The second quarter is definitely a roller coaster, but overall, the positive trend of blockchain continues. Although the crypto market has plummeted, users’ enthusiasm for participating in the industry has not diminished, especially DeFi and NFT. New trends such as the multi-chain paradigm seem to have a positive impact on the entire network.
In the blockchain industry, competition continues to heat up. In the first quarter, we saw Binance Smart Chain (BSC) established its position with Dapps such as Pancakeswap. Currently, Binance is seeking to replicate the DeFi success story in the NFT field.
In the second quarter, Polygon made greater progress in adoption rates. Aave, Sushi, Curve, and several other Ethereum DeFi Dapps have now expanded to Polygon, so it is not surprising that the sidechain has increased by 13,000% year-on-year.
Ethereum itself remains as important as ever. Despite the sharp drop in the price of ETH, the TVL of the Ethereum network exceeded $53.3 billion, an increase of 1% from the previous quarter. For example, Aave, Uniswap and Curve increased 70.1% month-on-month.
In terms of NFT, although popular collectibles such as NBA Top Shot and Rarible (decreased by -16.67% and -7.52% from the number of only active wallets in the previous quarter, respectively) are experiencing market cooling, Ethereum’s new NFTs, such as Bored Ape Yacht Club (BAYC) and VeeFriends, still received positive welcome. The BAYC series was launched at the end of April and attracted more than 100 UAWs in June alone, with an average daily total sales of nearly 44 million U.S. dollars.
New ways to generate additional value from NFT are in place. Virtual land and in-game items are helping the NFT market get back on track. In the second quarter alone, WAX’s Alien Worlds and Ronin’s Axie Infinity each had more than 250,000 unique active wallets.
Polygon surpassed Ethereum with 73,000 unique active wallets per day, an increase of 13,000% over the previous year; at the same time, the TVL in the second quarter of 2021 exceeded US$4 billion.
While preparing for the London upgrade, Ethereum is still the top of TVL, valued at more than $53 billion.
PancakeSwap promoted the success of BSC in the DeFi field with 2.13 million unique active wallets in June; TVL increased by 32.8% from the previous month.
The NFT space seems to be cooling down, but in-depth data is the opposite; the sales of the only active wallet and the number of daily active wallets increased by 111.46% and 151.89% respectively from the previous quarter.
Axie Infinity attracts more than 4,700 unique active wallets every day, and the usage rate has increased by 360.61% month-on-month; playing games to earn money may be the key to mass adoption.
The game explores the advantages of DeFi. Mobox has more than 22,600 unique active wallets in June alone, and the total transaction volume exceeds 57 million U.S. dollars.
Summary of blockchain ranking changes
The sidechain Polygon not only made a huge leap in use, but also reached a new important milestone. The network surpassed Ethereum in the second quarter of 2021, with more than 73,000 unique active wallets every day. This number has soared by 13,000% year-on-year and by 845% compared to the previous quarter.
BSC continues to maintain a strong momentum. In the past six months, BSC has grown by nearly 2000%, reaching more than 394,000 unique active wallets per day. WAX also maintains a positive trend. With the support of NFT and game projects, WAX attracts 384,000 unique active wallets every day, an increase of 556% over the previous quarter.
On the other hand, Ethereum has regressed slightly in terms of utilization. In this quarter, there were more than 71,000 unique active wallets per day on average, a decrease of 17.4% from the previous quarter. It is worth noting that as more and more Dapps seem to be keen to follow the trend of “how Dapp migration continues to shape the industry”.
Polygon drives the multi-chain paradigm
Problems such as high transaction costs and low scalability have plagued the industry for a long time. In order to solve these problems, major DeFi and game Dapps such as Aave, Sushi and Aavegotchi decided to extend their functions to Polygon, which is the perfect solution for this situation.
Since expanding to Polygon, Aave’s TVL has reached $2.11 billion on the side chain alone. Considering Ethereum, this amount accounts for 22.56% of the total TVL. A similar situation happened with Sushiswap, whose TVL in Polygon accounted for 20.4% of Sushiswap’s total TVL.
