DeFi dapps showed a mild recovery for the first time since May, with daily average active unique wallets (UAWs) rising 3.7% on a month-on-month basis, according to a report from DappRadar.
The increase was partially driven by the Flow protocol, which increased 577% in the UAW due to Instagram’s support of their NFTs and the Solitaire Blitz game. Secondly, Solana UAWs dropped 53% in August from the previous month, while transactions fell 68%, according to the results.
There were 1.67 million unique wallets connected to blockchain dapps in August, 3.52% less than last month, and 14.73% less than in August 2021.
Among industries, video games accounted for more than 50% of activity use, with 847,230 UAW daily, although it is down 11% and the number of transactions decreased 12.7% month on month, to USD 698 million. On the NFT side, UAWs fell 16.7% to 114,542, the lowest since June 2021, according to the report.
Despite the rise of unique wallets active in DeFi, DeFi’s overall Total Value Locked (TVL) still showed a significant drop; from USD 250 billion in early 2022 to USD 74.21 billion in August.
“The last time the TVL was this low was in April 2021, when the space was just beginning to pick up steam. This indicates that the DeFi TVL is down 56% or more since August 2021.”
The report highlighted that August was “particularly difficult for the market due to the Tornado Cash crisis”, which caused the industry’s TVL to fall by 10.47% to lose USD 8.7 billion. On August 8, the US Treasury Department accused the cryptocurrency mixing platform of laundering more than $7 billion in cryptocurrency, including $455 million allegedly stolen by North Korean hackers.
Following the sanctions, the price of Tornado Cash (TORN) plummeted 45% in two days, losing almost half of its market value.
The Ethereum network controls 69% of DeFi’s TVL, worth $51.47 billion, according to the report, though it has lost 11% last month and is down 56.63% since August 2021. Ethereum-based layer 2 protocols showed signs of growth “mainly driven by the upcoming Ethereum merger”, with Optimism rising 57.61% in August for a total value locked of $1 billion, Arbitrum rising 14.36%, and Polygon gaining 6.50% month over month.
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