Ether remains strong, while Polygon emerges as the biggest winner in May
Decentralized dapps industry faces exponential growth in the first 5 months of 2021. The key driver behind user and transaction growth is the growing DeFi and NFT ecosystem. This growth has brought in new users, new dapps and existing dapps with a multi-chain paradigm.
This May, the value of cryptocurrencies plummeted, affecting many players in the industry. mid-May saw bitcoin and ethereum both fall by more than 40%, while many cottage coins are following a similar trend. Although the dapp industry is highly correlated with the crypto ecosystem, the crash did not affect the blockchain dapp industry to the same extent.
Furthermore, the crash was a huge win for the overall ecosystem of DeFi. For example, Ether’s largest dapps such as Uniswap, Compound, Aave or MakerDAO did not experience any problems. Even under the extreme pressure of multiple cryptocurrency devaluations, the dapps still work as designed. However, not all DeFi dapps coped well with the crash, such as Venus on Coin Smart Chain, which was saddled with a huge debt.
On the other hand, empiricism from the Polygon protocol is abundant. Not only did the sidechain handle the cryptocurrency crash without any major issues, but the native MATIC tokens held their value well. The recent news of American billionaire Mark Cuban’s investment in Polygon has sparked a new wave of interest. It has led to an increase in both the token price and the total value locked in the DeFi ecosystem.
Finally, there are some contradictions in the NFT space. Sales volume declined for the second month in a row. At the same time, wallet activity and sales are trending up. This suggests that the NFT craze has calmed down, at least in terms of sales, and that wallets are trading cheaper NFTs. thus, this situation may lead to a more sustained phase of market development rather than a phase full of hype and greed.
Starting with TOP
The DeFi Ecosystem’s Value Stream
DeFi maturity reveals a bright future
NFT’s growth trends
NFT is about to become mainstream
Uniswap V3 processed $17.3 billion in the first month
May 2021 – Key Takeaways
In May, the blockchain industry created approximately 1 million unique active wallets. the BSC and WAX protocols were responsible for 80% of this.
BSC is the blockchain leader with over 417,000 unique active wallets as of the end of the month. pancakeSwap is the leading dapp with approximately 350,000 unique active wallets per day.
80% of the total locked value generated by all blockchains belongs to Ether’s DeFi ecosystem ($65 billion).
Total BSC locked value declined by 50%, with the biggest trigger being the Venus dapp.
Polygon’s total market cap grew by 1102% and reached 5.7 billion TVL at month-end.
The NFT market declined 5% to $350 million in May, driven by multiple dapp and NFT collections.
Despite the negative growth trend in the NFT market, Axie Infinity, Dark Country and R-Planet were the best performing months of the year so far, up 201%, 659% and 141% YoY, respectively.
Starting with TOP
May 2021 was a busy month for the blockchain industry as more than 1 million unique active wallets connected to the blockchain. Over 480 new dapps were launched during the month, while the DeFi space locked in over $81 billion in value on 3 major protocols – Ether, BSC and Polygon.
Among unique active wallets, the largest blockchain was Coin Smartchain (BSC), with over 417,000 wallets per day at the end of the month. The biggest driver was DeFi platform PancakeSwap, which attracted more than 350,000 unique active wallets per day as of the end of the month. In May, DeFi dapps dominated the BSC ecosystem as they generated the most traffic. In addition, most new dapps fall into the DeFi category.
The Wax blockchain ranked second, despite a 31% decrease in activity compared to the previous month. The blockchain created more than 370,000 unique active wallets. The biggest drivers were Alien Worlds (230,000), AtomicAssets (40,000) and AtomicMarket (31,000). While the majority of BSC activity is in the DeFi space, the Wax blockchain is tailored for NFT usage. Digital collectibles, NFT-powered games and NFT-powered gamified DeFi platforms dominate here.
Flow activity dropped in May, and now Ether holds the third spot again with 86,000 unique active wallets. The change in the charts was caused by a number of dapps. First, Flow’s main dapp NBA Top Shots showed a downward trend in May. On the other hand, the release of Uniswap v3 has increased the use of Ether blockchain activity. Uniswap is responsible for about 90% of Ether’s on-chain activity.
