Title: "Overview of the Dapp Industry in October 2021"

Author: DappRadar

October confirmed the bullish trend in the blockchain industry. Additionally, after experiencing a record-breaking quarter, the NFT sector continued to move forward with no signs of slowing down. Meanwhile, the total locked value in DeFi reached an all-time high, with seven blockchains accounting for 95% of that value. Finally, the increasing number of users in the gaming sector laid the groundwork for mass adoption in 2022.

After several months of decline, the most important cryptocurrencies reached their respective all-time highs in October. ETH, SOL, LUNA, AXS, and others followed in BTC's footsteps.

In the dapp space, the blockchain industry continued to expand. An average of 2 million unique active wallets (UAW) connected to blockchain dapps daily. NFTs generated $4.2 billion in transactions, with some blockchains beginning to stand out in this area.

In DeFi, competition for TVL dominance intensified as several networks significantly improved their respective value metrics. Blockchain-based games, especially those involving virtual worlds, gained relevance due to Facebook's rebranding news.

Note: Unique Active Wallets (UAW) or unique wallets refer to unique addresses interacting with a given smart contract; therefore, UAW does not convert to unique users. A single user may interact with a single dapp using different wallets.

Key Points

In October, the number of daily registered unique active wallets in the dapp industry exceeded 2 million for the first time, a month-over-month increase of 21% and a year-over-year increase of 626%.

The market capitalization of the top 100 Ethereum NFT collectibles and NBA Top Shot reached $16.72 billion, an 18% increase from the figures recorded in September.

After an impressive summer, the NFT sector continued to maintain its growth momentum, with a trading volume of $4.2 billion in October, a 2% month-over-month increase.

The TVL of the DeFi ecosystem reached $219.8 billion, a 39% month-over-month increase; 93% of the industry's TVL is concentrated in seven blockchains.

Solana positioned itself as a very complete blockchain; in DeFi, its TVL exceeded $12 billion, a 50% increase from September, while it traded $240 million in NFTs and offered a plethora of upcoming games.

Metaverse tokens skyrocketed in value after Meta's announcement, with MANA rising 303% and SAND rising 128% since October 1.

Table of Contents

• Over 2 million unique wallets daily
• When mainstream meets the metaverse
• Blockchain-based games account for 55% of industry usage
• Polygon gains traction from games and NFTs
• The NFT sector supported from outside Ethereum
• Total locked value in the industry reaches a historic high of $219.8 billion
• Solana: Momentum is strong
• Conclusion

Over 2 million unique wallets daily

According to data from October, the blockchain industry continued to expand. More than 2 million (2.16 million) UAW connected to blockchain dapps daily for the first time. This represents a 21.24% increase from the average usage in September and a significant 626.5% increase compared to the same period last year. With the exception of Wax, which saw a 23% month-over-month decline in wallet numbers, other major blockchains experienced an increase in UAW.

Unlike the trends observed in the third quarter, DeFi saw the most significant growth in UAW, with a month-over-month increase of 32.49%, averaging 803,500 UAW daily. This is not surprising, as well-known blockchains like Solana, Terra, Avalanche, and Fantom have established themselves in the robust DeFi ecosystem in recent months.

Meanwhile, the gaming category is also growing steadily. The number of UAW interacting with gaming dapps increased by 19.72% in October. The most notable growth in this category came from Polygon, a network known for its DeFi dapps.

At the same time, the number of UAW in the NFT space also continued to rise. Over 142,000 UAW connected to NFT-related dapps daily, primarily driven by Solana and BSC, which improved NFT alternatives.

When mainstream meets the metaverse

Last week, Facebook, the sixth-largest company by market capitalization globally, announced its rebranding to Meta. This directly points to the metaverse, which will become the primary focus for this social media giant moving forward. While this may be a familiar concept for those involved in the blockchain space, particularly in the gaming industry, the metaverse remains a relatively novel and abstract topic for most people.

This directly impacted the prices of certain cryptocurrencies closely tied to the metaverse, such as Decentraland, The Sandbox, or Ember Sword. Following Mark Zuckerberg's announcement, Decentraland's native governance token MANA reached an all-time high of $4.11 on Halloween night, doubling in price since Zuckerberg's speech.

