Author: Sara Gherghelas, Dapp Radar; Compiled by: Tong Deng, Jinse Finance

Daily Dapp users reach 24.6 million, with 32% participating in DeFi, which is the industry's main focus this year

2024 is a transformative year for the dapp industry, ultimately pushing us to the edge of mainstream adoption. This year marks significant progress in regulation, with the EU's MiCA laying a solid foundation, and Trump's election in the US laying the groundwork for a new wave of institutional interest. The historic high of Bitcoin signaled the start of the long-awaited bull market, injecting new vitality into the crypto space.

Across the board, DeFi has stolen the spotlight, becoming the most active category. Driving this trend is not only the innovation in DeFi - the narrative of memecoins defined much of 2024 and provided an additional boost to DeFi. Meanwhile, NFT trading volume and sales were among the weakest since 2020. Perhaps 2024 will make us realize that NFTs don't need to be expensive to prove their importance in the broader Web3 ecosystem.

2024 is a year of laying the groundwork for the future. Looking ahead to 2025, we hope the industry can continue to mature. In the meantime, dive into this report to understand all the exciting developments, breakthroughs, and narratives that have shaped the past year.

Executive Summary

• In 2024, the dapp industry saw a 485% growth in unique active wallets (UAW), reaching an average of 24.6 million daily UAW by the end of the year.

• The "Other" category, driven by AI dapps, saw a 2,269% increase in activity, highlighting the growing importance of AI in the dapp ecosystem.

• DeFi activity grew by 532%, with 7 million daily UAW by the end of the year, and occupied 32% of the market share in Q4 2024.

• New chains like opBNB, Matchain, and Base made significant progress, with opBNB becoming the most used chain with 3.88 million dUAW in 2024.

• DappRadar approved 5,138 new dapps in 2024, a 72% increase from 2023, with gaming and DeFi being the main categories.

• In 2024, DeFi's total value locked (TVL) grew by 211% to $214 billion, just 20% below its December 2021 peak.

• New chains like Sui, Base, and Aptos gained attention, but Solana stood out, with its TVL growing by 2,000% to become the second-largest TVL chain after Ethereum.

• Compared to 2023, NFT trading volume decreased by 19% and sales volume decreased by 18%, making 2024 one of the weakest years since 2020.

• Blur maintained its dominance in the NFT market, occupying the largest market share for most of 2024 due to its airdrop activities and zero-fee trading model.

• In 2024, the dapp industry suffered $130 million in losses from hacks and exploits, a 31% decrease from the previous year, the lowest since 2020.

Table of Contents

• Industry-Wide Expansion: A Record-Breaking Year for UAW Growth

• DeFi Nearing Historic Highs: $214 Billion TVL in 2024

• The Weakest NFT Market Performance Since 2020

• A Year of Reduced Losses but Persistent Threats

• Conclusion

1. Industry-Wide Expansion: A Record-Breaking Year for UAW Growth

In 2024, the dapp industry experienced remarkable growth, with unique active wallets (UAW) increasing by 485%. By the end of the year, this surge meant a daily average of 24.6 million UAW.

The most significant growth occurred in the "Other" category, with activity increasing by 2,269%. This surge can be attributed to the rise of AI dapps, leading DappRadar to introduce a dedicated AI dapp ranking. Initially, the "Other" category was a catch-all for emerging or ill-defined dapps, including early AI solutions. Over time, AI dapps gained substantial traction, showcasing their transformative potential and prompting them to become a standalone category.

DeFi came in second with a 532% increase in activity, becoming the dominant category by the end of the year with 7 million daily UAW and a 32% market share in Q4 2024. This was driven by the narratives around memecoins and AI agent coins, which generated a lot of buzz throughout the year.

Meanwhile, blockchain games grew by 421% to take the third spot. Although DeFi's dominance fluctuated between 26-29% throughout the year, it outshone gaming in Q1 and Q4 2024.

Propelled by airdrop narratives, the NFT industry grew by 412%, while the still-emerging social category saw a 70% increase in activity. Although the growth was modest, social dapps may gain more attention in 2025.

Transaction analysis reveals a different picture. Social dapps saw the highest growth in transaction volume, increasing by 455%, mainly driven by task platforms where users must complete on-chain or off-chain tasks to earn rewards. Game transaction volume declined by 16% since the start of the month, but still exceeded 50 million transactions this year. This shift may indicate that games are moving more towards off-chain rather than on-chain.