Although it is too early to draw any conclusions, Polygon provides DeFi users with an alternative to interact with dapps such as Aave and Sushi in a more effective way. More affordable and faster transactions may lead to significant changes in the entire blockchain
Although it is too early to draw conclusions, Polygon provides DeFi users with an alternative that allows them to maintain interaction with Dapps such as Aave and Sushi in a potentially more effective way. More affordable and faster transactions may trigger significant changes in the blockchain.
Source: DappRadar and DeFiLlama
Source: DappRadar and DeFiLlama
The list continues, and other important Ethereum DeFi participants such as 0x, Kyber, and Curve have been integrated or announced to be integrated into the Polygon ecosystem. The 0x API allows users to provide liquidity across integrated sources such as Aave and Sushi. On the other hand, Kyber Network is about to launch the Rainmaker liquidity plan, which will distribute 30 million USD of KNC and MATIC tokens, which can be further compounded by staking on the corresponding Polygon pool.
Although from a technical point of view, the migration of Ethereum Dapps to Polygon seems to be smoother, it is still very attractive to see the transition of BSC native Dapps to multi-chain. Apeswap and Beefy are the latest projects integrated with Polygon, which showed positive results early on. For example, Apeswap has processed more than 157,000 transactions from 11,880 unique active wallets and generated nearly $85 million in transaction volume in the past 7 days.
Not only have integrated DeFi projects flourished in Polygon, but native Dapps such as Quickswap and Polycat Finance are also developing rapidly. The TVL of the decentralized exchange Quickswap has reached $1 billion, and Polycat Finance has promoted more than 36,000 unique active wallets in the past 30 days. In fact, about 29% of TVL is driven by Polygon’s native DeFi Dapps.
DeFi lock-up value is still concentrated in Ethereum
Ethereum has faced considerable challenges recently. Polygon and BSC have recently received most of the media’s attention. It is undeniable that Polygon itself hinders Ethereum’s DeFi dominance by attracting important Dapps such as Aave and Curve. However, as far as TVL is concerned, Ethereum is still the top blockchain.
Source: DappRadar, DeFiLlama and DeFistation.io
As of the end of June, TVL has exceeded $53 billion, and Ethereum still controls more than 60% of DeFi, a key indicator. It is worth noting that five DeFi Dapps (Uniswap, Aave, Curve, MakerDAO, and Compound) account for 62% of Ethereum TVL.
Among the above five Dapps, Curve’s TVL grew the most, up 151% from the previous quarter; Uniswap, which accounted for 15.61% of Ethereum’s TVL, grew 62% to $8.3 billion; MakerDAO’s TVL dropped by 21.4% from the previous quarter. , Currently at 5.6 billion U.S. dollars.
Although it is too early to come up with a real conclusion, Polygon has undoubtedly attracted a part of Ethereum’s DeFi users; it is clear that DeFi Dapps are still active in the latter’s ecosystem. As more DeFi Dapps are expected to expand to Polygon or other chains, it is worth paying attention to how DeFi will develop in the future.
Ethereum’s next step
Ethereum is preparing to make major adjustments to its transaction fee structure. For EIP-1559 included in the upcoming London upgrade, Ethereum will use two types of fees: a “fixed” fee will be destroyed after each transaction, and another optional fee can be sent to miners as a “tip” to speed up transaction.
In this way, the Gas fee will be calculated based on the real-time market rate instead of assigning variable rates due to bidding. In addition, as the costs incurred by this process will be destroyed, the supply of ETH will be reduced, thus becoming a deflationary asset.
With important changes approaching, Ethereum’s Gas fee is at its lowest level in a year. In the first quarter, the gas price per transaction fluctuated around 175 GWEI, which may have triggered the migration of some DeFi agreements to BSC and Polygon. Last month, the gas price of Ethereum has dropped to the lowest point of the year.