A similar situation occurred with The Sandbox's governance token SAND, which is currently priced at $2.35, a 125% increase from its all-time high in September.

While most virtual worlds are still in development, it is becoming increasingly clear that the metaverse has the potential to change how we socialize and even alter certain aspects of our lives. It is evident that a concept that was merely a dream a few years ago has now completely transcended the blockchain.

Games account for 55% of industry usage

Although DeFi is the fastest-growing category in terms of UAW growth, blockchain-driven games still represent the majority of active dapp usage. In October, 1.19 million UAW connected to gaming dapps. The dominance of the gaming category remained at 55% in September, improving from 49% in the third quarter.

Splinterlands is one of the major contributors. After experiencing an impressive third quarter, the user base of the trading card game grew by 3,260% quarter-over-quarter, with the Hive dapp continuing to grow last month. In October, Splinterlands was the second most popular game in the industry (based on on-chain activity), with over 651,000 UAW registered that month, a 44.38% increase from September.

Considering off-chain data, Axie Infinity is the most played game in the entire industry. According to the Sky Mavis team, it has over 2 million daily active users. However, the on-chain activity surge in October made it the third most popular dapp when only considering on-chain data. Driven by the AXS staking feature, users connected to the popular dapp more frequently. In October, 647,000 UAW connected to Axie, a 27% increase from September.

Additionally, there is an interesting case in BSC. Since the third quarter, BSC has become a reference point for GameFi. As a hosting platform for popular games like Mobox and CryptoBlades, the network's gaming usage increased by 16% month-over-month. Although the aforementioned two dapps saw declines of 26% and 25%, respectively, new GameFi dapps continue to enhance BSC's monthly player base. While Mobox (157,000 UAW) and CryptoBlades (89,700 UAW) remain locked in the top 10 games, new BSC alternatives emerge every month. In October, CryptoMines attracted over 112,000 UAW, while CryptoZoon saw this growth in September. Will this trend continue in November? Can CryptoMines solidify its position as a top game? We will keep an eye on it.

Polygon's Rapid Development

Not long ago, Polygon was recognized as a DeFi "player." Fairly speaking, it still has a favorable ecosystem, but it has lost ground to other networks (which will be detailed later). However, in October, the second-layer solution emerged with vitality in the form of gaming activity.

The play-to-earn mobile game Arc8, developed by Gamee, launched in September this year. With the game's launch, they announced a mining program to make registering for the game more attractive. Last week, after the mining phase ended, the Arc8 app fully launched, enabling new mini-games and positively impacting the price of the dapp's native token GMEE. In October, despite the end of mining activities, over 373,000 UAW joined Polygon games. Whether Arc8 can solidify a stable user base remains to be seen.

In addition to Arc8, Polygon also offers gaming options like the GameFi dapp Aavegotchi and the racing game Revv Racing. Furthermore, upcoming virtual worlds like The Sandbox and Ember Sword will also integrate into the Polygon network.

The good news for Polygon is that the future of the NFT sector also seems bright. Besides the obvious relevance provided by virtual worlds (rich in NFTs), the recent announcements by Bollywood and cricket stars entering the NFT market could play a significant role in Polygon's prospects. Notably, Polygon is an India-based project. The importance of Bollywood and cricket in the region is comparable to the influence of Hollywood and sports stars in the U.S., like Tom Brady or Steph Curry, or Lionel Messi and F1 in the Eurozone.

Under DappRadar's monitoring, several Hollywood and sports stars have joined the NFT craze in recent months, from joining blue-chip collections like CryptoPunks or Bored Ape Yacht Club (BAYC) to launching their own NFT collections on Ethereum or other alternative blockchains, giving the industry a unique feel.

The Bollywood effect will certainly be a point of interest in the coming months. As part of the future NFT market, recognition from celebrities in the global region will not only strengthen Polygon's NFT offerings but also expand the NFT market beyond the highly concentrated U.S. market, while also interacting with players in Southeast Asia.

NFT Development Supported from Outside Ethereum

The NFT sector experienced explosive growth in the third quarter, with cumulative trading volume exceeding $10.4 billion. Impressively, the sector maintained its growth momentum in October. In just the past 31 days, NFT transactions exceeded $4.2 billion, an increase of $148 million compared to September.