DeFi's transaction volume surpassed 80 million this year, a 66% increase from the previous year, and accounted for 54% of the total transaction volume. This is consistent with the trends we observed - meme transactions, the launch of new chains with on-chain reward promises, and a significant uptick in transaction activity in the previous quarter as rumors of a new bull market began to gain traction.

Blockchain Performance: Emerging Stars and Top Chains of 2024

Among these chains, opBNB became the most used chain, leveraging Optimistic Rollup technology to enhance scalability and reduce transaction costs. Particle Network is the leading dapp on this chain.

The newcomers Matchain and Base also saw success. Matchain's LOL dapp became its best performer, rising in the rankings, while Base set a new record with $15.65 billion in Uniswap V3 trading volume within 30 days.

While the largest blockchains always grab the headlines, we also saw significant growth in smaller ecosystems. The list above highlights the six blockchains with the largest increases in average daily unique active wallets. This list includes Oasys, Internet Computer, Core, WEMIX 3.0, and SKALE. Dapps such as the video game application ChainArena on Oasys, the social email platform Dmail Network on ICP, and the gaming platform Pixudi on Core contributed to this diverse growth across these ecosystems.

Defining the DappRadar Metrics of 2024

However, as DappRadar aims to become the global Dapp Store, we decided to look at some metrics to see what the trends were this year and what we might see next year. DappRadar approved 5,138 dapps through its developer dashboard in 2024, a 72% increase from 2023, consistent with the fact that we've seen more dapps entering the mainstream this year. Games accounted for 31.1% of these, followed by DeFi at 18.7%, highlighting their dominance as the main trends of the year.

According to the page views on DappRadar, the top-ranked dapps in 2024 will mainly be games. Their continued presence in the rankings highlights the strength and engagement of their communities.

2. DeFi Approaches Historic Highs: TVL Reaches $214 Billion in 2024

This year, the DeFi sector has become the cornerstone of the dapp industry, as emphasized in the first chapter. DeFi has performed exceptionally well, with the Total Value Locked (TVL) growing by 211% to reach $214 billion by the end of 2024, just $47 billion less than the peak in December 2021.

Several key factors contributed to the significant success of DeFi this year. First, the hype around Memecoins played an important role. The rise of Memecoins like GOAT and PEPE led to a surge in trading activity and liquidity on DeFi platforms, attracting traders and speculators.

In the second half of the year, the introduction of AI-driven agents brought a transformative layer to the ecosystem. These AI-powered agents facilitated tasks such as trading and governance, streamlining operations and driving user engagement. This innovation is likely to be further explored and expanded in 2025, positioning AI as a core component of DeFi's development.

Finally, the Federal Reserve's interest rate cuts reignited interest in DeFi lending protocols. In the low-interest-rate environment, investors turned to platforms like Aave and Compound to earn higher returns, leading to a significant increase in lending activity.

Additionally, driven by major regulatory milestones, Bitcoin reached a new all-time high of $108,000 in mid-December 2024. In January, the U.S. Securities and Exchange Commission (SEC) approved several spot Bitcoin ETFs, including BlackRock's iShares Bitcoin Trust (IBIT). As of January 19, 2024, IBIT quickly became the first spot Bitcoin ETF to exceed $1 billion in trading volume. Building on this, the SEC subsequently approved a spot Ethereum ETF, with institutions like Fidelity also launching their own products.

Newer blockchains such as Sui, Base, and Aptos performed exceptionally well over the year, introducing multiple updates and becoming the focus of attention. However, Solana stole the show, rebounding strongly in the challenging 2023 and achieving a remarkable 2,000% growth in TVL, becoming the second-largest blockchain by TVL. This resurgence consolidated Solana's redemption arc and highlighted its resilience.

Many things happened in 2024. The DeFi industry firmly established its position as a force of financial transformation through innovation, institutional adoption, and regulatory progress.

Key Trends Impacting DeFi in 2024

• Memecoins: In 2024, Memecoins like GOAT, PEPE, and ShibaDoge reignited retail interest, driving liquidity and activity on DeFi platforms. These highly speculative tokens often serve as a gateway for users to initially explore DeFi.

• AI Agents: The rise of AI-driven agents has fundamentally transformed DeFi by automating complex operations such as yield farming, arbitrage, and governance voting. These agents improve efficiency, reduce human error, and allow users to optimize returns with minimal effort.

