despite the crash in the crypto market, the blockchain is still active. Gaming and NFT collections are once again playing a big role in key metrics, while TVL in DeFi has seen a sizable drop.

Although the dapp industry has taken a big step in 2021, the crypto market is in a bear market due to a series of macroeconomic events. Major cryptocurrencies, including bitcoin and ethereum, are down 50 percent from their all-time highs in November, bringing fear and uncertainty to the market.

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important points

important points

Despite the crypto market crash, an average of 2.47 million UAWs are connected to blockchain dapps per day, down just 2% from December’s figure.

Excluding LooksRare’s $10.7 billion in sales, the NFT space traded at $5.3 billion; nearly 90% of all transactions took place in OpenSea.

Despite a 50% drop in the price of ETH over the same period, the bottom-line market capitalization of the top 100 NFT collections is estimated at $14.8 billion, down only 15% from November.

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Table of contents

Table of contents

2.47 million unique active wallets per day

LooksRare Pushes NFT Transaction Volume to $16 Billion

Bull Run in NFT Market Despite Crypto Crash

New rankings for TVL competition

Summarize

Summarize

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2.47 million unique active wallets per day

Despite the negative trends in the cryptocurrency market, usage has remained largely consistent across the industry. In January, an average of 2.47 million unique daily active wallets (UAW) were connected to blockchain dapps, down 2% from 2.53 million in Q4 2021; of course, it’s too early to worry.

For the first time since June 2021, the industry saw a decline in the number of dapp-connected wallets, which coincides with a bearish trend in the crypto market. This time, however, the decline was less severe. In contrast, in June 2021, the number of UAWs has decreased by 23% following the May crash of cryptocurrencies. This time around, the market appears to be more forgiving, although the price drop is more severe.

Much of this support comes from blockchain gaming, as the category increases its usage dominance across the industry. Gaming dapps accounted for 52% of dapp usage in January, up from 49% at the end of 2021.

UAW connected to NFTs grew by 2%, averaging over 185,000 UAW per day in January. On the other hand, DeFi dapps seem to be more sensitive to the crypto market. Usage in this category is down 3%, with 825,000 UAWs connected to DeFi dapps per day last month. DeFi user dominance has dropped from 36% late last year to 33% at the time of writing.

On the other hand, the situation of BSC declined sharply. The number of unique active wallets for the Binance brand has dropped by 20% compared to December last year. The cryptocurrency crash had a more pronounced impact here, as blockchain relies heavily on DeFi dapps. It will be interesting to watch how BSC-native dapps respond to this setback.

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LooksRare drives NFTs to record $16 billion a month

Last year, the NFT market exploded, generating $25.5 billion in transaction value, an increase of 18,400% over the previous four years combined. The first 31 days of the year confirm that NFTs are gaining momentum.

The NFT marketplace saw the successful launch of the latest Ethereum marketplace, LooksRare. LooksRare relies on a community-driven approach that rewards users for being active on the platform, challenging OpenSea's market dominance.

Since its launch on January 10, LooksRare has accumulated more than $10.7 billion in transactions. That’s more than double the rest of the entire NFT market combined.

LooksRare incentivizes users to trade by rewarding them with 100% of the 2% transaction fee charged by the market in eligible sets (with at least 1000 ETH of historical transaction volume). The collected fees are then allocated to users who pledge market governance tokens LOOKS to obtain the additional APY income obtained by staking tokens. This model of token economics has resulted in an active surge in the market.

Collectibles with 0% transaction fees like Meebits, Loot, Terraforms, etc. are aimed at this type of activity. By analyzing more than 36,000 transactions on the LooksRare website in January, we found that more than 4,600 transactions involved Meebits, with an average price of 366.14 ETH. This is a significant difference compared to Meebits transactions outside the LooksRare marketplace, where the average sale price is 4.65 ETH.

There is no doubt that looking only at transaction volume shows that LooksRare has far outperformed OpenSea and other peer markets. However, an in-depth analysis of other on-chain metrics shows that this is not the case.

While a community-focused approach may be beneficial to the market as a whole, we need to clearly recognize the current situation and recognize that a large percentage of transaction volume in the market (estimated to be around 90%) is programmatic. This amount may increase as the dapp announces that all collections are now eligible to reward stakers. On the other hand, NFT projects like Loot have started to deal with manual transactions, charging a 2% fee.

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Bull Run in NFT Market Despite Crypto Crash

Although, LooksRare's manual trading slightly overshadowed the impressive performance of NFTs at the beginning of the year. However, even without considering the impact of LooksRare, the turnover of the NFT market exceeded $5 billion for the first time since August 2021. Notably, sales in January reached nearly $5.3 billion despite low ETH prices.

