NFT Trading Volume Surges 137% in 1Q23
According to a quarterly report released by evaluation firm DappRadar, there was a 9.7% decrease in the number of distinct active blockchain wallets during the first quarter as compared to the previous fourth quarter. According to DappRadar, the Web3 industry is still being dominated by blockchain gaming, with an average of 791,474 daily Unique Active Wallets (dUAW) in Q1. However, this represents a decrease of 8.58% from the previous quarter. In the latest industry report, it has been revealed that gaming has secured a significant 45.6% share of the market. This data highlights the growing popularity of gaming and its increasing dominance in the industry.
In the first quarter of 2023, Non-fungible tokens (NFTs) experienced a significant surge in trading volume, reaching $4.7 billion, which is the highest it has been since the second quarter of 2022. This represents a remarkable 137.04% increase in trading volume. In March, there was a significant decline in monthly transaction volume and sales. Trading volume dropped by 15.65% to $1.7 billion, while monthly sales decreased by 4.63% to 2.7 million.
In the first quarter of the year, the decentralized app (dapp) industry witnessed a mix of positive and negative developments, characterized by variations in on-chain metrics and market trends. According to DappRadar, the crypto space is displaying resilience and adaptability, leading to an optimistic overall sentiment.
During the first quarter, the highly anticipated Arbitrum airdrop caused a stir in the world of decentralized finance (DeFi), becoming a major driving force behind the hype. Traders were captivated by the event, which garnered significant attention. On March 11, the DeFi market suffered a significant setback after the Silicon Valley Bank crash and the subsequent USDC (USD Coin) depegging. The total value locked in a smart contract (TVL) plummeted by 9.6%, dropping from $79.28 billion to $71.61 billion. Investors were thrown into a state of panic, resulting in a significant sell-off.
On March 13, the federal government intervened and made USDC reserve deposits held at Silicon Valley Bank accessible to the public, thereby aiding in market stabilisation. In breaking news, the recent announcement has caused a significant surge in DeFi TVL, with a staggering 13% increase, bringing the total value locked to an impressive $81.15 billion. This news has not only boosted the market but has also helped to restore trust in the industry, demonstrating its resilience throughout the entire process.
The need for stablecoin regulations has been brought to the forefront of discussions following the collapse of Silicon Valley Bank (SVB). In recent news, stablecoins have been making waves in the digital currency world. These unique forms of currency are backed by a reserve asset, with the US dollar being the most common choice. The purpose of stablecoins is to ensure a consistent and stable value, making them an attractive option for those who are wary of the volatility often associated with other cryptocurrencies. Circle Financial’s USD Coin (USDC) has emerged as a top contender in the stablecoin market, which is valued at over $100 billion. Circle’s stablecoin experienced a three-day period of trading below its $1 peg, dropping to as low as 88 cents, after SVB’s failure was disclosed and Circle revealed its $3.3 billion in deposits at the now-closed bank.
The need for a set of regulations in the stablecoin market has been emphasized by the recent incident. Circle, a stablecoin issuer, reportedly held $11 billion in uninsured bank accounts, raising concerns about the safety of its collateral. Despite claiming to maintain a 1-to-1 collateral for every digital dollar issued, Circle’s reliance on uninsured bank accounts has cast doubt on the security of its stablecoins. In a recent development, Tether has made a public admission that its stablecoin reserves, amounting to billions of dollars, are invested in a diverse range of assets including corporate bonds, secured loans, precious metals, and other cryptocurrencies.
In response to the SVB fallout, regulators have acted swiftly. In a recent statement, Securities and Exchange Commission Chairman Gary Gensler has declared that the majority of cryptocurrencies, excluding bitcoin, should be classified as securities. According to sources, stablecoins that are backed by assets other than the currency they are pegged to may be considered similar to money market funds. As such, they could fall under the regulatory purview of the SEC, which oversees investment companies under the Investment Company Act of 1940.
In a recent statement, Representative French Hill (R-Ark.) emphasized the need for legislation to bring clarity to the categorization of digital assets for functional regulation. As the Chair of the House Subcommittee on Digital Assets, Financial Technology, and Inclusion, Hill believes that such legislation is necessary to ensure that digital assets are properly regulated. Recent events have highlighted the pressing need for a regulatory framework for cryptocurrency.
According to DappRadar, despite facing several challenges, the general sentiment in the cryptocurrency market remains optimistic and bullish. In the first quarter of 2023, the blockchain ecosystem has showcased its resilience and adaptability, as per the on-chain metrics and market trends. The future seems promising for the blockchain industry.
In March, the daily unique active wallets interacting with gaming dapps on-chain decreased by 3.33% from the previous month, with a total of 741,567. In the latest quarterly report, it has been revealed that there was a decline of 8.58% in comparison to the previous quarter. On average, 865,783 dUAW were connected during the period under review. Despite the seemingly underwhelming numbers, it is crucial to acknowledge that the industry remains in its infancy and is constantly developing.
Blockchain gaming has exhibited a promising upswing in Q1 2023, as per the latest report. The industry’s dominance has surged from 42.87% in Q4 of 2022 to 45.60% in Q1 of 2023, indicating a bullish trend. Despite the decline in dUAW figures, blockchain gaming has emerged as a more significant component of the Web3 ecosystem.
DappRadar and the Blockchain Gaming Association (BGA) have announced the upcoming launch of their quarterly gaming report, set to be released on April 6. In Q1 2023, the blockchain gaming industry’s performance will be thoroughly analyzed in a comprehensive report. In the upcoming report, we will present comprehensive data on the current state of the industry, including the number of active wallets, transaction volume, and growth updates. Stay tuned for more information.
According to DappRadar, Alien Worlds has secured the top spot as the most popular blockchain game in terms of active user wallet transactions.
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