• Tokenization of Real-World Assets (RWA): DeFi continues to bridge traditional finance and decentralized systems, unlocking new liquidity and investment opportunities through the tokenization of assets like real estate and commodities.

• Layer2 Solutions: Optimism, zkSync, Arbitrum, and Base have gained greater traction by addressing scalability and reducing transaction costs.

• Bitcoin Layer2 Solutions: The evolution of the Bitcoin network has enabled the creation of Bitcoin-based dapps, expanding its functionality beyond just a store of value.

• Loyalty and Airdrop Economies: Projects are leveraging loyalty programs and airdrops to incentivize user participation, fostering community engagement and loyalty within the DeFi ecosystem.

• Sustainability: DeFi platforms have adopted eco-friendly protocols that align with ESG standards, attracting environmentally conscious investors.

• Cross-Chain Interoperability: Seamless cross-network transfers have expanded the functionality of DeFi. Interoperability solutions enable users to access various liquidity pools and decentralized services without being limited to a single chain.

Regulatory Developments and Institutional Participation

In 2024, the regulatory environment underwent significant changes, particularly in the U.S. and Europe, with frameworks like the EU's Crypto-Asset Markets (MiCA) regulation providing much-needed clarity. While these regulations brought challenges, they marked a crucial step towards industry maturation and wider adoption. Institutional interest surged, further diversifying DeFi through innovations in prediction markets, lending, and financial instruments.

The key impacts of MiCA on the crypto industry:

• Establishing clear rules for crypto businesses, ensuring legal certainty.

• Strengthening consumer protection through stablecoin regulations.

• Requiring crypto service providers to obtain licenses, enhancing security.

• Addressing market manipulation and insider trading issues, boosting trust.

• Promoting global regulatory coordination, paving the way for wider adoption.

As DeFi enters 2025, the industry is expected to stabilize, with clearer regulations, further integration of risk-weighted assets, and technological advancements like zero-knowledge proofs improving security and scalability. DeFi remains poised to redefine global finance, providing transparent, inclusive, and efficient services while connecting traditional and decentralized economies.

3. NFT Market Performance Hits New Lows Since 2020

The NFT market experienced volatile swings in 2024. Early in the year, trading volume spiked to around $5.3 billion in the first quarter, a 4% increase compared to Q1 2023. However, this momentum was short-lived, as trading volume dropped to $1.5 billion in the third quarter, before rebounding to $2.6 billion in the fourth quarter. Despite these fluctuations, a closer look at NFT sales reveals a different story: the number of sales was lower than in 2023, highlighting that NFTs were generally more expensive in 2024, in line with the rise in token prices, particularly ETH.

On an annual basis, NFT trading volume declined by 19% compared to 2023, and NFT sales decreased by 18%. This makes 2024 one of the worst-performing years for trading volume and sales since 2020.

Top NFT Collections: Shift in Dominance

In terms of trading volume, Pudgy Penguins has taken the lead, but its sales have declined by 44%. Interestingly, their floor price has increased by 114%, reflecting the impact of major efforts made in 2024. They have been launched as plush toys at major retailers such as Walmart, Walgreens, and Target in the US, as well as Selfridges and Argos in the UK. In May 2024, they collaborated with Mythical Games to develop a blockchain mobile game, aiming to blend their popular penguin characters with a high-quality gaming experience. In September 2024, Pudgy Penguins partnered with the Spanish football club CD Castellón, becoming the first PFP NFT to appear on a professional football team's jersey. This reinforced the notion that NFTs with real-world utility continue to perform well.

While Yuga Labs' series remains one of the largest in terms of trading volume, its dominance has declined, and its FP has been severely impacted. Despite the challenges, Yuga Labs has laid out plans for 2025, focusing on its immersive metaverse platform Otherside, and collaborating with PP Man to launch new projects. This commitment to innovation may shape their future trajectory.

Gaming Industry Dominates NFT Sales

In terms of sales volume, game-related NFTs clearly dominate. This trend reflects the increasing adoption of NFTs in the gaming industry, where NFTs enable players to truly own in-game assets and facilitate player-driven economies.

Platform Performance: Blur vs. OpenSea

In terms of platforms, Blur maintained its market dominance throughout 2024 (except for the third quarter). By the fourth quarter, Blur and OpenSea were on par in market share. Blur's success is attributed to its multiple airdrop campaigns and its zero-fee trading model, which have attracted cost-conscious traders.

