Non-fungible tokens (NFTs) were the driving force behind a seven-fold growth in blockchain usage during 2021, according to decentralized applications store DappRadar.
In its 2021 Industry Report, Dappradar states that the importance of NFTs in the crypto industry rose dramatically, having reached an all-time high of $23 billion in sales. As celebrities, sports teams and big brands entered the market, the space has become more diversified and competitive in the process.
The report further states the NFTs sector has surpassed traditional decentralized apps in unique active wallets. Marketplaces like OpenSea, Atomic Market, and Solanart were among the most popular dapps, a testament to the popularity of these tools nowadays.
Per the report findings, the DeFi category hit a slowdown in 2021 though it got a boost earlier from Ethereum competitors, such as Solana, Avalanche, and Terra maturing to accommodate more projects. At $200 billion, the Defi marketplaces saw a sevenfold year-on-year increase in the total value locked.
Breaking down this figure, the study concludes that Ethereum remains the uncontestable leader with a 60% market share of total DeFi’s TVL. This was closely followed by Binance’s BSC ranking second with TVL of $22.75 billion, and Avalanche – third, with a $12.48 billion TVL. The fourth spot goes to Terra, sitting uncomfortably between Avalanche and Solana.
This surge came despite recent exchange hacks and chilling regulation and has been in part the product of the play-to-earn revolution, spearheaded by Axie Infinity. The Pokémon-inspired blockchain games store generated 1.4 million daily interactions with games dapps – almost half of the industry’s usage, and yielded $4.5 billion for in-game NFTs.
The investment in the blockchain-based games sector also experienced unprecedented growth, with influential VCs collectively pouring $4 billion into the category in 2021.
The metaverse is thriving right now
Another reason cited by the report to explain the robust surge in the use of decentralized finance (DeFi) dapps was “riding on the hype generated from Facebook’s rebranding to Meta.” In what appears to be the next obvious step towards the future, a Canadian investment firm recently purchased a digital plot of land for nearly $2.5 million in cryptocurrency.
The study highlights important insights pertaining to this nascent sector of the cryptocurrency market as well as the emerging startups with an authoritative status in the space.
“We’ve seen crucial progression in the dapp space this year, placing us on the cusp of mass adoption. While 2020 was ‘The Year of DeFi’, 2021 is certainly ‘The Year of NFTs’, with gaming thrown in in bulk over the last quarter. As these three categories converge, 2022 will, I expect, come to be known as ‘The Year of the Metaverse’, with project supporting and helping navigate this complex, cross-chain and cross-category paradigm stealing the spotlight,” said DappRadar Head of Finance and Research Modesta Masoit.
Overall, this gave new breath to the blockchain industry to expand across verticals even at times when prices were stagnant. The sector managed to keep expanding as a whole, recording 2.7-million of daily unique active wallets connected to dapps. For a sense of just how big the industry has become, venture capital funds have already poured $27 billion this year into companies that operate in the space.
The Dapp Industry Report by DappRadar depicts the factors that are boosting the blockchain ecosystem, using metrics and data to create an understanding of the latest trends. The report sums up different market scenarios to provide a basic overview of the market with respect to DeFi, NFTs, gaming and everything in between.