Web3 users surge 40% to hit all-time high in Q2

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

According to a July 4 report report According to blockchain analytics platform DappRadar, unprecedented growth spanned several sectors of the decentralized application (DApp) industry, leading to an overall bullish trend.

Decentralized social apps and nfts drive growth in Q2

The social sector saw the biggest increase, with dUAW up 66%. This increase was driven by apps like Fantasy.top and UXLINK. The blockchain gaming sector also saw an uptick in user numbers, although its market share declined slightly.

Decentralized exchanges (DEXs) such as Uniswap and Raydium saw substantial increases in user activity. Uniswap’s dUAW increased by 80% and Raydium’s by 134%, due to an influx of meme coin traders.

nft marketplaces enjoyed their highest usage since Q1 2023, with $4 billion in trading volume across over 14.9 million individual transactions. Magic Eden’s market share rose from 17% to 22%, while Blur’s dominance fell to 31%.

Despite the increase in the number of users, the total value of cryptocurrencies locked in DeFi applications fell by $7 billion. Notably, this is a 4% decrease compared to the previous quarter. Tron and Arbitrum experienced significant losses in TVL, which fell by 17% and 9% respectively.

However, ethereum’s layer 2 solutions Linea and Base bucked the trend: Linea’s TVL increased by 420% and Base’s by 44%.

Meanwhile, DappRadar warned that dUAW’s spectacular growth might not be sustainable. They attributed part of the surge to “airdrop farming,” where users engage in activities to earn airdropped tokens.

The launches of Blast and zkSync in June contributed to this increase. The report highlighted the need for superior user experiences, solid development plans, and strong teams for continued growth.

Security remains a major concern

Meanwhile, the report highlighted that security remains a major concern for the Web3 industry. In the second quarter of 2024, $430 million in losses were recorded due to security breaches, an increase of 5% from the previous quarter.

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

Although access control issues accounted for only 23% of incidents, they accounted for 75% of the total funds lost. Other types of incidents, including flash loan attacks and identity thefts, each made up about 13% of incidents but caused only about 1% of total losses. On the other hand, phishing attacks, which comprised 3% of incidents, resulted in about 0.4% of the total financial damage.

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