DappRadar report shows NFT and DeFi revival amid Bitcoin spotlight

DappRadar noted BTC took the spotlight, but app building and activity continued. NFT are also taking on new roles, linked to tokenization and DeFi. 

DappRadar noted apps were highly active in Q3, despite BTC taking the spotlight. In the latest quarterly report, DappRadar noted new trends emerging, especially tokenization, a return of NFT, and DeFi making new records of value locked. 

In Q3, decentralized apps drew in 18.7M active wallets per day, down 22.4% from the previous quarter. Gaming apps made up 25% of all activity, up from 20.1% for the previous quarter. However, DappRadar warned only a few decentralized games are purely about play, and most have some form of DeFi mechanics. 

NFT followed with 18.5% share of apps, while DeFi had a 17.9% share. More specific use cases, such as SocialFi and AI, lost momentum, resulting in only a small increase in overall activity. 

DappRadar notes AI, SocialFi took a hit

While some app categories were surprisingly healthy, the slowdown in the AI agent space was one of the major reasons for the activity downturn. Virtuals Protocol changed its relevance from Q2, when it attracted 10K active wallets daily and rapid AI agent minting. In Q3, the platform carried 1,000 to 1,500 wallets daily, making up $100K in daily value transfers. 

The new wave of SocialFi apps like The Arena, Layer3 and OnchainGm  lost 50% of their activity, down to 1.57M in daily active wallets. 

Overall, apps are redistributing their activity, with utility apps still at the peak, as in the case of the Kai-Ching payment platform. 

NFT sale activity returns to 2022 levels

App teams are retesting the NFT model, increasing the number of transfers and trades. In Q3, apps sold 18.1M NFT, up from 12.5M in the second quarter. In Q3, NFT activity generated $1.6B in trading volumes through apps. 

Some of the NFT activity is niche, and has not brought back mass adoption. Additionally, the items bought and sold go at much lower prices, as a fun activity rather than a life-changing investment. 

Still, 2.14M wallets interacted with NFT, each holding on average over 8 items. The number of interacting wallets grew by 28% quarter-on-quarter, while sales grew by 158%. The type of NFT traded also changed, as game-based items were less active. Interest shifted to Sorare items, mostly linked to sports and sports celebrities. 

Some of the activity with NFT is linked to OpenSea incentives for an eventual native token airdrop. Older blue-chip avatar collections also changed hands, with a special focus on the Pudgy Penguins collection. 

OpenSea increased its activity by 88% in Q3, while Blur grew its activity by 178% against the previous quarter. Moonbirds turned into one of the hottest collections after Yuga Labs divested some of its assets and sold them to the Orange Cap Games team. Moonbirds may soon have its native Solana token, BIRB, as the team announced plans in early October. 

The Moonbirds shift to a tokenized collection follows the general trend of integrating NFT into DeFi protocols. NFT are being used for tokenization, creating digital identities and copies for physical collections. The CryptoPunks collection is also used for its underlying value in minting and burning PUNKSTR tokens. Holding PUNKSTR is a proxy for the price of Punks NFT, without the need to hold the assets.

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