Cryptocurrency airdrops boost Web3 wallet usage as blockchain gaming and DeFi growth slows: report

The number of unique active crypto wallets surpassed 10 million from April to June, according to a report from an NFT marketplace. The report describes Web3’s performance in the second quarter of this year. In Q2 2024, the crypto wallet user base grew by 40% compared to the March quarter. According to DappRadar, the trend of cryptocurrency airdrops is one of the main reasons that are rapidly adding more and more crypto wallets to the ecosystem.

Cryptocurrency airdrops lead to surge in Web3 wallet creation

In his report Regarding the current trends in the Web3 sector, DappRadar mentioned that “airdrop farming” is attracting more and more people to create crypto wallets and collect free promotional or reward crypto tokens.

Airdrop farming refers to the process by which cryptocurrency researchers identify Web3 projects that announce token airdrops and participate in their games or contests to accumulate crypto tokens in their wallets.

Before crypto projects take this statistical information and organize Airdrop giveaways, DappRadar pointed out that this trend is not here to stay for long, especially due to multiple cases of fraudulent “crypto giveaway” postings that have caused people financial losses.

“The current trend of airdrop farming has led to an increase in the number of unique active wallets (UAWs), but this increase may not be sustainable in the short term,” the company said in its report. “To ensure long-term user retention post-airdrop, it is essential to focus on delivering a superior user experience, robust roadmaps, and strong development teams.”

Interest in dApps is growing

Social media and networking dApps grew 66% in the second quarter of this year, and interest continues to rise. The number of unique active wallets related to social media Decentralized applications surpassed 1.9 million between April and June, according to DappRadar.

With the creation of new crypto wallets, the decentralized applications (dApps) sector also managed to register notable growth in the second quarter of this year. Built and supported on blockchain networks instead of traditional Web2 servers, decentralized applications are open-source software programs that are not controlled by a single person or company – but rather by their collective user bases.

Social media dApps have emerged at the top of the list of industries benefiting from people’s growing interest in dApps. Compared to Web2 platforms, dApps offer people more control over their content and monetization while keeping the threat of censorship at bay.

Declining interest in DeFi and blockchain gaming

The growth of Decentralized Finance (DeFi) has declined by four percent in recent months, due to continued volatility in the cryptocurrency market. With the hype surrounding cryptocurrencies AND FCountries announcing regulations governing crypto businesses and government changes: The cryptocurrency market has been on a downward trajectory. Multiple hacks, scams, and legal wrangles between crypto businesses and international authorities have also affected the sector.

“In Q2 2024, the total value locked (TVL) of the DeFi sector witnessed a decline from $175 billion (approximately Rs. 14,61,346 crore) in Q1 to $168 billion (approximately Rs. 14,02,892 crore) at the end of Q2,” the report said.

Blockchain Games also experienced a similar situation, despite being among the top dApp categories in the world. Between April and June, the share of blockchain games in the dApp category fell by 2%.

Many are associated with Web3 through games and NFT Investors are afraid of losing their investments due to scams or hacks, which prevents them from freely engaging in these technologies. Thanks to hacks on Web3 platforms such as Gala Games, Lykke Exchange, and Holograph, hackers managed to steal $430 million in Q2 2024. However, the report estimates that the number of such incidents could be reduced due to the continuous developments taking place in the blockchain sector.

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