How Crypto Performed In 2022

AuthorAuthor

Mark Kennedy & Manuel Olumorin
December 23, 2022

GM. This is the last Lootbox for 2022, so we are wrapping it up with a banger!

LFG!

  • How crypto performed in 2022 according to DappRadar

  • The Sneakies

Dapp Radar Industry Report

Dapp Radar released the Dapp Industry Report 2022, providing an in-depth look at the crypto industry over the past year. We got you the TLDR that is still long enough for you to get the details.

To get this started, let's play a game. Up or down?

  • Dapp usage 🔺: There was a 50% increase in average daily unique active wallets (DUAW) in 2022 compared to 2021, rising from an average of 1.58 million daily DUAW in 2021 to 2.37 million in 2022 on average.

  • NFT trading volume 🔺: NFT trading volume in 2022 increased by just 0.41% compared with 2021, with an average ETH price of $2,015.

  • Unique trader's count 🔺: This increased by 876.89% compared to 2021, reaching 10.6 million.

  • Sales count 🔺: Sales count is on the same upward trend, with an overall 10.16% increase this year, reaching 68.35 million.

What did this report say about Web3 games and the broader crypto environment? Let's get into it.

1/ More wallets are interacting with blockchains

This year was rough for the crypto markets, with several major events causing pressure on financial performance. These effects also affected the usage of blockchains over the course of the year as we saw declines in daily unique active wallets (DAUW).

Despite this, the average daily unique users grew by about 50% compared to 2021. despite the macroeconomic and major event headwinds.

2/ Gaming is the most prominent use case for blockchains

This year is the year of Gaming!

In 2021 DeFi was the leading use of blockchains. This year, it has been overtaken by gaming, with 49% of wallet activity attributed to gaming. Not only that, gaming has grown by 85% to 1.15 million unique active wallets.

Looking deeper, the game that saw the most usage was Splinterlands. It had 217,914 average monthly unique active wallets (MUAW) in 2022, an 85.78% growth compared to 2021.

What's exciting is that gaming will be more significant in 2023, with more money pouring into the ecosystem and more fun experiences being created.

3/ BNB chain is still the most popular

BNB chain retained its crown as the most popular protocol with 599K DUAW interacting with it on average. Solana, Harmony and Fuse saw huge growth in their ecosystems.

But as we know, things change quickly in crypto. Hacks and FTX dealt a blow to some of these fast-growing chains. Check out the change in Q4.

Solana dropped 70% compared to Q1 2022, and Harmony is entirely out of the top 10.

4/ WAX leads on transactions

The chain dedicated to NFTs and Web3 gaming, WAX, led by a massive margin in the number of transactions. Solana came up next although with negligible growth in total transactions.

When we look at the transactions by categories, it is no surprise why WAX is top. Gaming is once again the story.

5/ More developers are building

DappRadar usually collects applications from developers to get their dapps approved to be added to DappRadar's app. So we can safely use this as a proxy for developer activity.

This year, they saw a record number of applications submitted. That came up to a total of 8,255 dapps. So what categories of dapps are being built?

Clearly, DeFi apps are still leading in the share of dapps being created and approved by DappRadar.

6/ The biggest exploits, hacks and scams

Terra Luna took the lead on the biggest failure. It's hard to beat a $40B exploit. Lootbringer suffered on this one too 😢. Then the other 2 musketeers (Genesis and Celcius) and the night king (FTX).

As for gaming, that crown goes to the Sky Mavis team, with the Ronin hack coming in at $630M.

7/ OpenSea is more dominant despite more competition

2022 saw the rise of NFT marketplaces following the explosion of NFTs in 2021. We saw new players like LooksRare, X2Y2, GameStop, SudoSwap and more get into the NFT game to mount a challenge on OpenSea. Yet Opensea grew its dominance.

8/ NFT trends for 2023

As NFTs have gained significant attention, we can expect them to continue to play a major role in the industry. Yahoo suggests the NFT market could reach $82.43 billion by the end of 2026 at a CAGR of 40.2%.

So what can we expect in 2023?

  • Utility NFTs: In-game NFTs, identity tokens, token-gated communities, software and events would see significant growth.

  • Soulbound NFTs: NFTs that cannot be traded will continue to be adopted. Gaming is one place we could see significant growth in its usage for digital assets such as achievement badges.

  • Continued adoption by traditional companies: We have seen Tiffany's, Nike, and Starbucks get into the NFT game. As companies continue to explore NFTs, more will launch. Loyalty programs would probably be the most significant play for this.

As people continue to experiment with NFTs, expect unforeseen use cases to come up to the forefront.

9/ Regulation reflects the importance of blockchain tech

Crypto has been known as the Wild Wild West (WWW). While in the beginning no one cares about the WWW, people do when it has grown to be impactful. Crypto is at the stage where it is meaningful and therefore requires being regulated. This has meant several regulations have come in 2022 and more to come in 2023.

If history has anything to teach us, it's that when well-thought-out regulation comes to an industry, it creates an environment for growth. More players with deeper pockets have clarity about the rules and can participate, while the smaller folks are protected from some of the blatant harm.

If you are curious and want to dive into the report, find it here.

The Sneakies

Before you go...

We have 3 things to share with you.

First, thank you for being part of our journey so far. It has been a fun ride getting this newsletter to you three times a week.

Second, the Christmas Lootbox is now closed. Winners of the Christmas Lootbox will be contacted in a separate email.

Finally, we want to continue to improve this newsletter. Please reply to this email to tell us what you want to see more of in 2023. We are excited to continue to bring you the best of Web3 gaming in 2023.

Happy holidays 🎄.

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