Users adoption and the number of web3 developers rose amid the bear season aggravated by the macroeconomic situation and Terra’s debacle, DappRadar found.
DApp discovery and analysis platform DappRadar released a detailed report analyzing the state of the crypto market in May. It mainly covered three areas: DeFi, NFT activities, and crypto games, stating that the Terra debacle did not destroy the overall DeFi ecosystems. NFT trading volume was only down 6% from April if measured in token prices, and interest in blockchain games remained sturdy amid crypto selloffs.
According to DappRadar’s report, shared with CryptoPotato, DeFi was the most beaten-down sector in May. The industry had a total of $117 million in Total Locked Value (TLV) – 45% below what it had achieved as recorded by the end of April. Among all the DeFi protocols, Tron noticeably was the only network that recorded a positive number for TLV – an increase of 47% MoM – while the rest of the major projects all experienced declines.
Despite the seeming weakness exacerbated by Terra’s historic collapse, the report stated that the sector is “far from dead” because it has achieved an 11% YoY growth in terms of TLV. Moreover, dominant decentralized exchange Uniswap reached the landmark of $1 trillion transaction volume in the same month.
NFT transaction volume dropped 20% MoM – when measured in USD – but the number would have come down to 6% if viewed in the native tokens of the NFTs. It shows that the bear market did not fundamentally shake out people’s convictions in the sector, the report found.
It’s worth noting that Solana NFTs generated $335 million across all marketplaces, growing 13% from April, defying the overall market condition. Despite the plunged floor prices of blue-chipped projects like BAYC and MAYC, the NFT space did not lose momentum as new protocols continue to attract volume from investors.
In terms of marketplaces, OpenSea’s dominance declined along with the rising competition derived from Solana-based Magic Eden, Wax’s Atomic Hub, and more. Coinbase Marketplace was viewed as a “failed experiment” since it only generated $2.5M since launching on April.20th this year.
The report further noted that despite the recent contraction occurring in the NFT space, the rapidly growing sector has been in a consolidation stage since it peaked in January this year, and its engagement with non-crypto-native populations has changed the current crypto landscape.
The exposure that the blockchain industry receives from NFTs, puts today’s crypto market in an entirely different position from the conditions seen in the 2018 crypto winter. In those days the levels of engagement and enthusiasm around the industry were alarmingly low. While the mainstream media keeps calling for the NFT bubble to burst, the market conditions of the NFT space disagree. – reads the paper.
Compared to DeFi or even NFTs, blockchain games suffered the least, with the number of such transactions only down 5% from April. Meanwhile, the report quoted a16z’s $4.5 billion commitment as a boost to the Metaverse and related blockchain games.
The document attributed the latest move-to-earn trend – embedding a gamification element to physical activities – as a new incentive that onboards new players and sustains the sector’s growth.
Jay Zhuang is a journalist and artist with a background in digital art curation. He started writing about cryptocurrency in 2020 and began contributing to DAOs in 2021. He can be reached on Twitter.
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