Crypto 2022 will go in to the history books as one of the toughest years so far. We saw a bear market, spiced up with some external factors. For example, the Ukrainian-Russian war. Crypto itself also had a few major events. For instance, the Terra Luna implosion and the FTX collapse. Still, many projects kept building.
So, we’re going to have a look at the 2022 DappRadar dApp industry report.
A General Overview of 2022
2022 saw crypto run into a harsh bear market. Macro factors played a role. For instance, the U.S. Federal Reserve’s interest rate hikes and high inflation. Other external factors like the war in Ukraine played a factor as well. The crypto space also had an eventful year, with Terra Luna and FTX taking the spotlights.
🔹2022 was the year of rugs, bear market, and hacks. That is not all that we have witnessed. Many innovations were taking the blockchain industry to the next level!
Our yearly report for 2022 is now live!🎊
Hint: The dapp industry is always strong.
👉 https://t.co/Y6zElr9ruZ pic.twitter.com/IdPmlnibHj
— DappRadar (@DappRadar) December 21, 2022
Nonetheless, we also saw many positives. For example, The Merge was a major event. That’s where Ethereum reduced energy consumption by 99.9%. We also saw the DeFi sector come up with some interesting new features. ZK or zero-knowledge is the new keyword. They offer a new form of authentication.
Furthermore, we saw an increase in institutional adaptation in crypto. Many household names or brands entered the blockchain space. For instance, Nike, Adidas, Starbucks, and Disney, to name a few. Crypto also become sponsor of major events, like the World Championship football. Or how about the Super Bowl? Snoop Dogg, Dr. Dre, and Eminem stealing the show.
We also witnessed some major banks entering crypto. For example, Fidelity, BlackRock, and Goldman Sachs all entered the crypto space.
A Consolidating Industry, Despite the Current Market Conditions
So, despite the bear market conditions, many projects kept building. That’s a great development, and these projects will reap the benefits once the next bull runs starts. This also shows us that the crypto market showed resilience in this difficult year. For example, DappRadar saw a record number of dApps submitted. The lead protocols in transaction counts were Solana and WAX. We also see WAX as a leading protocol in average daily Unique Active Wallets. They share this with the BNB chain.
We saw a 50% increase in unique active wallets during 2022. As a result, the crypto industry could consolidate its position. Clear signs of a resilient industry that is maturing. The following picture shows some major highlights in crypto during 2022.
Source: DappRadar 2022 report
An Overview of DeFi dApps
DeFi also had a year full of challenges. Most importantly, we saw a serious decline in TVL. This happened after the Terra Luna collapse. From the January high of #211 billion, to $55 billion in December. That’s a loss of 73.97%. Cryptocurrencies prices also declined, this was another factor.
On the other hand, we also saw growth and new features or dApps. For instance, connecting TradFi (traditional finance) to DeFi. Major banks like J.P. Morgan, Société Générale, and DBS entered the DeFi space.
Although DeFi in general lost TVL, we also saw one DeFi sector gaining in TVL. That’s the Layer 2 solutions. More specifically, Arbitrum, Optimism, and Immutable X filled the Terra Luna gap. Arbitrum only lost 12% in TVL. They now have $1.27 billion TVL to show for. On the other hand, Optimism gained 127.6% in TVL.
Polygon dropped 79.6% in TVL and is now at $1.69 billion. Fantom lost 87.3% and sits at $575 million TVL. Cronos follows this trend and lost 57%. They now have a TVL of $558 million. However, Solana saw the biggest loss with a 94.95% drop. Their TVL is now at $237 million.
Despite all these negative numbers, the DeFi future looks optimistic. There’s plenty of venture capitalist interest. In the first 6 months of the year, VC’s invested over $14 billion into crypto. This included various DeFi projects. The following picture shows some major events in DeFi this year.
Source: DappRadar 2022 report
Scams and Hacks in 2022
In 2022 saw a total of 312 scams and hacks on DappRadar’s radar. This totaled $48 billion. Terra Luna alone was good for $40 billion, or 80%. CEXs saw the most attacks in this field. The FTX collapse made it to rank #4 with $1 billion. To sum up, without Terra Luna, the damage would not have been too bad. The picture below shows the top 10 scams and hacks for 2022.
NFTs Overview in 2022
NFTs kept making waves during 2022. The first quarter even saw the best NFT trading volume ever, with $12.46 billion. However, during the second quarter, it slumped to $8.4 billion. The Terra Luna effect and macro conditions also knocked on the NFT door. During Q3 and Q4, the trading volume slumped even more. The total stood at $4.4 billion. That’s almost peanuts compared to the 2021 Q3 and Q4, with $23.2 billion in trading volume.
The first half of the year saw an increase in sales count. Q1 with 483.13% or 28.44 million. Q2 saw an increase of 73.87% or 20.23 million NFTs sold. Q3 and Q4 were less productive, though. They decreased by 54.89% and 58.15% respectively.
Trader count was another area in which NFTs grew. Q1 by 675.88% or 3.18 million traders. During Q2, growth went up by 130.42% or 2.26 million traders compared to Q2 in 2021. Q3 still saw a 96.12% increase or 3.2 million traders. On the other hand, Q4 slumped to a 25.53% decrease or 2.7 million traders. See the picture below.
Source: DappRadar 2022 report
The decline in cryptocurrency prices is one factor why more people entered into NFTs. But we also saw mainstream NFT adoption and new marketplaces emerge. The NFT market generated $25 billion in sales. This gives hope for 2023, for even better numbers.
New NFT Marketplaces
There were also a few new NFT marketplaces. For example,
- LooksRare — They see themselves as a community-first NFT marketplace.
- x2y2 — Their goal is to be truly decentralized and secure. They put the interest of creators first.
There are a few more, and it proves that NFT marketplace competition is heating up. However, OpenSea is still the leader of them all. Their trading volume increased by 26.22% or $18.6 billion over 2021. Second is Solana’s Magic Eden, with a 268.13% increase in trading volume to $1.54 billion. See the picture below.
Source: DappRadar 2022 report
NFT Royalties
Collections can have royalty options in their NFTs for secondary sales. They vary from 2.5% to 7.5% or more. Marketplaces reacted differently to this debate. OpenSea dropped royalties and this caused a debate. Now they made it optional. Magic Eden initially made royalty-free options, but lost a large chunk of users. Now they made it optional and gained 90% of their users back. It’s a complex debate that may go on for a while.
Conclusion
During 2022, we saw a crypto winter. Macro events, Terra Luna, and FTX didn’t help. Still, we also saw consolidation and a more mature market, because of it. The market showed itself to be resilient, and many crypto projects kept building. One big positive is that the blockchain technology saw more adoption. This gives hope for the future.
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Decentralized applications (dApps) are software applications that are built on top of a decentralized network, such as a blockchain. They are designed to function without a central authority, relying instead on the decentralized network to provide security and reliability.
dApps can be used for a wide variety of purposes, including financial transactions, social networking, gaming, and more. They are often associated with blockchain technology, as they are often built on top of blockchain platforms such as Ethereum or EOS.
dApps have the potential to disrupt traditional business models and revolutionize the way we interact with each other and with organizations. They offer the potential for greater security, transparency, and decentralization, as well as the ability to operate without the need for a central authority.
It is important to note that the use of dApps is still in the early stages of development, and it is not yet clear how they will be adopted and used in the future. However, they are an exciting and rapidly evolving area of technology that is worth keeping an eye on as it continues to develop.