In the second quarter of 2024, Web3 user engagement soared to unprecedented levels, with daily unique active wallets (dUAW) reaching approximately 10 million, a 40% increase from the first quarter.
This remarkable growth was highlighted in a July 4 report by blockchain analytics platform DappRadar, which noted a bullish trend across various sectors of the decentralized application (DApp) industry.
The social sector experienced the most significant increase, with dUAW rising by 66%, driven by applications like Fantasy.top and UXLINK. Although the blockchain gaming sector also saw a rise in users, its market share slightly declined.
Decentralized exchanges (DEXs) such as Uniswap and Raydium saw substantial increases in user activity, with Uniswap’s dUAW up by 80% and Raydium’s by 134%, fueled by an influx of meme coin traders.
NFT marketplaces reached their highest usage since Q1 2023, recording $4 billion in trading volume across over 14.9 million individual trades. Magic Eden’s market share increased from 17% to 22%, while Blur’s dominance fell to 31%.
Nonetheless, despite the rise in user numbers, the total value of crypto locked in DeFi applications (TVL) fell by $7 billion, a 4% decline from the previous quarter. Tron and Arbitrum experienced significant losses in TVL, dropping by 17% and 9%, respectively. Conversely, Ethereum layer-2 solutions Linea and Base saw substantial gains, with Linea’s TVL surging by 420% and Base’s by 44%.
DappRadar cautioned that the dramatic growth in dUAW might not be sustainable. The report attributed part of the increase to “airdrop farming,” where users engage in activities to earn airdropped tokens. The Blast and zkSync airdrops in June contributed to this spike. For continued growth, DappRadar emphasized the importance of delivering superior user experiences, robust development roadmaps, and strong teams.
Moreover, the report highlighted security as a significant concern for the Web3 industry. Q2 2024 saw $430 million in losses due to security breaches, a 5% increase from the previous quarter. Ethereum and BNB Chain were the most affected, each accounting for about 28% of incidents, while Solana was involved in 8%. Access control issues, though only 23% of incidents, accounted for 75% of the total funds lost.
The second quarter of 2024 marked a significant milestone for Web3 user engagement, driven by substantial growth in social dApps, NFTs, and decentralized exchanges. However, the industry faces challenges in sustaining this growth and addressing security concerns.
As the Web3 ecosystem continues to evolve, a focus on user experience, robust development, and security will be crucial for its future success.
