BNB Chain leads in dapp activity, but Ethereum remains the most valuable network
The dapp industry experienced a 50% increase in the number of daily Unique Active Wallets (dUAW) in 2022, rising from 1.58 million dUAW in 2021 to 2.37 million last year on average.
On-chain metrics of the dapp industry have been on a downward trend in the past months due to various events, including the war in Ukraine, the collapse of Terra Luna, along with the FTX and other scandals surrounding multiple centralized exchanges. Despite these challenges, the dapp industry has demonstrated its resilience and maturity, while adoption of blockchain technology by users and businesses suggests that the future of the industry is bright.
In this report, we will take a closer look at key metrics and trends to understand the dapp industry adoption.
The rise of NFTs has been a major trend in the dapp industry, and we will delve into the data surrounding NFT sales and average NFT transactions. We will also take a look at the shift in popularity towards NFTs and gaming dapps, as well as the decrease in the dominance of decentralized finance (DeFi) dapps. Furthermore, we will analyze dapp dominance through transactions and blockchain activity on the different blockchains.
- BNB Chain led all blockchains for dapps integrated into DappRadar in 2022 with 2,163, decreasing by 7% from the previous year; Polygon and Ethereum follow.
- A new trend in developer activity might be emerging, as modular blockchains, including Polkadot and Cosmos, saw their developer activity grow by 16% and 131.7% year-over-year.
- Ethereum surpassed 21.2 million NFT sales in 2022, processing the most trades across all networks, while Wax and Flow followed with 14.5 and 11.9 million sales respectively.
- Ethereum stands out as the network with the highest intrinsic NFT value surpassing $300 per NFT transaction, Polygon and Solana come next with an average NFT transaction of $104 and $88.
- The adoption of Layer-2 solutions is undeniable; Optimism and Arbitrum processed 18 million and 6 million transactions respectively, while IMX surpassed 9.7 million NFT trades.
Layer-2 solutions lead the way on dapp integration
Decentralized applications (dapps) have become an increasingly important aspect of the blockchain ecosystem. To measure the adoption of the dapps from a developer perspective, we analyzed the number of dapps by blockchain integrated into DappRadar last year.
One of the most striking trends in the dapp market in 2022 is the growing popularity of Layer-2 (L2) solutions. These networks, such as Optimism and Arbitrum, saw significant increases in the integration of dapps, with 590.91% and 160.87% respectively. This trend highlights the growing popularity of L2s among dapp developers and users, as they offer faster and more affordable solutions than Layer-1 blockchains, such as Ethereum, while still inheriting their security by design.
In contrast, some of the largest Layer-1 blockchains like BNB Chain, Ethereum, and TRON, experienced decreases this year. BNB Chain witnessed a 7.56% decrease, but still remains the most popular blockchain with 36.7% of the market share, with 2,163 dapps integrated this year. The recent trends in the market have paved the way for a wave of networks to gain traction, including Polygon, Avalanche, and Fantom.
In 2022, the blockchain with the most significant increase in the integration of dapps was Cronos, with a staggering 1,292.31% change from the previous year. On the other hand, the blockchain with the least increase in 2022 was Harmony, with a modest 24.59% change from 2021. The decrease in Harmony could be attributed for two reasons, the first one was because a bridge hack happened in June 2022, followed by the decision by DeFi Kingdoms (DFK) to leave the Harmony blockchain network. Instead they decided to create their own subnet on the Avalanche network.
Another trend we are witnessing is that more dapps launch on less well-known or less popular blockchains, such as Klatyn or Oasis. In 2021 the ‘other’ category represented 11.5%, but in 2022 the category grew to 16.4%. This shift in the dapp market could lead to new opportunities and growth for these emerging blockchains.
Ethereum and Cardano: the blockchains with the most active developers in 2022
Developer activity is a key indicator of the health and growth of a blockchain. It shows the level of interest and engagement by developers, which is important for the development of new features, increased security, network effects, innovation, and thus, adoption. A high level of developer activity indicates a more robust and engagement network.
The blockchains with the most significant increase in active developers in 2022, according to Token Terminal, were Solana and Internet Computer (ICP), with a 1,320% and 1,050% increase from 2021. It’s worth noting that even in the proximity of the FTX falling, and DeGods leaving, the trend in Solana still looks promising as the average number of daily active developers in the past 30 days only decreased -31.4%, still attracting an average of 69 daily active developers.
Furthermore, according to Alchemy’s report, as of January 1st, 2023 there were 1,148 unique Solana programs with at least one unique interaction, representing a 173% increase since January 1st 2022 when there were 421 unique Solana programs.
On the other hand, the blockchain with the smallest decrease in active developers was Ethereum, seeing its number of active developers drop 9.37%. Even with this decrease, Ethereum remains the blockchain with the most active developers, which in 2022 were daily 223. In second place, Cardano emerges with an average of 151 daily active developers, translating into a 26.47% increase from 2021.