More importantly, the floor price of the top 100 Ethereum NFT collectible series and Flow's NBA Top Shot increased by 17.81% from the September record, reaching $16.72 billion.

Although the floor prices of some blue-chip NFT collectibles have declined monthly, their market capitalization has still risen. For example, the floor price of CryptoPunks decreased by 21.44% month-over-month, BAYC's floor price decreased by 10.23%, while CyberKongz and Cool Cats saw their floor prices drop by about 6% since the end of September.

On the other hand, in the current hype surrounding the Metaverse, virtual world projects like Decentraland and The Sandbox have pushed up their floor prices, contributing to the increase in market capitalization. Additionally, ETH's price increased by 50.32% compared to September 30.

It is worth noting that the dominance of in-game NFT projects slightly declined this month, dropping by less than 2%, reducing the dominance of NFT games from 17.02% in September to 15.46%. Notably, Axie Infinity scaled back its trading volume, negatively impacting gaming NFTs. However, despite the negative scenario, the NFT sector continues to grow.

While demand for NFTs still exceeds the growing supply, there may be a slight contraction in the market at present. In October, the number of NFT trading users reached a historic high of 3.7 million, which improved the previous negative impact, indicating that the NFT market is still moving in a positive direction.

In previous months, we detailed the progress of NFTs, especially on Ethereum. Some NFT collectibles hosted on Ethereum are widely regarded as having storage value, while others are projects that can generate passive income. Some of the previously mentioned NFT projects, as well as Art Blocks and Cryptoadz, fall into this category.

The status of blue-chip NFT collectibles undoubtedly plays a role in Ethereum's dominance in the NFT space (accounting for 82.11% of total NFT trading volume). However, as mentioned earlier, the decline of some of these collectibles has driven the development of other NFT trading markets beyond OpenSea.

While Ethereum's trading volume increased by 1% month-over-month in October, the trading volume on the network's most important marketplace, OpenSea, decreased by 14.37% during the same period. OpenSea has seen a decline in this metric for the second consecutive month, further proving that the development of the NFT sector does not rely on a single blockchain.

Notably, the NFT marketplace Solanart on Solana saw trading volume exceed $187.3 million in October, a 13.79% month-over-month increase. This made Solanart the third-largest NFT trading market by trading volume in October, following the existing OpenSea and Axie's marketplace.

Additionally, the trading volume on AtomicMarket on Wax also surged. Driven by the NFT game project from FarmersWorld, AtomicMarket's trading volume increased by 459.25% compared to last month, which is impressive.

In BSC, PancakeSwap has become the most used dapp in the entire industry. In October, the DeFi platform PancakeSwap's NFT market also saw growth. In just October, as a trading market, PancakeSwap attracted over 37,000 unique users, with a cumulative trading volume exceeding $39 million. These two figures represent significant increases of 140.72% and 676.67%, respectively. Impressively, despite the successful sale of the "Run it Back" series, Top Shot's market trading volume increased by 122.42%, and its unique users' monthly trading volume rose by 30.46%, reaching 124,000. The PancakeSwap market still ranked sixth in trading volume in October, surpassing NBA Top Shot.

Total Locked Value Reaches $219.8 Billion, Setting a New Record

In the third quarter, both NFTs and games performed strongly, making the performance of the DeFi sector seem relatively modest. However, as noted in DappRadar's third-quarter industry report, we observed some noteworthy events already occurring in the DeFi space, such as Solana's strong DeFi products and Avalanche's liquidity mining projects. Additionally, driven by the surge in cryptocurrency prices, the industry's TVL reached an all-time high of $219.8 billion in October, a 23.4% increase from September. Meanwhile, 93% of the industry's TVL is distributed across seven blockchains.

In terms of the aforementioned metrics, Ethereum remains in the lead. As of the end of October, Ethereum held $120 billion in TVL, accounting for nearly 55% of the industry metric. In recent months, the supply of DeFi dapps has increased, and despite the negative impact of high gas fees, Ethereum remains a vibrant network for DeFi.

In terms of TVL, BSC has been surpassed by Solana. Although BSC has the most used dapp in the industry and has seen a 23% increase in TVL since the end of September, it still cannot compete with the hot Solana. Besides PancakeSwap, other DeFi dapps like ApeSwap, Venus, and Alpaca Finance have attracted a large number of users by offering more liquidity mining. By the end of October, BSC's TVL reached $21.89 billion.

