Number of daily Unique Active Wallets dropped only 5% to 1.9 million in November.
In November, the average number of daily Unique Active Wallets (UAW) blockchain dapps reached 1.9 million, a decrease of 5% over October. This decrease demonstrates the industry’s resilience during uncertain times. The dominance of games for the UAW has decreased from 45% to 42% MoM. However, the dominance decrease has also been attributed to the rise in interest in other categories, especially DeFi.
BNB Chain is in the first place as the most active protocol with 651,669 dUAW on average. WAX is in second place with 382,412 average dUAW, driven by various gaming dapps on the protocol. At the same time, Solana is the protocol that took the biggest hit due to its proximity to FTX.
The total value locked in DeFi platforms, also known as the TVL, was affected by the FTX meltdown. The biggest loss in TVL this month has been on Solana, with a 71% decrease reaching $366 million. Ethereum still leads with $32.1 billion TVL, down 24% from November. In November, its dominance dropped from 61.97% to 49%. BNB Chain and Arbitrum were the least affected protocols, with 3% ($7.95B) and 5% ($1.43B) decreases.
Gods Unchained remains the game with the most trading volume, reaching $18.3 million and 326,592 sales in November, a 47% and 61% decrease from the previous month. Axie Infinity is in second place, and it has been on a descending trend in the past 3 months, decreasing its NFT trading volume by 38% ($3.32M) and its sales count by 37.63% (3186) this month.
Furthermore, the NFT trading volume and number of sales are in decline by 17.47% and 22.24%, respectively. Despite this, two new NFT marketplaces launched this month. On November 23, ApeCoin DAO, a community-led organization of ApeCoin token holders, launched its own white-label NFT marketplace.
Later, on November 30, Uniswap announced that NFT trading is available on their platform. Its users can trade digital collectibles across OpenSea, X2Y2, LooksRare, Sudoswap, Larva Labs, Foundation, and NFT20 marketplaces using the platform’s NFT aggregator tool.
Moreover, according to scam and hack database DEFIYIELD, November has been the biggest month for DeFi scams, hacks, and exploits, as it saw $4.88 billion being stolen by cybercriminals. As of this month, 2022 has surpassed 2021 as the biggest year for crypto and blockchain hacking on record.
In the following report, we outline some of the most significant trends and figures in November.
- The industry’s daily Unique Active Wallets (dUAW) show signs of resilience, reaching 1.9 million, a 5% decrease from the previous month, despite the FTX meltdown.
- The most active protocol is BNB Chain, which averages 651,669 dUAW. Gaming platform WAM has seen an increase in activity of 9,185%, reaching on average 5,113 dUAW.
- The Total Value Locked in DeFi services has been heavily impacted by the FTX crypto crash, as it decreased 22% to $65 billion. Solana has seen the biggest loss, with a 71% decrease, reaching $366 million.
- Ethereum dominates the DeFi industry with $32.1 billion TVL, down 24% from October. With 3% ($7.95B) and 5% ($1.43B) decreases, BNB Chain and Arbitrum were the least affected protocols.
- The NFT trading volume and sales count are down 17.47% and 22.24%, respectively. However, two new NFT marketplaces, ApeCoin and Uniswap NFT, were introduced to NFT collectors who have maintained trading during the downward market.
- This month, $4.88 billion in funds were lost or stolen, the highest monthly value this year.
Dapp Industry Overview
Disclaimer: DappRadar keeps track of the number of Unique Active Wallets (UAW) interacting with a decentralized application’s smart contracts over time. This is also known as “on-chain” or “blockchain” activity. However, multiple dapps do not require executing a blockchain transaction to perform certain actions.
The activity outside a blockchain ecosystem is called “off-chain” or “Web 2.0” activity. Off-chain activity is traditionally measured by the number of Daily Active Users (DAUs). An example of off-chain activity is a user visiting the virtual worlds of The Sandbox or Decentraland, or a user who plays Axie Infinity without claiming rewards on the blockchain.
In November, the number of industry Unique Active Wallets for blockchain dapps reached a daily average of 1.9 million, a 5% decrease from October. This shows the industry’s resilience against heavily negative news from the crypto world, in this case the FTX turmoil. The blockchain gaming sector has seen its number of UAW decrease by 12% from the previous month, reaching 807,000. With that drop, the gaming sector’s dominance decreased too, and now sits at 42%. On the other hand, DeFi activity increased 21% from the previous month and reached on average 487K daily unique active wallets (dUAW).
