Coin World News Report:
Author:
Dappradar
Translation: Felix, PANews
The dapp industry performed exceptionally well in the second quarter of 2024. Since the beginning of this year, it has witnessed a series of positive developments and is experiencing a bullish trend with no signs of slowing down. However, this bullish sentiment is reflected in the fundamental indicators and user engagement rather than token prices. This article focuses not on token prices but on analyzing the broader prospects and understanding user behavior and trends within the ecosystem.
Key points:
Compared to the previous quarter, the usage of the dapp industry has grown by 40%, with a daily unique active wallet (dUAW) reaching 10 million.
The social sector has performed well in Web3, with dUAW skyrocketing by 66% to reach 1.9 million.
DeFi’s total value locked (TVL) decreased by 4% compared to the previous quarter, reaching $168 billion.
Linea has shown remarkable performance in the DeFi sector, with a TVL of $1.1 billion, a growth of 420%.
NFT had its best quarter since the first quarter of 2023, with trading volume increasing from $14.9 million to $4 billion.
In terms of trading volume and market dominance, OpenSea ranks third but leads the NFT market in terms of trading volume with a 12% market share.
Although the market as a whole has performed positively, the total losses caused by vulnerabilities and hacker attacks have reached $430 million, a 5% increase from the previous quarter.
1. Dapp Usage Reaches an All-Time High
The second quarter of 2024 was an extraordinary quarter for dapps, with a record number of daily unique active wallets (UAW). Now, there are 10 million UAW connecting and interacting with dapps every day, a 40% increase compared to the previous quarter.
Every dapp category has experienced significant growth, driving the overall bullish trend. The social sector has shown the most significant growth, increasing by 66% since the last quarter, with nearly 2 million UAW on average daily. This surge is largely driven by the current excitement around Web3 participation, with popular dapps like fantasy.top and UXLINK attracting a lot of attention and usage.
The blockchain gaming sector continues to dominate dapps despite a slight decrease in its market share (2%) compared to the previous quarter, similar to DeFi. In contrast, NFT and the social sector have increased their market share, becoming the main trends in the second quarter of 2024.
Overall, the market sentiment this quarter is bullish, setting a positive tone for further exploration of specific blockchain verticals.
2. DeFi TVL Slightly Decreases to $168 Billion
In the second quarter of 2024, DeFi’s total value locked (TVL) experienced a decrease from $175 billion in the first quarter to $168 billion at the end of the second quarter.
Ethereum continues to dominate the DeFi sector, with a TVL of $120 billion in the second quarter of 2024, a 9% increase from the first quarter. Solana’s TVL decreased by 10% to $9.6 billion, mainly due to the better performance of meme coins in the previous quarter, which resulted in a larger TVL. However, the popularity of meme coins has declined.
Tron experienced a more drastic decline, with its TVL decreasing by 17% to $8 billion, mainly due to regulatory concerns. Similarly, Arbitrum’s TVL also decreased by 9% to $4 billion. Arbitrum is facing fierce competition from other Layer2 networks and alternative Layer1 solutions.
In contrast, Base has shown outstanding performance, with a 44% increase in TVL to $1.9 billion. The chain’s innovative approach, strong community support, and strategic partnerships have played a key role in its development. Linea has also shown amazing growth, with a 420% increase in TVL to $1 billion, driven by innovative DeFi applications, strategic alliances, and airdrop mining. Linea is one of the few L2s without a token.
As for the most commonly used DeFi dapps, Raydium and Uniswap V3 saw the largest increase in UAW. This surge is mainly due to their usage in meme coin trading, which is the main trend of this quarter, with most users actively trading meme coins.
3. NFT: Best Quarter Since Early 2023
The NFT market maintained a bullish trend in the second quarter of 2024. NFT trading volume reached $4 billion, a 3.7% increase, and the number of NFT transactions increased by 28% to 14.9 million.
In terms of the overall NFT market landscape, Blur continues to dominate with a 31% market share, although this ratio has decreased by 50% compared to the previous quarter. Magic Eden follows closely, achieving success with BTC Ordinals, increasing its market share from 17% to 22%. In terms of trading volume and market dominance, OpenSea ranks third but leads the NFT market in terms of trading volume with a 12% market share.
The top five NFT series in terms of trading volume remained largely unchanged from the previous quarter, except for Runestone and fantasy.top. These two NFT series have achieved incredible success and popularity in the second quarter of 2024.
4. Security Insights: Vulnerabilities and Hacks
Vulnerabilities and hacker attacks in the Web3 industry remain a significant concern. In the second quarter of 2024, losses caused by security vulnerabilities amounted to $430 million, a 5% increase from the previous quarter.
Ethereum and BNB Chain were the most affected, accounting for around 28% of total security incidents each. Solana was involved in about 8% of the incidents, while the remaining 36% occurred on other chains, including Polygon and Arbitrum.
Although access control issues accounted for only 23% of all incidents, they resulted in a staggering 75% of the total funds lost. The “Other” category accounted for 36% of the total incidents, causing approximately 15% of the total losses. Flash loan attacks and rug pull incidents accounted for about 13% each, with each incident causing approximately 1% of the total losses. Phishing accounted for only 3% of the incidents, causing approximately 0.4% of the total losses. This distribution highlights that while access control issues may be less frequent, their financial impact is much greater.
The top five hacker attacks and vulnerabilities:
DMM Bitcoin Hack: Japanese centralized cryptocurrency exchange DMM Bitcoin lost $305 million in a theft case on May 31.
Gala Games Incident: Hackers exploited an access control vulnerability in the GALA token contract, minted 5 billion GALA tokens, and sold 592 million tokens at a price of 21.8 million ETH, causing a 20% price drop.
Lykke Exchange Vulnerability: Swiss centralized cryptocurrency exchange Lykke suspended withdrawal operations after suffering a security vulnerability that resulted in losses of over $22 million.
Sonne Finance Vulnerability: Sonne Finance protocol on the OP chain fell victim to a flash loan attack, with the attacker launching multiple attacks, resulting in approximately $20 million in losses.
Holograph Hack: NFT protocol Holograph suffered a $14.4 million hacker attack as a former developer exploited a smart contract vulnerability to mint 1 billion HLG tokens.
It is certain that the Web3 industry must adopt robust security practices across different blockchain platforms. This includes addressing access control vulnerabilities, monitoring various threats, and educating users about security practices to reduce the risk of future incidents.
5. Conclusion
The bullish trend in the Web3 industry continues to thrive, with a significant increase in the number of independent active wallets and NFT trading volume. Innovations in DeFi and other sectors are also noteworthy. The rise of L2 solutions will undoubtedly continue, with more blockchains being launched to enhance scalability and reduce transaction costs.
As an integral part of the Web3 ecosystem, meme coins will continue to be a prominent trend, maintaining their significant influence and market share. SocialFi will also play an important role, providing alternative solutions to existing platforms like Facebook and Instagram. As users seek new social networking experiences in the decentralized world, SocialFi will become increasingly important.
The current trend of airdrop mining has led to a surge in UAW, but this growth may not be sustainable. To ensure long-term retention of users after airdrops, focus must be placed on providing a smooth user experience, robust roadmaps, and strong development teams.
Despite ongoing security challenges, the Web3 industry remains strong with continued enthusiasm and potential for further development.
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