Coin World reported:
In the second quarter of 2024, Web3 user engagement reached a historical high, with approximately 10 million daily unique active wallets (dUAW), representing a 40% increase from the first quarter.
According to a report from the blockchain analytics platform DappRadar on July 4th, this unprecedented growth spanned across various sectors of the decentralized application (DApp) industry, leading to an overall bullish trend.
Significant growth in social dApps and NFTs in the second quarter
The social sector saw the highest increase, with dUAW growing by 66%. This growth was driven by applications such as Fantasy.top and UXLINK. The user base in the blockchain gaming industry also increased, although its market share slightly declined.
The user activity on decentralized exchanges such as Uniswap and Raydium saw a significant increase. Due to the influx of meme coin traders, Uniswap’s dUAW rose by 80%, while Raydium’s rose by 134%.
The usage of the NFT market reached its highest level since the first quarter of 2023, with a transaction volume of over $4 billion from more than 14.9 million individual trades. The market share of Magic Eden grew from 17% to 22%, while Blur’s dominance decreased to 31%.
Despite the increasing number of users, the total value locked (TVL) in DeFi applications decreased by $7 billion. This represented a 4% decrease compared to the previous quarter. Tron and Arbitrum suffered significant losses in TVL, dropping by 17% and 9% respectively.
However, the Ethereum Layer 2 solutions Linea and Base saw an upward trend, with Linea’s TVL soaring by 420% and Base’s TVL increasing by 44%.
Meanwhile, DappRadar warned that the rapid growth of dUAW may not be sustainable. They attributed part of the growth to “airdrop farming,” where users engage in activities to earn airdropped tokens.
The surge was facilitated by the June airdrops from Blast and zkSync. The report emphasized the need for exceptional user experience, solid development roadmaps, and strong teams for sustainable growth.
Security remains a major concern
The report also emphasized that security is still a significant issue in the Web3 industry. In the second quarter of 2024, losses due to security vulnerabilities amounted to $430 million, representing a 5% increase from the previous quarter.
Ethereum and BNB Chain were most affected, each accounting for 28% of incidents, while Solana was involved in 8% of cases. The remaining incidents were distributed across various chains, including Polygon and Arbitrum.
While access control issues accounted for only 23% of incidents, they represented 75% of the total funds lost. Other types of incidents, including flash loan attacks and rug pulls, accounted for 13% of incidents but only 1% of total losses. On the other hand, phishing attacks accounted for 3% of incidents, resulting in economic losses of approximately 0.4% of the total losses.