Finally, the Polygon blockchain has more than 36,000 unique active wallets. While the protocol ranked fifth, it saw the largest increase in May. polygon grew more than fourfold from 8,500 unique active wallets in April to 36,000 in May. This activity was driven by QuickSwap (12,000), Polycat Finance (6,300) and Aave (6,000). Overall, Polygon’s growth was driven by two categories of DeFi dapps: ethereum dapp migration and new project launches.
Value streams in the DeFi ecosystem
As trading activity in Shibu Inu and other dog-themed tokens raised the price of Ethergas, these fees spiked when the overall market value fell. High gas fees on the ethereum blockchain are nothing new, but these developments are the catalyst for the latest trend in the DeFi ecosystem: multi-chain expansion. dapp has adapted to the problem of gas fees and expanded its services to other blockchains. Adopting a multi-chain paradigm is the next stage of blockchain development. dapps’ future success may depend on their ability to run well on a variety of blockchains.
While ethereum still leads the DeFi ecosystem in TVL ($64 billion), the Polygon protocol made the biggest improvement in May 2021. polygon TV grew 1102% month-over-month, reaching $5.7 billion at the end of May. For Polygon, this past month was the best month yet.
Contrary to Polygon, we are seeing negative trends in the Coin Smartchain. in May, BSC’s position weakened, with its TVL dropping by half compared to the end of April. The largest drop was also seen in Venus, one of the most popular loan agreements. the cryptocurrency collapse had a negative impact on the Venus native token (XSC), leading to a massive liquidation. As a result of the liquidation, the agreement ended up generating over $100 million in bad debt.
DeFi’s maturity shows a bright future
May’s cryptocurrency collapse was not the first drop in market value. In fact, in March 2020, bitcoin and ethereum lost 50% of their value in a matter of hours. makerDAO and other loan agreements faced liquidation issues, which almost led to the collapse of MakerDAO. However, in these tense moments, the summer of 2020 DeFi arrived.
The MakerDAO community made important decisions to mitigate the risks associated with industry turmoil. First, the protocol introduced stablecoin as collateral. In addition, the risk parameters were adjusted. The recent cryptocurrency crash did not cause any major problems for ethereum users. uniswap, Compound, Aave and MakerDAO dapps worked as designed.
On the other hand, crypto affected the TVL of the major protocols (the sum of Ether, BSC and Polygon TVL). Before the collapse in mid-May, the cumulative TVL exceeded $115 billion, however, at the end of May, the TVL was only slightly above $80 billion. Falling prices in the crypto market were the biggest contributor to the TVL decline, and had a significant impact on the automatic liquidation within the loan agreements. TVL is still more than three times higher than it was in January if compared to January. Furthermore, TVL continues to grow even after the collapse.
It is safe to say that crypto crashes have had the biggest impact on the industry’s newest products, especially dapps on BSC. the reason for this may be that loan agreements are eager to take higher risks to attract more users. On the other hand, the DeFi dapp on Ether proved to be more resilient to the cryptocurrency crash, suggesting that the DeFi ecosystem is becoming mature. After all, the DeFi ecosystem on Ether has faced at least one industry crash, but they have not let users down and continue to work in the expected manner.
NFT’s growth trend
In May, the NFT trading market saw a 5% drop in sales volume. This is the second consecutive month of declining volume. The decrease was mainly due to Flow and Wax. Flow only brought in $35 million in sales, a 50% decrease from April. Activity around NBA Top Shot is decreasing as the platform works to improve package sales and the user experience. Despite many initiatives, NBA Top Shot is struggling to return to the heights of February and is facing negative trends.
The decline in sales on the Wax blockchain was caused by a general decrease in trading activity on Alien Worlds and the dapp. alien Worlds fell 72 percent from $9.4 million in April to $2.6 million in May. On a more positive note, May was a pretty exciting month for the Wax blockchain as a whole. Dark Country took in over $500,000 from a public land sale, meaning the game sold almost twice as much as it did in April. Next, R-Planet saw a 170% increase in sales in May, generating over $5 million in revenue.
On the other hand, some dapps had their best months to date in 2021. For example, Axie Infinity generated over $22 million in sales on the Ether and Ronin networks. dapp activity was driven by its own Ronin sidechain solution, which gives players the opportunity to trade without paying any gas fees. It allows users to buy and sell Axie Infinity NFT for free in a cheaper way. as a result, the platform is not only the number one collection in the NFT space only.
