Crypto Airdrops Boost Web3 Wallet Adoption, DeFi Growth Slows: Report
The number of unique active crypto wallets surpassed 10 million from April to June, according to a report from an NFT marketplace. The report charts Web3’s performance in the second quarter of this year. In Q2 2024, the crypto wallet user base increased by 40 percent compared to the March quarter. According to DappRadar, the trend of crypto airdrops is one of the main reasons why more crypto wallets are being added to the ecosystem rapidly.
Crypto airdrops lead to increase in creation of Web3 wallets
In his report DappRadar noted that airdrop farming is attracting more and more people to create crypto wallets and collect free promotional or reward crypto tokens.
Airdrop farming is the process where crypto seekers identify Web3 projects that announce token airdrops and participate in their games or contests to collect crypto tokens in their wallets.
Before crypto projects use this statistical information to organize airdrop giveaways, DappRadar stressed that this trend will not last long, especially due to multiple incidents of fraudulent “crypto giveaway” messages that have caused people financial loss.
“The current trend of airdrop farming has led to an increase in unique active wallets (UAW), but this increase may not be sustainable in the short term,” the company said in its report. “To ensure long-term user retention post-airdrop, it is essential to focus on delivering a superior user experience, robust roadmaps, and strong development teams.”
Interest in dApps is growing
Social media and networking-related dApps jumped 66 percent in the second quarter of this year, and interest continues to rise. The number of unique active wallets linked to social dApps surpassed 1.9 million between April and June, according to DappRadar.
With the creation of newer crypto wallets, the decentralized apps (dApps) sector has also managed to register a notable growth in the second quarter of this year. Built and supported on blockchain networks instead of traditional Web2 servers, decentralized apps are open-source software programs that are not controlled by a single person or company – instead, they are governed by their collective user bases.
The dApps around social networks have emerged at the top of the list of sectors that benefit from the increasing interest of people in dApps. Compared to Web2 platforms, dApps offer people more control over their content and monetization, while also keeping the threat of censorship at bay.
Less interest in DeFi and blockchain gaming
Decentralized finance (DeFi) growth has declined by four percent in recent months amid continued volatility hanging over the crypto market. With the hype surrounding crypto ETFs, countries announcing regulations for crypto companies, and changes in governments, the crypto market has seen a downward trend. Multiple hacks, scams, and legal battles between crypto companies and international authorities have also affected the sector.
“In Q2 2024, the total locked value (TVL) of the DeFi sector declined, from $175 billion (approximately Rs. 14,61,346 crore) in Q1 to $168 billion (approximately Rs. 14,02,892 crore) at the end of Q2,” the report said.
Blockchain gaming has also seen a similar situation, despite being among the top dApp categories globally. Between April and June, blockchain gaming’s share of the dApps category dropped by two percent.
Many who come into contact with Web3 through games and NFTs fear losing their investments to scams or hacks, which keeps them away from freely using these technologies. From hacks on Web3 platforms such as Gala Games, Lykke Exchange, and Holograph – hackers managed to steal $430 million in Q2 2024. However, the report estimates that the number of these incidents could take a hit due to the ongoing developments in the blockchain sector.