It is interesting to note that three modular blockchains complete the top 5. Polkadot and Kusama saw 16,06% and 12.80% increase respectively in active developers in 2022. These two connected blockchain ecosystems attracted on average 129 daily active developers. Cosmos comes next. Polkadot’s interoperable parachains and Cosmos IBC protocol offer a flexible and scalable approach to building dapps.
Lastly, according to Alchemy’s Q4 2022 report a total of 1,021,000 unique users bridged from Ethereum to Optimism, Arbitrum, Starknet, or zkSync in the last year. And from that total 443,000 unique users bridged during Q4 2022 alone. That’s a 155% increase compared to Q3 2022.
With cheaper transaction fees and more scalable transactions per second, many developers and consumers are using Layer-2 blockchains. To build and use L2s, users must bridge ETH and other ERC20 assets from Ethereum to their name destination.
These statistics highlight a growing interest in using L2s to perform tasks that have been historically done on Ethereum mainnet.
Ethereum dominates the NFT sales count in 2022; Wax comes in second place
The NFT market has seen a significant shift in 2022, with a major increase in NFT sales count compared to the previous year. According to our data, the NFT sales count in 2022 reached 101 million, a 67.57% increase from the previous year.
Ethereum remains the top performer in the NFT market, holding 21% of the NFT market share, processing 21.2 million sales. This is not unexpected, as Ethereum has most of the blue-chip collections.
In second place we find Wax, with 14.5 million sold NFT assets, which is a 11.63% increase from the previous year. This increase falls in line with the activity in the gaming dapp Alien Worlds, one of the most popular blockchain games in 2022.
Interestingly, Flow and Binance Smart Chain (BNB) maintained almost the exact number of NFT sales from the previous year, with just a slight increase of 4.95% (11.9M) and 0.85% (1M) respectively.
The success of the number of NFT sales isn’t limited to Ethereum, Wax, and Binance. Various other chains have also seen success in 2022. Solana and Immutable X stood out as top performers, with an increase of 440% and 319%, respectively, reaching 12.9M and 9.8M trades. Polygon increased its sales count as well, reaching 13.3M, a 48.7% increase from the previous year.
However, not every blockchain improved in this context, with the biggest decreases in sales count seen from Ronin blockchain with a 51.79% decrease, reaching 5.5 million sales.
Ethereum’s average NFT transaction size outshines the competition
After analyzing the NFT sales count in the section above, we analyze the average NFT transaction size in 2022 identifying those blockchains that bring more value to the dapp ecosystem. For example, Wax processed the second most NFT transactions after Ethereum, but the average transaction size fell below $5 in 2022. This, in turn, reflects that Wax hosts more pure gaming transactions rather than high-value NFT collectibles.
Ethereum has the highest value of an NFT transaction, with an average of $246 in Q4 2022. This represents a decrease of 78.74% from Q1, where it was around $1266. Looking at the ETH price, the average transaction size in Q4 is about 0.19 ETH, a 52% decrease from 0.4 in Q1. So, both in USD and in ETH, the average NFT transaction value on Ethereum dropped over the course of 2022. This is consistent with the decrease of Ethereum price, which decreased 55% from January to December 2022.
Nonetheless, Ethereum still sits on top when it comes to transaction value. Ethereum NFT collections have higher floor prices as proven by its blue-chip collections and whale traders. This makes sure that NFT transactions on Ethereum are more valuable.
Throughout the year, every blockchain has seen a decrease in their average transaction size, reflecting the challenging macroeconomic situation and the value decrease of their native tokens. However, some networks have taken a bigger hit than others. BNB Chain and Ronin have seen the largest decrease, with 84% and 81% respectively, reaching an average of $67 and $14 in Q4, compared to $424 and $76 in Q1.
On the other hand, other blockchains have managed to sustain their average transaction size, with a lesser decrease. Polygon, managed to add value through the partnership with The Sandbox, and the successful launch of Reddit Collections, and Collect Trump Cards.
Flow also finished as the third blockchain with the most value in the NFT transactions processed, driven by the partnerships with NBA and NFL. Despite being more stable, its average transaction value is still lower than that of Immutable X. Both of the blockchains, have maintained almost the same average NFT transactions size, despite of the decrease of their token price. Furthermore, Immutable X is the only chain that actually had an increase from Q2, to Q4 in the average NFT transactions size.
Overall, it can be observed that the average transaction size on NFT gaming blockchains tend to be lower than NFT collectibles blockchain. Since NFT gaming blockchains are more oriented towards in-game items and virtual assets that are generally less expensive than scarce collectible NFTs.
DeFi dominance decreases as NFTs and gaming dapps rise in popularity
DeFi has long been the dominant category of dapps on blockchains, but looking at the overall data of 2022 it looks like this dominance starts to wane. According to our analysis of the dapps categories of the top chains in 2022 vs 2021, DeFi dapps are becoming less popular, while categories like NFT collectibles and gaming dapps gain ground.
