The world of decentralized finance (DeFi) and non-fungible tokens (NFTs) saw some rough times in August, according to data from DappRadar.
DeFi Takes a Hit
The total value locked (TVL) in DeFi, which basically measures how much money is invested in DeFi projects, dropped by 14% in August. This decline is partly due to the volatile nature of cryptocurrencies, especially Ethereum (ETH), which lost 22% of its value during the month.
Despite the dip, DeFi remains a popular investment area, attracting 25% of all funding in August.
NFT Trading Slows Down
NFT trading volume also took a hit, reaching its lowest point for the year. The volume dropped by 16% compared to July, hitting $471 million.
However, the number of NFTs being traded actually increased by 17%. This means that while more NFTs are being bought and sold, their average prices have fallen significantly. They are now five times cheaper than they were in March, when the NFT market was at its peak.
Blockchain Games Drive NFT Activity
The increase in NFT trading can be attributed to the growing popularity of blockchain games like Gods Unchain and Guild of Guardians. These games have become active trading communities, driving the NFT market.
DApp Activity Still Strong
Despite the downturn in DeFi and NFTs, the overall decentralized application (DApp) industry is still booming. The number of unique active wallets interacting with DApps reached a record high in August, with an average of 17 million wallets per day. This represents a 9% increase from the previous month.
So, while August wasn’t the best month for DeFi and NFTs, the overall DApp industry is still showing strong growth. It’s important to remember that the crypto market is volatile, and these dips are just part of the ride.