OpenSea, on the other hand, had a challenging year. In August 2024, the U.S. Securities and Exchange Commission (SEC) issued a Wells notice to OpenSea, citing concerns about unregistered securities. Combined with market downturn and fierce competition, OpenSea announced a major layoff in November, reducing its workforce by 56%. The company is now focused on "OpenSea 2.0" to regain market share and revitalize its platform, hinting at a potential token launch.

Meanwhile, Magic Eden has outperformed OpenSea. Magic Eden initially focused on Solana, and later expanded to include Ethereum, Polygon, Bitcoin, and emerging networks like Base and Arbitrum. On December 10, 2024, Magic Eden launched its native ME token and conducted a $700 million airdrop to bolster its ecosystem.

Broader Ecosystem Trends and Future Outlook

The NFT ecosystem has seen diversification of use cases, gaining traction in real-world applications such as gaming, music, real estate, and ticketing. Environmental concerns have prompted platforms to adopt sustainable blockchain solutions, while Layer 2 scaling solutions like Polygon and zkSync have improved transaction efficiency and reduced costs. Regulatory pressure has highlighted the need for clearer compliance standards, signaling a maturing market.

Looking ahead, 2025 is expected to be a year of integration and innovation. Mainstream adoption may grow, driven by improved user experience, broader utility in areas like supply chain management and digital identity, and a stronger secondary market. Empowered by regulatory clarity, technological advancements like AI integration, and enhanced smart contracts, the NFT industry is poised to redefine digital ownership and continue to be a cornerstone of Web3.

4. A Year of Reduced Losses but Persistent Threats

In 2024, security challenges remained a major concern for the dapp industry. According to data from the REKT database, the industry suffered losses of up to $1.3 billion due to hacks and exploit vulnerabilities. While this figure is still considerable, it represents a 31% decrease compared to the previous year, making it the lowest loss amount since 2020.

The fourth quarter of 2024 was the calmest quarter of the year, with the least amount of losses from hacks and vulnerabilities. In contrast, the other quarters hovered around the $400 million threshold, highlighting the persistent fragility of the ecosystem.

Among the affected blockchains, Ethereum topped the list, accounting for 49.3% of the total losses, followed by the BNB Chain at 22.5%.Ethereum's dominance in the DeFi ecosystem has made it a prime target for complex attacks like flash loan vulnerabilities and re-entrancy attacks. Its complex smart contracts, frequent upgrades, and reliance on vulnerable cross-chain bridges have further exacerbated the risks.

Access Control: The Most Common Attack Vector

Access control vulnerabilities emerged as the most prevalent attack vector in 2024. This occurs when attackers exploit weaknesses in the system's access control mechanisms to gain unauthorized access to resources, data, or functionality.

Rugpulls also continued to plague the Web3 space, exacerbating skepticism and eroding trust in the ecosystem. While efforts have been made to mitigate the impact of these scams, they remain an ongoing issue.

The Most Significant Incidents of 2024

Among the most impactful attack incidents of the year, the following stand out:

• DMM Bitcoin CEX Exploit: A centralized exchange was hacked, resulting in a $300 million loss.

• WazirX India Exchange Vulnerability: A significant vulnerability at WazirX led to a $230 million loss.

• Ripple Co-Founder Exploit: Hackers stole $112.5 million from Chris Larsen's cryptocurrency assets.

• Munchables Drain Vulnerability: The Munchables platform lost $62.5 million due to a vulnerability.

• Radiant Capital Exploit: A vulnerability targeting Radiant Capital resulted in a $58 million loss.

As the Web3 domain continues to evolve, security challenges will remain a major concern. At DappRadar, we always advise users to prioritize financial security by staying informed about potential scams and vulnerabilities. Using trusted platforms, enabling multi-factor authentication, and being cautious of seemingly too-good-to-be-true offers are crucial for safely navigating the ever-expanding dapp ecosystem.

5. Conclusion

The 2024 Dapp industry report recorded the significant progress, challenges, and innovations in the blockchain ecosystem over the past year. From the explosive growth of DeFi and the rise of AI-driven Dapps, to the volatility of the NFT market and the ongoing security battle, the industry has shown resilience and adaptability. These developments highlight the immense potential of Web3 to reshape industries and create new opportunities.

As we enter 2025, the focus may shift to refining these innovations, achieving greater regulatory clarity, and driving mass adoption. With advancements in scalability solutions, enhanced security measures, and broader use cases, the decentralized domain is poised for another groundbreaking year.