Meanwhile, OpenSea had its best month yet. In January, OpenSea accounted for almost 90% of NFT trading volume, excluding LooksRare. The marketplace became the most used Ethereum dapp with $4.5 billion in sales, a record for the platform. Additionally, it has seen innovation record unique users and sales.

Contrary to usage trends in other categories, interest in NFTs is skyrocketing (see first chart). It appears that the NFT market is currently experiencing a bull run. An important trend to consider is that NFTs are gradually becoming a new asset class.

As noted in our latest research in partnership with The Defiant, certain NFTs are increasing in value despite bearish trends in cryptocurrencies. Series like BAYC, MAYC, Doodles, World of Women, etc. have not only increased in value in terms of ETH, but also in real terms in USD, even though ETH has grown by 50% since November.

Along the same lines, the bottom-line market capitalization of the top 100 NFT collectibles was estimated at $14.8 billion in January of this year. That was down 15 percent from $17.2 billion in November last year. While ETH took a 50% hit, the value of the top 100 most traded collectibles was only affected by 15%, suggesting that the category has withstood the plunge in the value of cryptocurrencies.

Likewise, Twitter enabled its first web3 feature, allowing verified avatar NFTs, paving the way for other platforms like Instagram or Tik-Tok. In addition, well-known brands such as Adidas and Nike also joined the field last year. This month, retail giant Walmart filed for several trademarks it intends to use as NFTs in the metaverse.

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New rankings for TVL competition

Amid the cryptocurrency crash, DeFi finds itself in a challenging situation and gets lost in the hype surrounding NFTs. At the time of writing, the industry has a TVL of $178 billion, down 23% from the value observed at the end of December. Still, the decline in the industry’s TVL was less than the 50% drop in the price of the underlying cryptocurrency.

On a positive note, the DeFi space is once again showing maturity and progress. The multi-chain paradigm is still on full display and remains a key aspect of the performance of certain DeFi dapps. Also, stablecoins are still solid. The programmatic design of these assets proves that stablecoins can withstand the high volatility observed in the market.

In terms of TVL, Ethereum remains dominant, with 65% of the industry metric, although it is down 2% from its 67% dominance at the end of last year. At the time of writing, Ethereum holds a TVL of $113 billion, down 25% from December.

In fact, the biggest winner of TVL is Fantom. The highly scalable layer-1 solution has nearly doubled its TVL over the past 30 days, surpassing $9 billion in January alone. The dapp leveraged the multi-chain model and the right incentive plan to push the network to the fourth place in the TVL ranking.

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The game has absorbed 52% of blockchain users

In the news about NFTs and cryptocurrencies, the gaming category has seen positive signs. As mentioned earlier, the gaming category accounted for 52% of dapps connected to standalone wallets. A very important reason is that top game dapps have achieved high retention rates, which is one of the most important indicators for games. According to on-chain metrics for January, the top blockchain-based gaming dapps have managed to retain their player bases.

Of the top 5 most played games from the end of 2021, only Alien Worlds failed to increase its UAW numbers. Splinterlands remains the most played dapp game in the industry (based on on-chain activity). In January, the game attracted over 305,000 UAWs, a 4.5% increase over the number of connected wallets in 2021.

The GameFi dapp Farmers World, hosted on Wax, became the third most popular game in the industry, attracting an average of more than 111,000 UAW users per day. Axie Infinity and Upland are among the top 5 most popular blockchain games.

The impact gaming has had is evident in the Polygon network. As mentioned earlier, sidechain usage has increased by 78%, with rising usage of blockchain games being the main reason for its growth. Leading the way in this regard is Sunflower Farmers, an earn-by-play dapp that attracted nearly 480,000 UAW users in the last month. Sunflower Farmers became the most popular game on the web with over $2.4 million in transactions.

The current situation of Polygon reflects the promotion of blockchain games to the entire blockchain. Established products like Splinterlands, Axie Infinity or Wax can sustain their network's user base by successfully attracting gamers. At the same time, the emergence of new products such as Polygon, Harmony, and Immutable demonstrates the promise of scalable solutions.

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The long-awaited RON token is officially launched

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in conclusion

in conclusion

Despite the crypto market crash, the dapp industry is showing clear signs of maturity and evolution. Starting from NFT, NFT has gradually become a new asset class. An asset that resists market crashes and even increases its value.

LooksRare is worthy of attention as a comprehensive NFT trading platform, although the high manual trading of its platform is not ideal for this field. Secondly, OpenSea's data records in terms of transaction users, sales and transaction volume also confirm the bullish trend of NFT.

Despite the adversity of the bear market, DeFi is flashing positive signs. The performance of stablecoins across different protocols provides trust to millions of DeFi users, as the most relevant users are able to maintain a 1:1 USD peg despite times of high volatility. In addition, the integrity and competitiveness of the DeFi industry has prompted dapps to constantly find better ways to attract users.