Gaming Dominates Blockchain Activity
According to market research company DappRadar, gaming accounted for 48% of all blockchain activity in January, a notable increase from 45% in December. The number of unique daily active wallets engaged in gaming reached 839,436 during the month, marking a significant indicator of blockchain gaming’s long-term potential. However, this figure still reflects a sector that has not yet achieved widespread mainstream acceptance. DappRadar noted, “The influx of game alphas and updates continues in the blockchain space, creating a growing wave of excitement for the future.” As the industry evolves, more thrilling advancements are anticipated in the coming months.
Optimism Amidst Challenges
While such optimism might seem unwarranted given the ongoing crypto winter and global economic challenges, it’s essential to view it in context. After a difficult year in 2022, there are signs that blockchain gaming may be on the upswing. DappRadar’s report indicates that 2023 has begun with a strong bullish trend, particularly highlighted by growth in the NFT sector. On-chain metrics reveal robust activity, suggesting a healthy quarter ahead for NFTs.
Growth in Total Value Locked
The total value locked (TVL) in decentralized finance (DeFi) protocols reached $74.6 billion, reflecting a 26.8% increase from the previous month. The NFT market alone recorded trading volumes of $941 million and a sales count of 9.2 million. Polygon emerged as a standout performer with a staggering 124% rise in trading volume and a 157.39% increase in sales, buoyed by the popularity of its NFT projects like Collect Donald Trump Cards and the launch of Mocaverse Realm Ticket Pass. The rising TVL is a positive indicator for the health of blockchain ecosystems.
Market Activity and Trends
OpenSea, the leading NFT marketplace, experienced a trading volume increase of 66.58%, reaching $495 million in January 2023, which accounted for 58% of the entire NFT market’s trading volume. Additionally, the month saw over $14.6 million lost to exploits, marking the lowest figure since January 2022, which DappRadar interprets as a sign of recovery in the market.
Active Wallets and Blockchain Popularity
Despite an increase in gaming wallet activity, the overall number of unique daily active wallets declined by 9.55% to 1,730,542 compared to December. WAX emerged as the most popular blockchain for gaming, averaging 394,480 unique active wallets, a 3.39% increase from the prior month. The blockchain game Alien Worlds and the NFT marketplace Atomic Assets were the leading decentralized applications (dApps) on WAX. Polygon followed closely with its own notable performances, despite a slight decrease.
Solana and Ethereum Show Resilience
In terms of performance, Solana was the top blockchain in January, experiencing a 70% increase in unique active wallets, averaging 53,683. This growth can be attributed to the rising use of Solana’s DeFi applications such as Raydium and Orca. Meanwhile, Ethereum also noted a 39% uptick in activity, hitting an average of 116,255 unique active wallets, driven by the popularity of NFT marketplaces like OpenSea.
Staking Solutions Gain Traction
Solana’s total value locked surged by 57.33%, reaching $548 million, largely due to Marinade Finance, which saw an 84.32% increase in its TVL. Marinade has introduced a token incentive program for users depositing Solana tokens in exchange for mSOL, a staking derivative. Furthermore, the shift of Ethereum to a proof-of-stake model has sparked interest in staking solutions, positively influencing platforms like Lido, whose revenue has risen alongside Ethereum’s staking earnings.
Positive Trends in the NFT Market
The NFT market exhibited signs of recovery, with trading volume in January increasing by 37% to $941 million, the highest level since June 2022. NFT sales also rose by 38%, amounting to 9.2 million. Ethereum continues to dominate the NFT space, holding 78.5% market share and witnessing a trading volume rise of 37.29%. Yuga Labs’ NFT collections have significantly contributed to this growth, particularly with the launch of their Sewer Pass NFT, which provides access to an online game.
Performance of Other Blockchains
Polygon’s NFT trading volume more than doubled, reaching $46 million, while sales soared by 157.39% to 4.5 million, largely driven by the success of recent NFT launches. Immutable X experienced a slight decline in trading volume but saw an increase in sales count. OpenSea’s continued dominance in the market is underscored by its substantial trading volume, reaffirming its leading position in the NFT ecosystem.
Exploits and Security Improvements
The most significant exploit of January occurred on the LendHub protocol, resulting in a loss of around $6 million due to a vulnerability in the contract duplication. This incident highlights ongoing security challenges in the cryptocurrency space, even as the total losses due to hacks have decreased significantly compared to previous months. DappRadar concludes that the positive on-chain metrics in DeFi and the NFT sectors signal a hopeful outlook for the crypto market’s future, with expectations for recovery and growth in the months ahead.
