DApp2024 Q2 Report: Usage increased by 40%, with outstanding performance in the social field

Original title: State of the Dapp Industry Q2 2024

Original author: Sara Gherghelas, Dappradar

Original translation: Felix, PANews

The DApp industry has performed very well in the second quarter of 2024. Since the beginning of the 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 fundamental indicators and user engagement, rather than token prices. Because Bitcoin has fallen by 12% since the end of the first quarter of 2024. The focus of this article is not on token prices, but on analyzing the broader outlook and understanding user behavior and trends within the ecosystem.

Key Points:

· The DApp industry saw 40% growth in usage compared to the previous quarter, with 10 million daily unique active wallets (dUAW)

· The social sector performed well in Web3, with dUAW surging 66% to 1.9 million

· DeFi’s TVL fell 4% from the previous quarter to $168 billion

· Linea shines in the DeFi space, with TVL reaching $1.1 billion, up 420%

· NFTs had their best quarter since Q1 2023, with trading volume increasing from $14.9 million to $4 billion

· OpenSea ranks third in terms of trading volume and dominance, but leads the NFT market in terms of trading volume with a 12% market share.

· While the market performed positively overall, losses from vulnerabilities and hacks totaled $430 million, up 5% from the previous quarter.

1. Dapp usage hits all-time highs

Q2 2024 was an extraordinary quarter for DApps, with the number of unique active wallets (UAWs) reaching an all-time high. There are now 10 million UAWs connecting and interacting with DApps every day, up 40% from the previous quarter.

Each track of DApps experienced significant growth, which in turn drove the overall bullishness. The social sector saw the most significant growth, up 66% since last quarter, with an average of nearly 2 million UAW per day. This surge is largely driven by the current excitement about Web3 participation, with popular DApps such as fantasy.top, UXLINK, etc. attracting a lot of attention and usage.

Blockchain games continue to dominate DApps, although their share has dropped slightly from the previous quarter (2%), similar to DeFi. In contrast, NFT and social sectors have increased their market share and become the main trends in the second quarter of 2024.

Overall, the market sentiment this quarter is bullish, setting a positive tone for subsequent in-depth exploration of specific blockchain verticals.

2. DeFi's TVL fell slightly to $168 million

In the second quarter of 2024, DeFi's TVL fell from $175 billion in the first quarter to $168 billion at the end of the second quarter.

Ethereum continues to dominate the DeFi space, with a TVL of $120 billion in the second quarter of 2024, up 9% from the first quarter. Solana's TVL fell 10% to $9.6 billion, mainly because meme coins performed much better last quarter than this quarter and made their TVL larger. But the popularity of meme coins has declined today.

Tron experienced a more dramatic decline, with its TVL falling by 17% to $8 billion. This was mainly due to regulatory concerns. Similarly, Arbitrum's TVL also fell by 9% to $4 billion. Arbitrum is facing fierce competition from other Layer2 networks and alternative Layer1 solutions.

In contrast, Base stood out, with TVL growing by 44% to $1.9 billion. The chain's innovative approach, strong community support, and strategic partnerships have played a key role in its development. Linea also showed impressive growth, with its TVL soaring 420% to $1 billion, driven by a surge in user adoption driven by innovative DeFi applications, strategic alliances, and airdrop mining. Linea is one of the few L2s without a token.

As for the most used DeFi dapps, Raydium and Uniswap V3 saw the largest increase in UAW. This surge was mainly due to its use in memecoin trading. This was the main trend this quarter, with most users actively trading memecoins.

3. NFT: Best quarter since the beginning of 2023

The NFT market maintained its bullish trend in the second quarter of 2024. NFT trading volume reached $4 billion, up 3.7%; the number of NFT transactions increased by 28% to 14.9 million.

NFT Market Landscape

Looking at the overall NFT market, Blur continues to dominate with a 31% market share, although this ratio is down 50% from the previous quarter. Magic Eden follows closely behind with the success of BTC Ordinals, and its dominance has increased from 17% to 22%. OpenSea ranks third in terms of trading volume and dominance, but has become the leading NFT market in terms of trading volume with a market share of 12%.

Most Traded NFT Series

The top five NFT series in terms of trading volume this quarter remained largely unchanged from the previous quarter, with the exception of Runestone and fantasy.top. Both NFT series have seen incredible success and popularity in Q2 2024.

4. Security Insights: Vulnerabilities and Hacks

Vulnerabilities and hacks in the Web3 industry continue to be a concern. Losses due to security vulnerabilities in Q2 2024 reached $430 million, up 5% from the previous quarter.

Ethereum and BNB Chain were the most affected, each accounting for about 28% of total security incidents. Solana was involved in about 8% of the incidents, and the remaining 36% occurred on other chains, including Polygon and Arbitrum.

Although access control issues only accounted for 23% of all incidents, they led to up to 75% of the funds lost. The "other" category accounted for 36% of the total number of incidents and caused losses accounting for about 15% of the total losses. Flash loan attacks and loan fraud incidents each accounted for about 13%, and each incident caused losses accounting for about 1% of the total losses. Phishing accounted for only 3% of the incidents and caused losses accounting for about 0.4% of the total losses. This distribution highlights that although access control issues are less frequent, they are much more financially destructive.

Top 5 hacks and vulnerabilities

DMM Bitcoin hack: Japanese centralized crypto exchange DMM Bitcoin lost $305 million in the theft on May 31.

Gala Games incident: Hackers minted 5 billion GALA tokens and sold 592 million for $21.8 million in ETH, causing the price to fall 20%.

Lykke exchange vulnerability: Swiss centralized crypto exchange Lykke suspended withdrawals after losing more than $22 million in a security breach.

Sonne Finance vulnerability: The Sonne Finance protocol on the OP chain was attacked by a hacker flash loan. The attacker attacked in multiple times, causing a total loss of about $20 million.

Holograph hack: The NFT protocol Holograph suffered a $14.4 million hack because a former developer minted 1 billion HLG tokens by exploiting a smart contract vulnerability.

It is safe to say that the Web3 industry must adopt strong security practices on different blockchain platforms. This includes addressing access control vulnerabilities, monitoring various threats, and educating users on security practices to reduce the risk of future accidents.

5. Conclusion

The bullish trend of the Web3 industry continues to flourish, with significant growth in the number of independent active wallets and NFT transaction volume, and innovations in DeFi and other fields are also eye-catching. The rise of L2 solutions will undoubtedly continue, with more and more blockchains being launched to enhance scalability and reduce transaction costs.

As an important part of the Web3 ecosystem, memecoins will continue to be a prominent trend, maintaining their significant influence and market share. SocialFi will also play an important role in providing alternatives to existing platforms such as Facebook and Instagram, and will become increasingly important as users seek new social networking experiences in a decentralized world.

The current trend of airdrop mining has led to a surge in UAWs, but this growth may not be sustainable. In order to ensure long-term retention of users after the airdrop, it is necessary to focus on providing a silky user experience, a robust roadmap, and a strong development team.

Despite ongoing security challenges, momentum in the Web3 industry remains strong, driven by continued enthusiasm and potential for further development.

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