In 2021 DeFi dapps accounted for 50-91% of all dapps on the top chains. Ethereum, Fantom, Avalanche, Cronos, Tezos, Harmony and Optimism all showed high percentages of DeFi dapps. However, in 2022 this dominance has decreased across all top chains, with only 39-56% of dapps being in the DeFi category.
One of the biggest drivers of this shift has been the growing popularity of NFTs. In 2021, NFTs were the dominant category on Ethereum, accounting for 56% of all dapps. This trend has continued in 2022, with NFTs remaining the most dominant category with 35%. Additionally, NFTs have also seen a significant increase in popularity on Tezos, rising from 0% in 2021 to 38% in 2022.
Gaming dapps have also seen a rise in popularity in 2022. Polygon, which had 60% of dapps in the DeFi category in 2021, saw a decrease to 21% in 2022 and an increase of dapps in the gaming category. Solana saw its DeFi category drop from a 43% dominance in 2021 to just 30% in 2022. But also here gaming saw a significant increase.
High-risk dapps also saw an increase in dominance on BNB Chain and TRON, remaining a significant category in 2022. High-risk dapps pose a significant financial or operational risk to its users. These types of dapps often involve the handling of large amounts of cryptocurrency or other digital assets, and may be vulnerable to hacking or other forms of theft.
In the past year, are becoming increasingly popular among users due to the potential for faster gains.
The shift away from DeFi dapps is not entirely surprising, as the DeFi space has become increasingly crowded in recent years. As more projects enter the market, it’s likely that we will see a continued diversification of dapp categories across blockchains. The rise of NFTs and gaming dapps is a clear sign of this trend, and it will be interesting to see how these categories continue to evolve in the coming years.
Analyzing dapp dominance through transactions and blockchain activity
Analyzing the dominance of the top dapps of the most popular blockchains by transaction count, we observed how the top dapps have a high level of dominance on their respective blockchain.
For example, in 2021 Alien Worlds on the Wax blockchain had 80% dominance, and Splinterlands on the Hive blockchain had 91% dominance. Additionally, it appears that the top dapps for a given blockchain tend to maintain their position in the following year, with Alien Worlds and Splinterlands continuing their lead in 2022.
However, it’s worth noting that the dominance of the top dapps on some blockchains like Wax, Hive, Solana, and BNB Chain has decreased in 2022. The transaction count for some of the top dapps like PancakeSwap and OpenSea has also decreased in 2022. This suggests that the blockchain ecosystem is becoming more competitive and diverse, which is a positive development for the industry.
It’s worth mentioning that Polygon is the best distributed network, as its top dapp in 2022 holds only 8% dominance. This indicates that Polygon has a more diverse ecosystem when compared to other blockchains. In addition, there’s a greater number of dapps that compete for user attention and their transactions. This is a positive sign for the long-term sustainability of a network, as it reduces the risk of relying on a single success, which could have negative effects on an entire ecosystem.
Furthermore, we observed how several popular dapps have maintained a high level dominance over their network, by looking at Unique Active Wallets.
Splinterlands represented 97% of Hive’s Unique Active Wallets (UAW) in 2022 with on average 230,550 daily Unique Active Wallets, and it was also the dapp with the most activity. PancakeSwap represented 46% of all the UAW of BNB Chain in 2022, increasing its footprint from 37% in 2021.
A new trend that we’re observing is the shift in the dominant category on Ethereum. In 2021, the top dapp on Ethereum was a DeFi dapp, Uniswap V2 with 21% dominance. However, in 2022 this became the NFT marketplace OpenSea with a dominance of 26%. This highlights the fact that Ethereum is increasingly being used as an NFT blockchain. Similarly, Polygon also shifted from DeFi to gaming, as the top dapp in 2022 was a gaming one. This is consistent with the announcements of multiple gaming dapps coming to Polygon.
It’s important to note that if most of the blockchain activity of transactions count and Unique Active Wallets relies only on a singular dapp, it could be a potential danger for the ecosystem. This is because it increases the risk of centralization, where a small group of actors or entities control the majority of the network’s activity and value. This can lead to a lack of innovation and competition, as well as potential security risks if the dominant dapp is compromised or fails.
Our analysis of the dapp adoption in 2022 highlights several key trends in the blockchain ecosystem. One of the most notable is the shift in user behavior from DeFi towards gaming and high-risk dapps. Additionally, we see that NFTs have remained significant, indicating that this sector will continue to expand.
This year has also seen the emergence of new networks and dapps, which are becoming increasingly important in the blockchain ecosystem. This increased competition is pushing innovation and development in the industry, and it will be interesting to see how these new players will impact the market in the future.
While this analysis has highlighted the dominance of the top dapps on certain blockchains, it is important to note that the diversification is still a work in progress, especially when it comes to the control and influence of certain dapps on certain blockchains.
Despite the difficult macroeconomic factors encountered in 2022, we remain optimistic about the future of this industry. Blockchain technology is still in its infancy, and there is still much room for growth and development.