In the second quarter of 2024, the adoption of Web3 technology saw a significant increase, with a historic 40% surge in daily unique active wallets (dUAW) compared to the previous quarter. This growth was reported across various sectors of decentralized applications (DApps), indicating a positive trend in the industry.
The social sector experienced the highest growth, with a 66% increase in dUAW, driven by apps like Fantasy.top and UXLINK. Additionally, blockchain gaming platforms also saw a rise in user activity, although their market share saw a slight decline.
Decentralized exchanges (DEXs) such as Uniswap and Raydium recorded substantial increases in user engagement, with Uniswap’s dUAW up by 80% and Raydium’s up by 134%. This surge was attributed to the growing number of meme coin traders entering the market.
NFT marketplaces also witnessed a surge in usage, with over $4 billion in trading volume and 14.9 million individual trades. Magic Eden’s market share grew to 22%, while Blur’s dominance dropped to 31%.
Despite the increase in user numbers, the total value of crypto locked in DeFi applications saw a $7 billion decrease, marking a 4% decline from the previous quarter. Tron and Arbitrum experienced significant losses in total value locked (TVL), dropping by 17% and 9%, respectively.
However, Ethereum layer-2 solutions Linea and Base saw a positive trend, with Linea’s TVL surging by 420% and Base’s by 44%. DappRadar cautioned that the rapid growth in dUAW may not be sustainable, with part of the increase attributed to “airdrop farming” activities.
Security remains a major concern in the Web3 industry, with Q2 2024 seeing $430 million in losses due to security breaches, a 5% increase from the previous quarter. Ethereum and BNB Chain were the most affected, each contributing to 28% of the incidents, while Solana was involved in 8% of the cases.
Access control issues accounted for 23% of the incidents but resulted in 75% of the total funds lost. Other incident types like flash loan attacks and rug pulls each constituted about 13% of the incidents but caused minimal financial damage. Phishing attacks, making up 3% of incidents, resulted in approximately 0.4% of the total financial loss.
Overall, while the Web3 industry is experiencing significant growth in user adoption, there are still challenges to address, particularly in terms of security and sustainability. As the industry continues to evolve, it will be crucial for developers and platforms to prioritize user experience, development roadmaps, and team strength to ensure continued growth and success.