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DappRadar Report: Analysis of the NFT trade bucking the trend

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The NFT indicator is soaring even as crypto assets tumble

原文标题：《 DappRadar 报告：NFT 和链游为何能够逆势增长？》

Original post by DappRadar

Hei Mi, Bai Ze Research Institute

In this report, DappRadar uses data such as demographics, correlation between macro metrics and on-chain metrics to predict important crypto industry trends in 2022 by analyzing user behavior patterns.

Highlights of the report:

1) NFT is almost immune to crypto market declines; Transaction volumes continue to increase, while the number of unique active wallets (UAW) connected to NFT DApps on Ethereum has grown 43% since q3 2021.

2) On the other hand, the correlation between DeFi usage and crypto asset prices is clear: when the prices of ETH, SOL, AVAX, and LUNA hit record highs, more than 1.25 million UAW connected to DeFi DApp per day, and as low as 800,000 UAW during the recent crypto market downturn.

3) Despite recent negative trends in the crypto market, blockchain games continue to be widely used. Games now account for 52% of the industry's DAPP usage, widening the gap with DeFi DApp usage.

4) China is currently the leader in traffic to DApps, up 166% compared to November 2021. In 2021, the US dominates.

The Asian footprint is becoming increasingly visible across the industry

By the end of 2021, DApps were attracting more than 2.5 million unique active wallets (UAW) per day. This is a 707% increase from the end of 2020. The rapid growth of Dapps is supported by different waves of interest, mainly due to NFT and blockchain games.

By analyzing 1.4 million visits to DappRadar in December, we see trends in current user sources that may differ from what we saw in the middle of last year.

First, China is now the country with the widest user base, with 204,000 users using DappRadar in December, up 166 percent from November. Traffic from Indonesia and India is worth highlighting as indicators for both countries more than doubled in December. Asia continues to expand its footprint in the overall crypto industry. Due to the intense interest in blockchain gaming and the potential of NFT, Asia is definitely a region to watch closely.

The United States is no longer the main source of traffic and is now second only to Asian countries. Still, the United States, where traffic grew 38% in December to more than 175,000 subscribers, remains the most important market for collectible NFT.

The UK, Russia, Philippines and Brazil are all behind India but still have a lot of users. Traffic in the four countries combined reached more than 168,000 users, an average increase of about 30%, with Russia showing the most significant growth.

Millennials and Gen Z dominate the blockchain space

Continuing with the demographic analysis, we focused on the age range to get more details about the users who are interested in blockchain.

Generation Z (1997-2012) participation in the industry continues to accelerate. In December, 30 percent of DappRadar's users were in that age group, compared with around 26 percent for most of 2021.

The dominance of millennials (1980-1994) followed the same trend, accounting for 38% of traffic. With millennials showing strong interest in areas like NFT and gaming, the future looks bright for both.

On the other hand, the decrease was most pronounced among 45 - to 54-year-olds, whose traffic dropped from 11.5 percent in January 2021 to just 7 percent in December.

Another exciting metric comes up when analyzing the device users prefer to use. Even though we got a lot of visitors with the Launch of the RADAR Token, users are still connected on their phones about 53% of the time. Although most users prefer the desktop version of the wallet for security reasons, desktop devices drive only 46% of the traffic. This could lead to an important behavioral trend that is likely to become even more important as blockchain gaming becomes a big story this year, as mobile wallets (like Ronin) and mobile blockchain gaming are expected to take a huge leap forward in 2022.

NFT and games are more resistant to macro trends than DeFi

While the three main categories of Dapps (TVL in DeFi, NFT transaction volume, and game usage) exploded in 2021, more recently macroeconomics (such as the latest outbreak of infections, the Fed's impending interest rate hike intentions, and gas issues in Kazakhstan) have affected nearly a fifth of bitcoin mining activity. The crypto market is once again in one of its periodic bearish trends.

We analyzed how some blockchain macro metrics, such as the price of mainstream crypto assets, ethereum Gas fees, and bitcoin's Fear & Greed index, would affect on-chain metrics. How important are macro metrics to the behavior of blockchain users?

(1) NFT is soaring even as crypto assets collapse

In the third quarter of 2021, NFT generated $10.7 billion in transaction volume, and its fourth quarter performance of $11.9 billion kept NFT strong. ETH, on the other hand, has been falling since hitting a record high of $4,878 in November. NFT remains positive despite crypto asset price volatility.

Not only did the number of NFT sales on Ethereum increase, but so did the number of UAW connected to NFT DApps (collectibles and markets). Since December, there have been an average of 46,800 UAW connections to the Ethereum NFT DApp, up 43% from q3.

Despite the negative macro metrics, NFT's indispensable role in the metadverse and the game contributed to the positive on-chain metrics. In addition, the projects that have been constructed continue to meet their respective goals, enhancing the prospects of their communities in the process. Add to that a steady stream of celebrities and big brands entering the field, and NFT looks as solid as ever.

