Despite the crypto market starting the year with its head hanging, the Decentralized Applications (DApps) landscape seems not to be feeling all that cold, after the sector recorded strong growth in the first quarter of 2022 according to a Q1 2022 report by DappRadar.
As per the report, despite the market slowing down and at least $1.9 billion being lost in hacks and exploits during the first three months of 2022, about 2.4 million unique active wallets still managed to interact with DApps daily.
The recent exploit on Ronin and the wormhole Solana bridge which saw about $945 million stolen have been the biggest hits on the DApp ecosystem so far, accounting for more than 80% of the $1.9 billion in the first quarter. Such attacks have shown that Cross-Chain Crypto Is a ‘Bridge’ Too Far with the likes of Vitalik Buterin questioning the viability of cross-chain bridges earlier this year.
Overall, blockchain usage however remained stable during the period, losing a mere 5.8% against Q4 of 2021 but gaining 396% from Q1 of 2021.
Gaming DApps have emerged the most steady in the sector, with more than 1.2 million or basically 50% of users interacting with DApps. This has been largely boosted by the emergence of play-to-earn games and the wider growth of metaverse gaming.
Despite critics projecting a bubble burst for NFTs, the sector also remained strongly intact in Q1 generating $12 billion, not considering various hacks that countered the sector including suspicious activities on NFT marketplaces like Looks Rare and OpenSea.
“The industry is under a significant stress test and, so far, is handling things well and showing the true potential of cryptocurrencies and DApps.” Modesta Masoit, Head of Finance and Research at DappRadar said in a statement. “NFT collectors have become savvier and seek actual utility as projects look to deliver on promises made and new projects keep emerging. This period feels reminiscent of the post-2017 ICO phase. Now it’s time to see who’s in for the long haul.”
That said, the DeFi segment however emerged to be the most affected. With cryptocurrency prices recoiling starting mid-November, DeFi DApps also took a hit with the DeFi industry’s TVL estimated at $214 billion towards the end of March, 8.4% lower than December 2021.
Despite factors such as the Russian conflict with Ukraine derailing token price growth, confidence seems to be resuming due to the impact of Web3 being on display when UkraineDAO raised millions to support Ukrainians. Furthermore, the 64% increase in Terra’s TVL from Q4, 2021 also screams a bullish year ahead.
“Even though TVL and usage metrics are decreasing from the previous quarter, the industry appears to be consolidating and evolving to broaden its appeal.” The report read.