Despite the bearish trend in the industry, there are a few silver linings that keep users optimistic about the future of the dapp industry.
BNB Chain is in first place as the most active protocol with 651,669 dUAW on average. This translates into a 1% increase from October, despite the FTX situation. WAX comes second with 382,412 average dUAW, driven by various gaming dapps on the protocol.
Compared to the previous month, the Layer-2 protocols Arbitrum and Optimism increased their unique active wallets by 91.19% and 52.87%, respectively. The increase in Arbitrum is driven as the speculators started interacting with the protocol in hopes of being eligible for the upcoming crypto token airdrop.
In contrast with the previous months, Ethereum broke its descending trend, and this month we saw an increase in the number of unique active wallets of 7%, reaching an average of 85,685 dUAW. The increase is driven by MetaMask Swap and the NFT marketplace Blur. MetaMask Swap had an increase of 30% in the past month to an average of 3,866 dUAW, while Blur registered an increase of 43.76%, reaching an average of 1,029 dUAW.
Solana is the protocol that took the biggest hit due to its proximity to FTX. Activity on the Solana blockchain decreased by 65% this November, reaching on average 39,768 dUAW. The most affected dapps on Solana were games, but despite this, Solana will continue to focus on building promising games. To learn more about this, read our interview with Solana Games’ General Manager Johnny B. Lee, and Tech and Product Leader Matt Sorg.
DeFi strongly affected by the FTX situation, with a 22% decrease from October
The total value locked in DeFi platforms, also known as the TVL, was affected by the FTX meltdown. In November, it decreased by 22% approximating $65.01 billion. On November 9, when Binance stepped away from a potential FTX buyout, the TVL had its biggest decrease. It plummeted 11% from $73.89 billion to $65.7 billion on that day.
Looking at the TVL of the top 10 protocols, we could observe how each of them has suffered from the FTX situation. Ethereum remains the most popular chain with $32.1 billion TVL, a 24% decrease from November. But relative to other protocols, its dominance decreased from 61.97% in October to 49% in November. BNB Chain and Arbitrum seem to be the least affected protocols, with a 3% ($7.95B) and 5% ($1.43B) decrease, respectively.
Avalanche took a big hit this November as its TVL dropped 28% to $1.81 billion. Despite this, Joepegs, an NFT marketplace on the Avalanche blockchain, announced that they raised $5 million in a seed round led by now-defunct FTX Ventures and the Avalanche Foundation. The funding from FTX Ventures was completed in June and has since been transferred out of FTX before recent bankruptcy events.
Furthermore, Optimism and Cronos had a 57% ($652M) and a 41% ($569M) decrease in their TVL. Cronos’s drop in the TVL started from fears of contagion amid the FTX fiasco, particularly concerns that Crypto.com, a Singapore-based crypto exchange, would collapse in the same manner as FTX. At the core of these concerns are rumors about potential insolvency, with analysts pointing out that Crypto.com is holding low-liquid cryptocurrencies like Shiba Inu and its own token CRO as reserves, which reportedly make up 40% of the exchange’s total assets.
The biggest loss in TVL this month has been on Solana, with a 71% decrease reaching $366 million. In this report, we analyzed how the most significant dapps on the Solana ecosystem have been affected by the FTX situation.
The NFT market continues its downward trend
The NFT trading volume measured in USD this month decreased by 17.47% from October, reaching $546 million. It is the lowest amount we have registered this year. In addition, the sales count decreased by 22.24% month-over-month.
The NFT trading volume on Ethereum has continued its descending trend for the past four months. This month, it decreased by 14%, reaching $277 million, the lowest NFT trading volume we have registered since June 2021. However, Ethereum still dominates the NFT market with 50.75% of the whole NFT trading value.
Following, Solana holds second place in NFT trading volume, and this month, despite the FTX situation, the NFT trading volume increased by 42%, reaching $95.1 million. This growth was mainly driven by the y00ts collection. Surprisingly, the NFT sales count on Solana decreased 33% this month as a total of 852,780 NFTs were sold on marketplaces.
On the other hand, Flow has witnessed a drastic decrease in the NFT trading volume, which dropped 51% to $7.6 million. Yet, the number of NFTs sold didn’t decrease that much. We registered a drop of 22%, as users on the Flow blockchain traded 409,069 NFTs in the last month.
