Jinjin Finance Blockchain, August 6th Although the Curve vulnerability caused a lot of pain to the encryption market at the end of July, the entire industry still showed full resilience. The data paints a different and subtle picture-encryption user participation It has not decreased, and the market is full of vitality and relatively optimistic sentiment. Next, let us use 7 charts to interpret the encryption market situation in the past July.
1. Overview of the Dapp industry in July
In July 2023, the independent active wallet (UAW) index value of the Dapp industry shrank, with an overall decline of 13%, falling to an average of 1.7 million per day. Frankly, several factors contributed to this decline. On the one hand, continued regulatory uncertainty in the US may have led to a slight pullback in user activity; on the other hand, the cryptocurrency market rose at the beginning of the year. The vigilance was let down, causing several security incidents to erupt this month.
As shown in the figure above, in the Dapp category——
l The game vertical has made a comeback and regained its dominance, with the proportion of independent active wallets reaching 41%. Gaming’s market share hit its lowest level since 2021 last month, with its unique active wallets edging down 0.5% to 712,611.
l The DeFi vertical field was not greatly affected by the Curve vulnerability. After the surge in users last month, the proportion of independent active wallets dropped by 26% to 510,654, but still accounted for 30% of the total user activity.
l The performance of social Dapps remained relatively stable. The proportion of independent active wallets decreased by 2% to 257,726, and the market dominance remained stable at 15%.
l NFT continues to show a downward trend. This month, the proportion of independent active wallets decreased by 19% to 70,338, accounting for only 4% of total user activity.
In terms of blockchain performance, as shown in the graph above, BNB Chain emerged as the leader with 546,779 unique active wallets, dominating 21% of the industry. WAX and Polygon remained significant players despite a slight decline, though Ethereum and Arbitrum both experienced a slowdown, with Ethereum’s unique active wallets down 29.8%, a setback largely attributed to a weak NFT market.
Second, DeFi TVL decreased slightly in July, not greatly affected by the Curve vulnerability
In July, the total locked-up volume (TVL) of DeFi shrank slightly, falling 2.27% to US$75.91 billion. This marginal decline was mainly due to the many risk events that occurred in the DeFi field this month, such as:
l The anti-reentrancy lock of Vyper 0.2.15, 0.2.16, and 0.3.0 versions of the smart contract programming language is invalid. Malicious actors use reentrancy attacks to repeatedly re-sign contracts, resulting in unauthorized operations or theft of funds, including Curve As a result, some important projects including Finance were attacked. Black and white hat hackers and MEV Bots crazily took away funds through re-entry manipulation and rushing away. It is estimated that the amount used has been as high as 70 million US dollars.
l A Memecoin project “Bald” with a market value of $100 million on the Base blockchain was pulled by Rug. The deployer “BaldBaseBald” initially added 6,870 ETH liquidity to the liquidity pool, and then spent 1,360 ETH to buy BALD at an average price of 0.0004 ETH Tokens, 10,704 ETH was eventually withdrawn.
Ethereum still occupies a dominant position in the DeFi field, but the proportion of locked positions decreased by 8% to US$50.2 billion. Tron successfully regained the second position, and its locked positions increased by 3% to US$5.852 billion in July, while BNB Chain The lock-up volume fell by 21% last month, but Optimism’s lock-up volume has increased by about 7%.
3. In July, the transaction volume of the NFT market reached 632 million US dollars, and the sales volume reached 3.7 million
There were some major changes in the NFT market in July, and the transaction volume continued to decline. In the first week of July, the NFT transaction volume was about $182 million, and by the fourth week, it dropped sharply to about $57.5 million, a drop of nearly 68% in just three weeks. Total trading volume for the month was $632 million, down 29% month-on-month. At the same time, the number of NFT sales has also declined, from approximately 727,413 to 368,331, a drop of nearly 50%. On a monthly basis, however, the decline appears to have been less dramatic, at around 23%, with a total of 3.7 million sales.
The NFT market allows for this shift due to its diversity, and a decline in transaction volume does not necessarily mean that interest in NFTs as a whole has waned. Rather, it may suggest a shift in the focus of interest, and historically, the rise of DeFi has often been accompanied by stagnation or decline in the growth of the NFT industry, and vice versa.
Interestingly, NFT transactions on the Polygon chain surged in July, with the number of registered traders reaching 772,424 in a single month. This trend may indicate that the NFT market is shifting towards blockchains that offer more affordable options. In addition, despite the overall downward trend of the NFT market, the vertical field of generative art has performed quite well. Several generative art NFTs such as Fidenza, Ringer, and Squiggles have sold for more than 50 ETH.
**4. Will Yuga Labs lose control of the NFT market? **
Yuga Labs, the parent company of “Boring Ape” BAYC, seems to be slowly losing their once unshakable dominance in the NFT market. Although BAYC is still the NFT series with the largest trading volume, only two of the top ten NFT series by trading volume in July The Yuga Labs ecosystem series was shortlisted, which is in stark contrast to a few months ago, so it also raises an interesting question: **Are we seeing the end of the Yuga Labs monopoly and the rise of a more diversified NFT industry? **
However, it should be noted that although Azuki has 3 ecological series entering the top 10 in terms of transaction value, Azuki has not yet fully recovered from the downturn last month. Only Azuki Elementals achieved a strong growth of 55% in sales.
Vulnerabilities and hacks caused $363 million in losses in July
According to the latest data from REKT, July 2023 will be a turbulent month for the Web3 world, with 47 vulnerability incidents causing a total loss of up to 363 million US dollars, setting a record for such incidents this year. Ethereum had the most attacks at 29, followed by 13 on the BNB chain, and the rest on other blockchains such as Avalanche.
Among them, two vulnerability incidents involving Multichain and Curve are notable for their scale and impact. While the past few months have been relatively quiet, several security incidents erupted in July underscore how critical security measures remain in the Web3 industry, where security remains a top priority in a rapidly evolving digital environment.
Summarize
July 2023 is a month of dynamics and relative contraction for the crypto industry, and while the decrease in the number of daily unique active wallets indicates a slight slowdown in market activity, changes across verticals indicate that the industry is evolving.
The revival of gaming dominance and the significant increase in transactional activity on the Polygon platform are clear indications that the blockchain and Web3 ecosystem continues to be diverse, with greater market resilience and adaptability. Although DeFi and NFT experienced a downturn in July, they have not stagnated. The growth of the DeFi field and the NFT market continue to develop, and practitioners are also actively looking for new potential growth paths. In fact, the decline in NFT trading volume may represent an industry readjustment rather than a regression. As the industry continues to mature and grow, this shift is likely to become the norm, as market importance changes based on various factors.
Overall, the crypto industry remains a dynamic and rapidly changing landscape, and while certain trends and shifts may appear negative, they reflect the crypto industry’s ability to innovate and adapt to changing user preferences and market conditions . Going forward, valuing security and maintaining innovation will be key to a vibrant and long-term success of the crypto ecosystem.
Part of this article is compiled from Dapprader
