Web3 Users Surge by 40%, Reaching Historic High in Q2

In Q2 2024, Web3 user engagement reached an all-time high, with nearly 10 million daily unique active wallets (dUAW), a 40% increase from Q1.

According to a report dated July 4, a report Through blockchain analytics platform DappRadar, the unprecedented growth has extended to different sectors of the decentralized application (DApp) industry, leading to an overall upward trend.

Decentralized Social Apps and NFTs Grow in Q2

The social sector saw the biggest increase, with a 66% increase in the number of internet users. This increase was driven by apps like Fantasy.top and UXLINK. The blockchain gaming sector also saw a rise in users, although its market share declined slightly.

Decentralized exchanges (DEXs) like Uniswap and Raydium have seen huge increases in user activity. Uniswap’s user count has increased by 80%, and Raydium’s by 134%, thanks to an influx of meme coin traders.

NFT marketplaces saw their highest usage since Q1 2023, with $4 billion in volume across more than 14.9 million individual transactions. Magic Eden’s market share grew from 17% to 22%, while Blur’s dominance fell to 31%.

Despite the increase in user numbers, the total value of cryptocurrencies locked in DeFi applications decreased by $7 billion. Notably, this decrease was 4% from the previous quarter. Tron and Arbitrum suffered significant losses in TVL, falling by 17% and 9%, respectively.

However, Ethereum layer 2 solutions Linea and Base bucked this trend, with TVL on Linea increasing by 420% and on Base by 44%.

Meanwhile, DappRadar warned that the massive growth in dUAW may not be sustainable. It attributed part of the increase to “airdrop farming,” where users engage in activities to earn airdropped tokens.

Airdrops by Blast and zkSync in June contributed to this surge. The report emphasized the need for superior user experiences, strong development roadmaps, and strong teams to continue growing.

Security remains a major concern.

Meanwhile, the report highlighted that security remains a major concern for the Web3 industry. In Q2 2024, security breaches cost $430 million, up 5% from the previous quarter.

The Ethereum and BNB chains were the most affected, each accounting for around 28% of incidents, while Solana was involved in 8% of cases. The remaining incidents were spread across different chains, including Polygon and Arbitrum.

Although access control issues accounted for only 23% of incidents, they were responsible for 75% of the total money lost. Other types of incidents, including flash loan attacks and carpet-pulling attacks, each accounted for about 13% of incidents but only about 1% of the total losses. On the other hand, phishing attacks, which accounted for 3% of incidents, resulted in about 0.4% of the total financial damage.