Furthermore, Polygon had seen a similar decrease, and in November it reached $6.34 million in NFT trading volume. That’s a reduction of 42%. Interestingly, the sales count on the protocol increased by 135% this month, reaching 556,434. This increase is driven by the multiple cheaper NFT collections launching on the protocol. Among the NFT collections, Lens Protocol and Crypto Unicorns stand out. These two projects have seen an increase in the sales count by 21.77% and 203%, respectively.
While many chains saw a decrease in trading volume, BNB Chain noted an increase of 6%. However, the volume is still on the low side and has now reached $3.9 million. Seemingly the Baby Wealthy Club NFT collection contributed strongly to the increased numbers, as the trading volume for the collection shot up 190.38%in November.
Following the same trend as the NFT trading volume and sales count, also the unique traders count has decreased this month. In November, we had 886,694 NFT unique traders, a 20.29% decrease. It is the lowest amount we registered this year.
Looking at the top 10 sales of this month, we see how the Yuga Labs projects dominate the NFT market. Yuga Labs is the company behind CryptoPunks, Bored Ape Yacht Club, Meebits, Mutant Ape Yacht Club, Kennel Club Yacht Club, and Otherside. During these uncertain times, when blue-chips maintain most of their value and trading is concentrated on one asset class, we see a hyper-centralization of activity.
The competition in the NFT markets is heating up as new competitors emerge
This month, two new NFT marketplaces were introduced to NFT collectors who have continued trading throughout the downturn market.
On November 23, ApeCoin DAO, a community-led governing body made up of ApeCoin holders, launched its own white-label NFT marketplace.
Built by non-fungible token (NFT) infrastructure company Snag Solutions, the new community marketplace lists for-sale NFTs from Yuga Labs-owned NFT collections like BAYC, Mutant Ape Yacht Club (MAYC), Bored Ape Kennel Club (BAKC) and Otherdeed for Otherside. The platform aggregates sales across different marketplaces, but also allows users to sell on the marketplace itself.
Furthermore, on November 30, Uniswap announced that NFT trading is available on their platform. Its users can now trade digital collectibles across OpenSea, X2Y2, LooksRare, Sudoswap, Larva Labs, Foundation, and NFT20 marketplaces using the platform’s NFT aggregator tool. In addition, the platform says its new open-sourced Universal Router contract can save users up to 15% on gas fees compared to other NFT aggregators.
Accompanying the announcement is a $5 million airdrop to historical users of Genie, the NFT marketplace aggregator Uniswap acquired in June. According to the company, Genie users will be airdropped $300 for completing more than one transaction or $1,000 for holding a Genie: Genesis NFT before a snapshot taken by Uniswap in April. Eligible users can claim their airdrop in USDC for the next 12 months.
In November, OpenSea marketplace dominance increased by 0.9% compared to October, and their NFT trading volume decreased 17.33% ($258 million) month-over-month. It is the lowest trading volume we have registered since July 2021.
On November 6, OpenSea announced a royalties enforcement system for newly-created NFT projects that is built around a blacklist that blocks listed marketplaces from handling those transactions. The method targets marketplaces that do not fully enforce royalty fees, which are among OpenSea’s biggest rivals—a move that some have called anti-competitive. Later on, on November 10, it announced that it would continue to enforce creator royalties on NFTs following significant pushback from the community.
Following, Magic Eden increased its dominance this month by 8.3%, surpassing X2Y2. However, its trading volume increased by 53.63% ($94.4 million). This was driven by the increase of trading activity for Solana NFT collections and y00ts in particular.
Even though X2Y2 has kept the same market share as in October, its trading volume has decreased by 50.35%, reaching $90.23 million. In a Twitter thread in November, X2Y2 praised OpenSea for ultimately taking a stand for creator royalties, and admitted that many newly launched projects were using OpenSea’s blocklist code that banned those NFTs from being traded on marketplaces that don’t fully enforce royalties. They also wrote that it removed the Flexible Royalty setting for new projects using the OpenSea blocklist code, but it will also enforce royalties set now for all existing NFT projects.
Clearly, all markets are experiencing heightened volatility when interest rates and inflationary factors are uncertain, wars and global conflict continue, and other global factors play a role. However, NFTs and their underlying marketplaces are showing solid signs of enduring regardless of fluctuations.
