DappRadar’s third quarter industry report, which cites on-chain metrics, suggests that cryptocurrency markets are beginning to recover from the ongoing bear market conditions.
Many factors contributed to a busy third-quarter of 2022. Ethereum’s Merge marked a successful shift from proof-of-stake and had a significant impact on layer-2 activity prior to the event. The report highlights a slight improvement in cryptocurrency market capitalization. However, it still remains below $1 trillion.
The total crypto market cap increased 8.5% between July and September 2022, according to third-quarter data. There were also signs of consolidation in the decentralized finance sector, with $69 billion in total value locked (TVL), increasing 2.9% in the third-quarter. Ethereum still accounts for most TVL with $48 billion in smart contracts.
DappRadar also highlighted a 12% rise in the number of active wallets within the cryptocurrency ecosystem quarter on quarter, adding up to 1.8million. Blockchain gaming was a major contributor, with unique wallet addresses rising by 8% between August and September.
ImmutableX’s unique active wallets grew by 30% in the same period. It also recorded an 87% increase in nonfungible tokenNFT trade volume from the prior quarter. Polygon saw a similar trajectory and saw its unique active pockets grow by 17% to 148,000.
While the number of trades in nonfungible tokens (NFTs) increased by 11% over the second quarter 2022, Ethereum’s NFT trading volume fell by a significant 76%. NFT trading volume was $2.71 billion in the third quarter of 2022, which is still a 67% decrease from Q2 2022.
Similar: Blockchain enthusiasts surge as users try’stacking cryptocurrency’ — DappRadar
Yuga Labs’ NFT projects were the dominant market players in September. Otherside, Bored Ape Yacht Club (Bored Ape Yacht Club), Mutant Ape Yacht Club (Mutant Ape Yacht Club) and CryptoPunks accounted for 46.21% of total NFT market capital.
Another example of the theft of cryptocurrency assets was highlighted, with some blockchain bridges still being targeted. DappRadar identified the $190 million Nomad exploit from August as a major contributor to the $461million worth of crypto assets that were stolen in Q3. Algorithmic market maker Wintermute was also victim to the $160 million exploit.
DappRadar also highlights the impact of macroeconomic factors on global economies. Central banks are trying to control inflation in order to avoid recessionary effects by increasing interest rates.
“Current macroeconomic circumstances significantly impact the crypto market. It is impossible to predict a worldwide expansion without a general recovery of conventional financial markets.”
This somewhat bleak outlook was offset by positive events in the third quarter 2022. The approval by the European Union of the Markets in Crypto-Assets regulatory program shows that governments are keen to manage the sector.
In a similar vein, the White House published in September 2022 the “First-Ever Comprehensive Framework for Responsible Development of Digital Assets”. This was in an effort to protect investors. It is clear that cryptocurrencies are a well-established industry.
Eileen Wilson –Technology and Energy
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