Once the three main testnets (Roepsten, Goerli and Rinkeby) are successfully launched, the London upgrade on the mainnet is expected to take place in the third quarter. As ETH becomes deflationary, assets become scarce, which may push up asset prices. Only time will tell whether Ethereum is capable of regaining the dominance that it has lost over the past few months.
Despite frequent liquidation and loopholes, BSC is still thriving
BSC has performed very well since the beginning of 2021. Although the large-scale liquidation caused Venus to have $100 million in bad debts, BSC’s TVL increased by 39.5% from the previous month to $26.2 billion.
However, most of the chain’s success can be attributed to a single Dapp. PancakeSwap attracted more than 2.13 million unique active wallets in June alone, and generated more than $863.5 billion in revenue in the same time period. Last month, the most used Dapp in all networks exceeded US$7.9 billion in TVL on average, an increase of 32.8% from the previous month.
Although Pancake is already at the top of the BSC ecosystem, countless interesting projects have also come from behind. As far as TVL is concerned, Venus is the second largest BSC Dapp, valued at US$2.54 billion. Autofarm, Pancake Bunny, BakerySwap and ApeSwap are the most commonly used Dapps in BSC. In June, they were able to drive more than 50,000 unique active wallets.
The functions in these Dapps can be combined across projects and even other vertical areas, thus providing BSC with a very complete and integrated ecosystem. In addition, important DeFi Dapps such as Curve, 1inch, Sushi and Cream have completed the expansion of BSC.
For example, Bakery is an automated market maker that can conduct NFT transactions on its platform. Using BAKE, users can obtain liquidity rewards and create unique NFTs that are highly appreciated in the market.
All in all, BSC’s DeFi prospects look promising. Current trends may indicate that the value proposition of the chain is not directly driven by TVL at this stage. Except for PancakeSwap, the total value of BSC’s project lock is not amazing. However, the widespread use of BSC’s native Dapp deserves attention. It is important that the Dapp involved needs to avoid errors such as Venus liquidation or Garuda vulnerabilities in order to maintain a healthy and trustworthy ecosystem.
Binance is eager to replicate the success of DeFi in the NFT field
Although DeFi Dapps continues to show strong momentum in the BSC network, Binance still chooses to launch the NFT market, which is a major event for the entire industry. Binance has been involved in NFTs, such as the DeFi collection in BakerySwap, which sells for as much as US$458,000.
Source: BakerySwap NFT Marketplace
Binance Marketplace aims to incentivize creators and traders with low fees and high speed. The digital artwork of the legendary Salvador Dali and Andy Warhol is the first product series announced, and more projects are coming soon. Professional e-sports team OG Esports has announced its NFT series of products. Binance Marketplace is definitely worth paying attention to in the next few months, especially when they launch other projects such as art, games, music, etc. But in terms of sales and traders, Binance still has a distance from NFT leaders such as Ethereum, WAX and FLOW.
NFT fever is still there
According to Google Trends, the NFT frenzy that peaked in March seems to be over. The latest trends indicate that the excitement generated by the NFT at the end of the last quarter is cooling. Although external factors such as crypto prices seem to weaken the industry’s valuation, in-depth analysis shows different results.
Source: Google Trends
NFT sales for certain agreements have declined from the previous quarter. For example, Flow, which is dominated by NBA Top Shot, continued to decline in user and transaction volume, down 16.62% and 66.87% month-on-month, respectively. Although basketball collection still leads the NFT field with an average of more than 20,000 traders per day, it is still far from its peak at the beginning of the year. It is hoped that improvements in technology and user experience will help reverse negative trends.
Another example is CryptoPunks. At the end of the last quarter, Ethereum’s collection transaction volume exceeded 95 million U.S. dollars, which plummeted to only 16 million U.S. dollars in June. Nonetheless, Punks sales are usually the most valuable, being integrated as a compelling collection.
Based on the latest sales, NFTs that provide added value or utility to owners appear to be gaining momentum. The virtual land and NFT that unlock the DeFi function are rapidly gaining attention. The upper limit of the gamification of Metaverse, game play, and GameFi is higher than ever.