In terms of TVL, Terra remains one of the top four blockchains. The value on Terra exceeds $9.95 billion, with an 18% month-over-month increase. This is a positive trend, but Avalanche's performance is even more remarkable. Driven by strong liquidity mining products, Avalanche's TVL increased by 129% month-over-month. The case of Avalanche is also noteworthy, with a TVL of $8.38 billion at the end of October. The gap between these two blockchains has decreased from $4.78 billion at the end of September to the current $1.57 billion. Avalanche's growth from $184 million at the end of July to its current level is quite impressive.

When discussing DeFi, Fantom is another blockchain worth considering. This scalable network has already surpassed Polygon in terms of TVL. By the end of October, Fantom's TVL was $5.45 billion, significantly increasing by 287% compared to the end of September.

In summary, the DeFi race is a spectacle of seven blockchains competing for TVL dominance. In less than three months, the field has transformed from being dominated by Ethereum, BSC, and Polygon to a highly competitive space with many interesting options suitable for different types of investors. The development of this field in the coming months will be even more noteworthy. Solana: Momentum is strong As mentioned earlier, Solana's performance in the DeFi race is particularly prominent. By the end of October, Solana became the second-largest network by TVL, surpassing BSC to reach $24.9 billion. Its TVL increased by 35% month-over-month, currently accounting for 11.32% of the industry's total.

Gradually, Solana dapps are positioning themselves as an indispensable part of the DeFi industry. For example, the automated market maker (AMM) Raydium, as a liquidity provider, has become one of the most used DeFi dapps in the entire industry. In October, Raydium had over 238,000 daily active users, second only to PancakeSwap and 1inch. Serum, a decentralized exchange (DEX) benefiting from Raydium's AMM, reached a TVL of $1.6 billion by the end of October.

Additionally, it is worth noting that Sabre, Marinade Finance, Sunny, and Orca each hold at least $1 billion in TVL within their respective protocols. A very complete DeFi ecosystem has been created within the network.

However, we should not view Solana as a platform limited to DeFi. The network may be one of the most powerful NFT markets after Ethereum. Although it currently hosts several NFT series that are clearly "copies" of well-known Ethereum series, its trading market is thriving. As evidenced by Solanart, it ranks as the third-largest trading market in terms of trading volume in October.

By looking at upcoming game information, Solana is gaining traction. Among the broader ecosystem, one of the most popular games, Star Atlas, will be hosted on the network. To better develop the "play-to-earn" mechanism, this game will collaborate with the survival shooter game Decimated and the role-playing game Aurory.

Conclusion

The dapp industry may be at its best moment, as usage and value across all three major categories are experiencing growth. Gaming remains the primary driver of blockchain usage. In addition to existing virtual world projects, several gaming projects have already announced that virtual worlds are a key part of their development. For example, games like Axie Infinity, Splinterlands, Aavegotchi, and Dark Country integrate land features into their game mechanics. With the recent media attention on the metaverse, the concept of virtual land ownership is likely to gain popularity. We anticipate further growth in decentralized virtual worlds. After several months of impressive performance, the NFT sector may experience a cooling off.

After several months of trading volume exceeding $4 billion, October's trading volume reached $4.2 billion again. Although some of the most important Ethereum collectibles are in a consolidation phase, markets on other blockchains, such as Solanart, AtomicMarket, and PancakeSwap's own platform, are creating value. Additionally, it is worth noting that the market capitalization of NFTs is on the rise.

This is one of the most important metrics when evaluating NFT projects and is crucial for understanding NFT projects. Overall, it is important to pay attention to floor prices, while considering scarcity and other valuation metrics is also essential. With DappRadar's improved NFT page, along with our portfolio tracker and valuation tools, you can gain insights into such matters.

Last but not least, as mentioned in previous industry reports by DappRadar, DeFi is like a sleeping giant. This sector is becoming more mature, with well-known blockchains playing a crucial role in the decentralized finance industry. Currently, Ethereum has become the network for whale users, while Solana, BSC, and other blockchains will continue to attract new users, bringing us one step closer to mass adoption in the DeFi space.