In addition, communities are joining forces, such as the recently launched LooksRare market, to enhance the NFT market. Since the prospects for NFT are undeniably strong, investors may view the crypto downtrend as a buying opportunity, as the value of the native asset (in this case ETH) reduces the actual price of NFT.

Finally, the United States remains the most active region for NFT collectibles. The U.S. leads the NFT flow for DappRadar by a wide margin, with fellow Americas Brazil and Mexico in the top four. Users on the other side of the globe in the Philippines have turned their huge interest in sports, fashion and celebrities into an interest in the NFT space.

(2) Strong correlation between DeFi and macro indicators & NBSP;

Despite lagging behind blockchain games and NFT, the total lock-up value in DeFi reached an all-time high at the end of 2021. The sector has seen a significant recovery in competitiveness, driven by attractive schemes including liquidity mining schemes.

However, no other sector is more exposed to the crypto market than DeFi, so macro metrics as well as on-chain metrics at DeFi may give us some clues about trends in user behavior patterns.

While the respective native tokens have a big impact on TVL, the usage of users is not. By comparing macro metrics like bitcoin's Fear and Greed Index (FGI) with user usage, DeFi relies heavily on the crypto market. [Note: FGI is an analytics tool widely used for cryptocurrency trading that measures market sentiment on a scale from 0 to 100, from very fearful (0) to very greedy (100).]

The two charts below show the correlation between FGI, UAW numbers across the dAPP industry, and UAW numbers connected only to DeFi DApp. There is no significant correlation between these two variables compared to the dAPP industry as a whole. As mentioned earlier, NFT acts independently of the crypto market and is influenced by its utility, maturity, use cases, etc. The same is true for blockchain games. However, in DeFi, use and value are closely linked.

Looking in detail at the correlation between FGI and DeFi users, we can see that DeFi usage soared to an all-time high of 1.25 million in November -- tied to the price spikes of AVAX, SOL, and LUNA. As the crypto market cooled by the end of the year, usage fell below 1 million UAW again.

A similar situation occurs when analyzing the three blockchains with the highest TVL and their native assets.

Starting with Ethereum, the price of ETH has no correlation with NFT. However, by observing the price of ETH and the usage of DeFi, we can conclude that DeFi shows a slight correlation with the price of underlying native assets.

On the BSC, the UAW of the DeFi DApp connected to the BSC follows a similar trajectory to BNB prices, again illustrating the correlation between DeFi and its underlying native assets.

The final example is Solana. Comparing the usage of DeFi and NFT on Solana again demonstrates the extent to which user behavior in DeFi is dependent on the crypto market.

(3) The adoption rate of blockchain games remains stable

DeFi and NFT follow two different paths. As far as DeFi is concerned, macroeconomic indicators play an important role in user usage in this area. NFT seems to be more independent, and the same applies to blockchain games.

Last year, we witnessed the rapid growth and widespread adoption of blockchain games, thanks to the rapid growth and widespread adoption of blockchain games. P2E (play-to-earn) and metaverse concepts. As we have seen in the NFT space, these trends influence the way users behave from the outside. In this case, the positive emotions surrounding these two concepts make people want to participate in the blockchain game.

In the summer of 2021, we saw games surpass DeFi as the most commonly used dapp category. Both types of Dapps dominated the industry for most of the third quarter and until the middle of the fourth quarter. Almost 90% of industry usage. However, in a negative trend in the crypto market, DeFi usage is beginning to decline. The gap between gaming and DeFi usage has widened since November, with gaming now accounting for 52.4 per cent of industry activity, while DeFi usage has fallen to 34.7 per cent.

There is no doubt that blockchain games are attracting more users every month, greatly increasing the player base. With P2E and GameFi widely expected to boom in 2022, we can predict that gaming will continue to drive dapp usage in the crypto industry in 2022.

conclusion

User behavior patterns are insightful and can help predict trends that are likely to develop across the industry in the coming months.

Demographic analysis reveals the growing interest in blockchain in Asia. Their interest in games and NFT has increased significantly. Age and equipment analysis also helps to monitor potential demand in the short term.

In addition, the combination of macro and on-chain metrics can also provide clues to user behavior patterns. In this case, we can observe how NFT and games operate independently of the factors that influence the industry, such as crypto market trends and other relevant metrics.

Both NFT and blockchain games performed strongly in 2021, and the trend looks set to continue in 2022. While the price of crypto assets is inherently volatile, the use of blockchain games and NFT is increasing. Moreover, it remains to be seen whether the maturity of these two areas will be sensitive to the price of their native tokens.

In the meantime, DeFi will continue to grow behind the volatility of crypto assets. There is no doubt that the DeFi field is more complete and mature than it was a year ago, but it faces more significant challenges than others. In addition to the burden of macro indicators, compliance and traditional financial challenges are also important headwinds.