Although sales seem to have declined, sales and the number of unique wallets indicate that this is not the case. Compared with the first quarter, sales soared by 111.46%, and the average daily number of unique wallets also increased by 151.86%. Reaching more people is the way to mass adoption. Earning games led by Axie Infinity are the key drivers of this surge. With more than 62,000 unique wallets in the past 30 days, it seems that a wider and more mainstream audience has finally arrived.
Source: Google Trends
Sidechain Ronin succeeded-Axie Infinity
In terms of transaction volume, Axie Infinity ranks among the top in the Dapp rankings. The transaction volume of Dapp inspired by Pokemon reached $84.1 million, an increase of 769% over the first quarter of 2021. In addition, Axie increased by 360.61% from the previous quarter, reaching more than 4,700 unique users on the chain every day. The main driving force behind these results is the shift to Ethereum’s sidechain Ronin, which allows users to interact with Axie universe without gas. In addition, according to Axie Infinity’s application data, the game itself has reached 295,000 players every day.
In addition, the Axie market also benefits from Axie’s activities. In fact, it lags behind OpenSea in numbers, reflecting the huge popularity of the game. The Axie market has traded $108.5 million in the past 30 days (a ring growth of 314.07%).
NFT-based game upgrade
The appeal of Metaverse games can be an important catalyst in the search for mass adoption. The previous section only detailed the current success of Axie as a money-making game. Game Dapps from other agreements have not fallen behind.
In the volume visualization below, WAX can make huge improvements. Most of them are directly driven by Alien Worlds, an innovative DeFi Metaverse that combines unique NFTs and tokens with the gaming experience, while enhancing WAX’s own markets such as Atomic Market.
Alien Worlds continues to increase its number by combining DeFi features with in-game collectibles. The NFT in Metaverse includes virtual land (in different game planets), which can provide the owner with the cost of the in-game mining process. In addition, Dapp’s governance token TLM can be used to pledge and vote on game change proposals, but it also requires the purchase and improvement of game items.
Currently, Alien Worlds leads all game Dapp users with more than 225,000 UAWs in the second quarter, an increase of 1087% from the previous quarter, and is the leader among all game Dapps, with total sales of $13.8 million, an increase of 1397% from the previous quarter.
The positive gaming trend extends to other blockchains such as EOS and Polygon. Upland on the EOS chain has improved in terms of usage and quantity. The virtual property trading game successfully increased the number of unique active wallets by 46.68%, reaching 24,375 unique users at the end of the second quarter.
Aavegotchi switched from Ethereum to Polygon in March last year, showing positive results. Although the number of unique active wallets has fallen by 22.45% compared to the peak in March, the next expansion will be the launch of Gotchiverse Realm, a digital meta-universe world. With the addition of additional game mechanics, such as mini games, the pixelated ghosts are expected to attract more users in the coming months.
With the proliferation of blockchains, faster and cheaper transactions can be achieved, and decentralized games can be upgraded through financial functions to create a unique ecosystem. GameFi combines the features of DeFi, games, and NFT to create an entertainment option that generates passive income. In addition, GameFi Dapps allow players to fully control their in-game assets in order to use them in different ways.
BSC’s Mobox is a recognized GameFi reference object. It allows users to pledge LP tokens or stablecoins to obtain rewards in the form of profitable agricultural tokens called KEY. KEY can be used to unlock NFTs, which can be used as game characters or staking assets in the MOBOX platform.
Mobox attracted more than 22,600 unique active wallets, and generated more than 57 million US dollars in total transaction volume in June alone. It is too early to draw conclusions, but the future seems bright. If similar projects can replicate the success of Mobox, the industry may be completely different in a few months.
Ethereum’s latest series
As mentioned in the previous sections, users want to optimize the value of their digital assets. Nevertheless, existing collections are still a strong trend in NFT demand. In fact, in each month of the quarter, at least two Crypto Punks or Meebits are among the top 5 sales.
