DeFi Takes A Hit, As DappRadar Releases Q1, 2022 Crypto Report

Leading decentralized applications store DappRadar, has released its Dapp Industry Report for Q1 of 2022. According to the report, blockchain demand was substantially higher than the same period in 2021 (+396%), but marginally lower than Q4 of 2021 (-5.8). Similarly, dApps realized significant growth during the period under review. Overall, an average of 2.4 million unique active wallets interacted with dApps. Gaming dApps led the market utilization in the dApp segment,  accounting million 50.5% of daily active users, which is equivalent to about 1.2 million users. Nonetheless, the segment suffered a 5.8% decline in the quarter.

As the digital market proves to be resilient against adverse market fundamentals, two key factors have stood out. First, hacking is an existential threat to the blockchain ecosystem as a whole. Particularly, token bridges have emerged as vulnerable and proven weak links against hackers. A total of 41.19 billion was lost through hacking related to bridge vulnerabilities. Notably, two bridges suffered the greatest losses, accounting for more than 80% of the losses.  Ronin and the Wormhole Solana bridge lost $600 million and $300 million respectively.

The second threat to the market is the ongoing Russia-Ukraine war. Following Russia’s invasion of Ukraine, most investors have adopted a cautious approach to investment. This has permeated the blockchain market. Therefore this could continue destabilizing the market for as long as the war continues.

NFTs defiant as DeFi takes a hit

Meanwhile, NFTS defied sceptics to register growth. While there have been growing calls to watch out for a bubble market in the NFT segment, it still generated $12 billion.  According to DappRadar, the figure did not factor in sales on LooksRare, due to suspicious activities on the site. Notably, however, the unique NFTs market continues to grow at a faster rate despite the slowdown by the rest of the market.

The third major blockchain market segment, DeFi, took a big hit, sheding 8.4% from its December 2021 TVL level to register $214 billion. This is perhaps reflective of the downtrend experienced by cryptos and tokens since December 2021. Nonetheless, the sector seems to be reinventing itself, and many DeFi protocols have begun accepting NFTs. Also, despite the rest of the market taking a hit, the Terra protocol registered an impressive 68% growth in Q1 of  2022 to generate $23 billion in TVL, becoming the second-largest protocol after Ethereum.  Nonetheless, Ethereum is still by far the largest protocol.

About DappRadar

With more than 10,000 dApps across over 30 protocols, DappRadar is the world’s largest store for decentralized applications. It has an active monthly user base of more than 1 million. The platform provides a comprehensive analysis of blockchain utilization and gives useful consumer insights into  NFT valuations, DeFi market performance, GameFi and other Web3 and blockchain project and market performances.