Crypto Airdrops Spur Use of Web3 Wallets as Blockchain Gaming, DeFi Growth Slows: Report

The number of unique active crypto wallets surpassed t 10 million from April to June, according to a report by an NFT marketplace. The report outlines the performance of Web3 in the second quarter of this year. In Q2 2024, the user base of crypto wallets rose by 40 percent, compared to the March quarter. As per DappRadar, the trend of crypto airdrops is among top reasons that are rapidly adding more crypto wallets to the ecosystem.

Crypto airdrops lead to increase in Web3 wallet creation

In its report on current trends in the Web3 sector, DappRadar has mentioned that ‘airdrop farming’ is attracting more people to create crypto wallets and collect promotional or reward crypto tokens for free.

Airdrop farming refers to the process of crypto seekers identifying Web3 projects that are announcing token airdrops and participating in their games or contests to accumulate crypto tokens in their wallets.

Before crypto projects take this statistical information and run airdrop giveaways, DappRadar has highlighted that this trend is not here to stay for long, especially because of multiple instances of scam ‘crypto giveaway’ posts that have caused people financial losses.

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

Interest in dApps increases

dApps related to social media and networking jumped by 66 percent in the second quarter of this year, and interest continues to rise. The number of unique active wallets linked to social dApps has crossed 1.9 million between April and June, as per DappRadar.

With the creation of newer crypto wallets, the sector of decentralised apps (dApps) has also managed to register notable growth in the second quarter of this year. Built and supported on blockchain networks instead of traditional Web2 servers, decentralised apps are open source software programmes that are not controlled by a single person or company – rather, they are governed by their collective userbases.

The dApps around social networking have emerged on the top of the list of sectors benefitting from the rising interest from people in dApps. As compared to Web2 platforms, dApps offers more control to people over their content and monetisation while also keeping the threat of censorship at bay.

Lower interest in DeFi, blockchain gaming

The growth of decentralised finance (DeFi) declined by four percent in recent months, owing to the persistent volatility looming over the crypto market. With the hype around crypto ETFs, countries announcing regulations governing crypto firms, and changes in governments – the crypto market has seen a downward trajectory. Multiple hacks, scams, and legal tussles of crypto firms with international authorities have also affected the sector.

“In Q2 2024, the DeFi sector’s total value locked (TVL) saw a decline, dropping from $175 billion (roughly Rs. 14,61,346 crore) in Q1 to $168 billion (roughly Rs. 14,02,892 crore) by the end of Q2,” the report states.

Blockchain gaming has also seen a similar situation, despite being among the top categories of dApps worldwide. Between April and June, the share of blockchain gaming in the dApps category has dropped by two percent.

Many associated to Web3 through games and NFTs fear losing their investments to scams or hacks, which keeps them at a hand’s distance from engaging freely with these technologies. From hacks on Web3 platforms like Gala Games, Lykke exchange, and Holograph – hackers managed to steal $430 million in Q2 2024. The report, however, estimates that the number of these incidents could take a hit with continuous developments happening in the blockchain sector.