Although CryptoPunks saw a 21% drop in trading volume in May, it remains the largest dapp on Ether with $69 million in trading volume. One of the biggest triggers for significant trading activity was the Christie’s auction held in early May. In addition, just before the auction, Larva Labs released its collection of Meebits. Since all CryptoPunks and Autoglyph owners have the right to cast Meebits, this led to some trading activity among CryptoPunks owners.
Finally, there were several memorable best-selling games in May. NooraHealth’s Save Thousands of Life, sold for $5.1 million. Six out of ten sales belonged to the newly launched third Larva Labs series, called Meebits.
In short, the general trend of high priced NFTs seems to be cooling down. relatively inexpensive games such as Axie Infinity, Dark Country or R-Planet are starting to drive NFT market activity. This type of sales is extremely important for long-term growth as it provides an opportunity to attract the masses to the industry.
NFT is about to become mainstream
Despite the decline in NFT sales, the market is full of exciting new projects. It’s no longer surprising to hear about celebrities releasing NFT. Paris Hilton, Eminem, Jack Dorsey and others have proven that blockchain technology is a beneficial sales tool. Most recently, one of the 10 most trafficked male artists on Spotify (Ozuna) teamed up with one of the best-selling French contemporary artists (Richard Orlinski) to launch an NFT collection. rarible players have the opportunity to purchase one of these pieces for $250 each.
Finally, news organizations are also beginning to test the waters of NFTs. the Associated Press, for example, is planning to auction off 10 unique NFTs to celebrate its iconic photojournalism. Until then, the New York Times’ Kevin Luce tokenized an image of an op-ed he wrote and sold it for $560,000. Online news site Quartz sold NFT news articles for 1 Ether, and CYBR Magazine is planning to release an entire issue of NFT with plans to launch it on Rarible.
Judging by recent trends, the NFT concept is spreading rapidly. While most NFT collections are still relatively small, we can expect much larger ones in the near future.
Overall, the blockchain industry continues to evolve in two ways: through the DeFi ecosystem and the NFT marketplace. the DeFi ecosystem is adopting a multi-chain model. We are seeing dapps expand across multiple chains to appeal to different users. This could be the key to long-term success.
In addition, the DeFi ecosystem appears to be more resilient to a collapse than it was in 2020. Even though the crash affected key metrics like TVL and the only active wallet, the drop in price is a huge win for DeFi. Even under the extreme stress of a crypto crash, decentralized applications on the blockchain work as designed. In particular, the DeFi ecosystem on ethereum passed the test.
Finally, there are contradictions within the NFT market. Sales have fallen for two consecutive months. However, some dapps, such as Axie Infinity, R-Planet and Dark Country, experienced their best month of the year. These dapps are not based on $1,000 sales, but run on NFT sales between $10 and $300. We can consider these cheaper NFTs. these sales are important for long term growth as they create a greater opportunity to attract the masses into the industry.
Uniswap V3 processed $17.3 billion in the first month
Almost 10% of the transaction volume occurred on May 19
In its first 30 days, Uniswap V3 processed over $1,736 billion in transactions in over 288,130 user wallets. May 19 was the busiest day to date, with $1.4 billion in transactions according to the Uniswap V3 dapp page.
May 8 saw the highest number of user wallets connecting to the token exchange platform, with 35,100 active user wallets registered. After the peak, user activity started to decrease and stabilized at 12,000 active wallets per day. In the first month, Uniswap V3 users made an average of 2,1 transactions on each connected wallet.
Obviously, Uniswap V3 has not replaced its predecessor’s favorable position. Uniswap V2 still attracts about 50,000 wallets per day. In the last 30 days alone, more than 659,880 wallets have traded on Uniswap, with an average of 7,4 transactions per wallet.
Because Uniswap is an on-chain system, users can still use older versions of the platform. Even the first version of Uniswap is still in use. According to DappRadar, the original version of Uniswap still served 681 users and spent a total of $12.92 million in the last 30 days.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/who-really-performed-best-in-may-is-it-defi-or-nft/
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