DeFi And Web3 Gaming Dominate Q1: Record Transactions Leave Stablecoins In The Dust, Report
April 17 2024 - 8:00PM
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In a recent report published by QuickNode, the first quarter of
2024 showed the dominance of decentralized finance (DeFi) and the
notable growth of Web3 gaming in the crypto industry, which
outperformed the stablecoin sector in key metrics, indicating
investor preference and market sentiment during this period.
Hopes For Second ‘DeFi Summer’ Per the report, DeFi
experienced a significant resurgence in Q1’24, fueled by a surge in
developer and user activity, particularly on chains like Solana
(SOL) and Base. This resurgence has sparked growing hopes of
a second ‘DeFi Summer,’ as DeFi projects embrace new concepts such
as staking, liquid staking, restaking, and liquid restaking, which
have been catalysts for its growth. Notably, staking now represents
a substantial portion of DeFi’s Total Value Locked (TVL). While
stablecoins remain the top spot for address activity, DeFi
surpassed stablecoins in an essential metric: transaction
counts. Related Reading: Crypto Analyst Says Don’t Buy
Altcoins Just Yet – Here’s Why DeFi emerged as the leader in
transactions for Q1’24, averaging nearly 7 million daily
transactions. Furthermore, DeFi led in fees spent, gas usage, and
the overall number of projects despite comprising only
approximately 4% of the total crypto market cap. The TVL for
yield-generating protocols within DeFi witnessed steady growth,
climbing from $26.5 billion in Q3’23 to $59.7 billion in Q1’24.
According to QuickNode, this rally signifies a return of confidence
and liquidity to the DeFi markets as investors seek opportunities
for yield generation. Players Take Control With Web3 Gaming In
parallel, Web3-based gaming has emerged as a significant departure
from conventional gaming platforms. By leveraging cryptocurrencies
and non-fungible tokens (NFTs), Web3 gaming offers players new and
decentralized gaming. Players now have the opportunity to
actively participate in games and earn rewards, shifting control
away from centralized entities within the gaming ecosystem. The
report highlights the growth of Web3 gaming, surpassing stablecoins
in transaction volume and achieving the highest year-over-year
(YoY) active address growth across all categories, with a 155%
increase in active addresses during Q1 ’24. This surge in
player engagement and participation is evident through the
exponential growth of transactions within Web3 gaming, which
experienced a staggering 370% YoY increase. The Appeal Of
Stablecoins Although stablecoins continue to lead in daily active
users, representing over 41% of all Web3 user activity, other
categories have shown higher quarter-over-quarter (QoQ) activity
growth, indicating potential catch-up. Tether’s USDT remains
the dominant stablecoin, controlling approximately 75% of the
market cap. Notably, Circle’s USDC has taken the lead in volume and
average transaction size, partly due to Coinbase’s efforts to
integrate USDC on its platform and promote its use on its Layer 2
network, Base. Related Reading: Crypto Exchanges Bitcoin Supply Can
Only Last For 9 Months, ByBit Report In addition, the report notes
that stablecoins have proven attractive to both new and experienced
users, offering stability and value predictability, especially
during periods of market uncertainty. QuickNode attributes the
surge in stablecoin user activity in Q1’24 to several factors,
including the approval and listing of spot Bitcoin ETFs in the US,
the anticipation of Bitcoin’s next Halving event, the devaluation
of fiat currencies, the popularity of low-volatility assets, and
the strength of the USD, to which over 90% of stablecoin
transactions are anchored. Featured image from Shutterstock, chart
from TradingView.com
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