The gaming sector still accounts for 42% of the industry’s usage
Gaming blockchain technology is one of the emerging, promising industries of Web3, with 807,457 daily Unique Active Wallets in November.
It is worth mentioning that even if the dominance of games for the UAW has decreased from 45% to 42% MoM, it still represents a good indicator for the sector as it dominates the Web3 industry. Furthermore, the dominance decrease has also been attributed to the rise of interest in other categories, especially DeFi and Social.
Looking at the top 6 games by trading volume, we could observe that in November, all of them suffered decreases, as the prices of the cryptocurrency dropped rapidly due to the FTX situation.
Gods Unchained remains the game with the most trading volume, and in November, it reached $18.3 million, a 15% decrease from the previous month. On November 10, the team announced that they will rename the coveted ‘Community Quests’ event to ‘Community Contests,’ adding newer game variations, modes, and challenges. The card game has partnered with TokenTrove, a trusted marketplace on Immutable X, to provide better engagement opportunities to its players.
Axie Infinity is in second place by trading volume, and it has been on a descending trend for the past 3 months. In November, the trading volume decreased by 38%, reaching $3.32 million. Despite this, the team announced updates for Axie Origin Season 2 on November 21. During this new season, the developers will include new mechanics such as Keep, Energy Burst, and Bloodmoon changes. Additionally, the update creates class-specific playstyles. Axie Origin S2 will alter cards, runes, and charms, and will replace the popular Axie Infinity Classic V2.
To get more insights on blockchain games and trends like virtual worlds, move-to-earn, and the leading game dapps, read our latest BGA Games Report.
November is the month with the most stolen funds
November has become the month of the most hacked and stolen crypto assets all year. According to DEFIYIELD data more than $4.88 billion was stolen this month alone. The second-highest month was October due to the Francisco Valdevino da Silva, aka the “Bitcoin Sheikh”, fraud where more than $766 million were defrauded and laundered.
The biggest exploit this month comes from Genesis, an exchange that facilitates trading, derivatives, and loans. It is one of the lenders that has suffered due to the extended crypto decline. The company has $2,8 billion in outstanding loans. On November 10, the business disclosed that its FTX trading account held $175 million. Due to “extraordinary market turbulence” after the FTX collapse, withdrawals were halted on 16 November, and keep going today. A Genesis representative said on November 22 that they wanted to avoid bankruptcy, and as of right now, the situation still needs to be clarified.
The second exploit is from the FTX Group, where approximately $1 billion in funds are lost. Furthermore, on November 12, the FTX US general counsel, Ryan Miller, tweeted that they were investigating “abnormalities” going on in the exchange, as it showed that the exchange faced an exploit of $380 million.
The list doesn’t end there because Deribit Exchange, a cryptocurrency derivatives platform, was exploited on November 1. On the Ethereum and Bitcoin blockchains, the hot wallet’s private keys were compromised. The exchange lost a total amount of 9,111 ETH and 691 BTC, which currently has a value of $28.31 million. The exploit did not affect client assets and cold addresses, and the company stated that they would cover the damages.
As of now, 2022 surpassed 2021 as the biggest year for crypto and blockchain hacks and exploits.
The global economy is currently experiencing significant challenges. Several market indexes and national currencies are under pressure, dropping in value and causing purchasing power to fall. The cryptocurrency market’s performance in 2022 has been notably poor as one of the newest industries.
The unexpected failure of the FTX exchange and its related organizations shook the cryptocurrency markets, Web3, and the dapp industry. The transition from normal operations to bankruptcy and fraud investigations took less than a week. It is worth emphasizing that blockchain technology did not fail and continued to provide services, allowing any user to transmit and receive assets. DeFi services saw an increase in activity during the FTX meltdown, highlighting the power of these decentralized applications.
Despite the negativity surrounding crypto, the sector is still focused on developing and driving the next wave of blockchain adoption. Blockchain technology is still robust and provides the foundation for building various innovative projects to revolutionize our financial system and economy. Furthermore, it gives users digital ownership and promotes self-custody.
Without a doubt, another bull run will come, and it may be significantly stronger than the previous one. When the market faces difficulties, survivors eventually become strengthened and will deliver higher quality products and services to their users. But most notably, dapps are becoming an integral part of the tech industry, powering the innovations of next-gen financial assets.