- Summary:
- Blockchain market analysis company, DappRadar has released its Q1 report showing trends and behavior in blockchain use. We give you the breakdown
Table of Contents
- Russia’s attack on Ukraine triggers market fear
- DeFi hit turbulence as usage sinks to a one-year low
- NFT goes against the grain, and gaming expands its footprint
- Ethereum alternatives grow their NFT and DeFi usage
- Growing interest in Web3 Metaverse
- More countries are lining up crypto regulations as adoption grows
DappRadar, a blockchain market analytics firm, has issued its Q2 2022 behavioural study report as the global digital assets market continues to make inroads into the mainstream financial system. For the most part, this paper looks at how people are using and adopting blockchain technology. In summary, it analyzes the effect of Russia’s attack of Ukraine, DeFi decline, NFT spike and organic growth in Ethereum network alternatives like Avalanche.
Russia’s attack on Ukraine triggers market fear
The worldwide events of the first four months of the year create a unique setting for blockchain technologies. Due to the disruption of global markets caused by Russia’s war in Ukraine, selling pressure on financial markets drove prices lower. On a positive note, the Web3 community rallied around Ukraine to support the country’s plight, amassing almost $60 million in crypto assets.
Also, Ukraine is one of the world’s most crypto-friendly countries. With 12.73% and roughly 12% adoption rates, respectively, Ukraine and Russia ranked first and second on the list of countries with the highest crypto adoption rates. Notably, when the war started, both countries saw an increase in the use of cryptography. Sanctions against Moscow have increased the amount of ruble being exchanged for Bitcoin. However, the BTC/UAH pair is still being traded at a premium on most exchanges.
DeFi hit turbulence as usage sinks to a one-year low
In the DappRadar analysis, it appears that the DeFi category has been the most hit. According to data from Q1 of 2022, the number of DeFi transactions fell to a one-year low, demonstrating that interest in this category has faded. However, the multichain paradigm provides different options outside of the existing blockchains, even if its recovery takes longer.
NFT goes against the grain, and gaming expands its footprint
As the other market segments struggled, NFTs were having a good time. In the first quarter, NFT dapps and markets on all blockchains processed 116 million transactions. In addition, the volume of NFT-related trades and transactions increased by 22% from Q4 2021 to an all-time high in Q1. However , the segment’s organic trade volume has fallen short of January’s record lows.
Source: DappRadar
On the other hand, Blockchain games account for 78% of the industry’s transactions and have grown 520% since Q1 2021. Despite their divergent paths, these categories are essential to developing the crypto sector.
Ethereum alternatives grow their NFT and DeFi usage
An unusual development in the first quarter was the appearance of powerful Ethereum network rivals. Avalanche, Polygon, and Solana appear to be eroding Ethereum’s market share. Although Ethereum’s NFT volume and DeFi’s TVL have expanded dramatically from Q1 2021, there has been a 58% decrease in the number of transactions processed.
Avalanche is currently handling 10,500% more transactions than a year ago and 100% more transactions than it did in December. Transactions on Polygon are now 2,000% higher than they were a year ago, while those on Solana have increased by 9,700% from Q1 2021.
New patterns of behaviour have emerged due to the gradual adoption of Ethereum alternatives. There has never been a more pressing need to move tokens within and outside the network. Blockchain bridges, platforms that allow cross-chain transfers, have a value of more than $50 billion locked up in them. On the other hand, they became a target of attacks, with losses totalling about $1 billion in the first quarter.
Growing interest in Web3 Metaverse
A social media study is tracking trends in Web3 metaverse mentions on Twitter. Institutional interest is growing as well. Fashion heavyweights like Gucci, Dolce, and Burberry have launched NFT collectables, while Nike and Adidas have worked with Web3 major brands. Also, The Sandbox and Decentraland will be home to virtual branches of HSBC and JP Morgan.
More countries are lining up crypto regulations as adoption grows
Because of how far they’ve come in the process of regulating cryptocurrency, these three regions demand extra attention: Asia, the United States, and the European Union. India has put a crypto taxation mechanism in place, while China continues to threaten the industry with bans. On the other hand, the United States, the United Kingdom, and the European Union are all anticipated to make significant headway on crypto legislation this year.