2022 will be a challenging year for the cryptocurrency and blockchain space, but the adversity they have faced has been fraught with positive implications for the decentralized application (DApp) ecosystem. DappRadar has published its annual report on the industry, focusing on challenges faced alongside notable technological achievements and a growing number of daily active users. The key takeaways from the DApp industry in 2022 are relevant amid
macro factors such as inflation across significant economies, the collapse of industry-specific projects like Terra/Luna and FTX, and market woes across the board. Perhaps most telling is the unique Active Wallet (ADR) data from 2021 and 2022, which shows a 50% year-over-year increase in average daily ADRs.
Fifty-eight million daily users in 2021 to an average of 2.37 million daily active users in 2022.
It should be noted that since February 2022, there has been a downward trend in DApp users, which DappRadar linked to the escalation of the war in Ukraine, as well as crypto-specific black swan events, including Terra/Luna and the collapse of FTX. The Decentralized Finance (DeFi) industry has been hit particularly hard in the wake of TerraUSD (UST) decoupling from Terra and the resulting cryptocurrency market crash, with a significant drop in Total Value Locked (TVL) of around 73% to $55 billion in December 2022. Layer-1 DeFi protocols saw the most significant decline in TVL, with Ethereum registering a 74.5% drop to $32.12 billion, while the second-largest DeFi ecosystem, BNB Chain, saw a 62.5% drop in TVL in 2022. Layer 2 protocols fared slightly better, with Arbitrum down 12% to $1.74B. Optimism’s TVL increased by 127.60% to $669 million.
On-chain data for non-fungible token (NFT) transaction volume has contrasted with DeFi year-to-date. NFT transaction volume increased by just 0.41% year over year, while the number of retailers increased by a staggering 876%. To reach 10.6 million users by 2022. NFT sales also showed a positive trend, increasing by 10.6% to reach 68.35 million. OpenSea remains the most popular NFT marketplace, accounting for 73% of organic NFT trading volume.
Blockchain gaming played a significant role in the DApp space, accounting for 49% of activity in 2022, averaging 1.15 million UAWs daily. Overall, the sector produced 7.4 billion transactions that year. Blockchain-based trading card game Splinterlands was the most popular platform according to DappRadar, growing by 85% to 217,914 unique monthly active wallets by 2022.
The Terra implosion accounts for $40 billion in lost funds, while DappRadar estimated the average loss per hack at around $283,000 and monthly losses at $728 million. The increased number of DApps reflects the resilience and potential of the sector, with projects evolving and innovating despite a challenging macro environment.
DappRadar’s 2022 review also includes hacks, steals, and thefts. A total of 312 attacks resulted in losses of $48.74 billion, the highest amount since Bitcoin’s inception in 2009.