Although the trading volume of OpenSea on the Ethereum market fell by 47% month-on-month, the trend seems to be reversing. On a monthly basis, traders and transaction volume increased by 46.24% and 5.32% respectively, which is an encouraging sign.
New and refreshing collectibles, such as Ethereum’s Bored Ape Yacht Club (BAYC), Punks Comics, and VeeFriends may be the latest behind-the-scenes in the collectibles market. BAYC has reached 40.1 million US dollars in sales involving 3,500 wallets in the past 30 days.
It is also worth noting that CryptoPunks and BAYC owners are about to receive rewards. The RTFKT platform has provided Punk owners with real-life sports shoes. The platform looks forward to repeating this behavior with other projects and inspiring collectors with real-life clothing. The plan does give more interest to the current collection.
All in all, the Ethereum Collection is successfully establishing itself as a high-profile collection. But perhaps more importantly, they are looking for a way to generate additional utility in the real world while preserving the digital avatar.
The blockchain industry will become very crowded
Although the DeFi and NFT scenarios are currently focused on a limited number of agreements, several other smart contract blockchains are preparing their respective ecosystems to enter competition, and some of them are worth a look.
Algorand’s pure proof-of-stake mechanism, PPoS, allows network transactions to exceed 1000 TPS. It has been announced that Balancer will become Algorand’s first automatic market maker, paving the way for the application of DeFi in the Algorand network. In terms of NFT, Algorand aims to be a reliable source for verifying digital identities in the blockchain, an interesting NFT use case that has not yet become mainstream.
According to PoolTool data, Cardano has more than $31 billion in ADA pledges from 667,456 unique active wallets. One might think that when DeFi is fully operational on this blockchain, funds will flow from the Staking pool to DeFi tools. However, ADA holders will be able to obtain staking rewards while using ADA to provide liquidity. This is just one example of how Cardano has entered the entire DeFi ecosystem. Cardano is currently in the middle of its roadmap, but when everything is done, this chain is definitely worth considering.
Polkadot is one of the most complex ecosystems in the industry. It consists of many autonomous networks called parachains, which are connected to the main blockchain called relay chains. Although Polkadot’s roadmap is currently underway, hundreds of projects have been built on top of the network, aiming to create a new generation of DeFi projects.
Similar to the Polygon situation, Solana is one of the few protocols that can withstand the fall in cryptocurrency prices. Solana is expected to process about 50,000 TPS. What’s more interesting is that the network speed also applies to its smart contracts, making the network the fastest smart contract blockchain in the industry. With the multi-chain paradigm at its best and with more than 250 projects built on top of Solana, the DeFi field may move towards another major shift.
Tezos has three characteristics that make it unique. On-chain governance that avoids forks; proof of liquidity equity, allowing equity holders and principals to flexibly combine different ways of using Tezos tokens; and formally verifiable smart contracts that enhance the security of the blockchain. In general, Tezos was created as a promoter of a safe and effective financial ecosystem. In the coming months, it is worth paying attention to the performance of Hic Et Nunc in the Tezos NFT market.
to sum up
DeFi and NFT are booming, while cryptocurrencies are not growing significantly. By mixing different components in a way that attracts more users, both vertical industries have found a healthy balance in the blockchain industry.
The next few months will be important for Ethereum. Both BSC and Polygon have made great progress this year. BSC’s PancakeSwap was the most commonly used Dapp last month. Polygon now feels that it is the de facto side chain solution of Ethereum. With the integration of the DeFi ecosystem, the impact of the London upgrade is worthy of attention.
Regarding the NFT field, although the decline in transaction volume has brought negative perceptions, important indicators such as sales and the only active wallet are on the contrary. Although money-making games like Axie Infinity and the new GameFi Dapps are becoming more and more popular, innovative series like BAYC and VeeFriends are providing refreshing designs for this space. In addition, key indicators such as the only active wallet may indicate that we are moving towards mass adoption.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/dappradar-report-polygon-surpasses-ethereum-in-the-second-quarter-of-the-roller-coaster/
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