May proved to be a month of mixed fortunes for the crypto industry as different sectors experienced both progress and regression. While decentralized finance (DeFi) witnessed a decrease in total value locked (TVL), it also saw an increase in its share of on-chain activity. Meanwhile, the dApp industry showcased steady growth, but most blockchains, with the exception of TRON, experienced a regression in TVL. Additionally, the NFT market witnessed a decline in trading volumes, reflecting the broader industry trend.
DeFi’s TVL and On-Chain Activity:
In May, the total value locked (TVL) in DeFi protocols experienced a 4.3% decrease, amounting to $79.16 billion USD. Despite this decline, DeFi’s share of on-chain activity increased to 31%, indicating that more users are engaging with DeFi protocols, albeit with lesser collective funds.
Growing dApp Industry:
On the bright side, the dApp industry demonstrated a promising growth of 9.97% in May, with an average of 1,967,051 daily unique active wallets (dUAW). This increase signifies a steady rise in interest and adoption of web3 technologies.
Regression in Blockchains:
May was a month of regression for most blockchains, as TVL dropped across the board. However, TRON emerged as an exception, witnessing a modest growth of nearly 1% during the month. Fantom (FTM) experienced the most significant decline, with a 37% drop in TVL to $308 million. The decline was attributed to its association with the Multichain turmoil, which was fueled by rumors of potential arrests in China. The resulting uncertainty affected Fantom’s assets, causing a shift to Arbitrum.
NFT Trading Volume Decline:
The NFT market also witnessed a mixed performance in May, reflecting a broader industry trend. Trading volume plummeted below $1 billion for the first time since December 2022, with a sharp decline of 44% to $675 million compared to the previous month.
Market Share and Revenue Distribution:
During May 2023, the NFT marketplace Blur claimed a dominant market share of 65% and earned $442 million in NFT sales. Meanwhile, the former NFT marketplace leader, OpenSea, secured a 27% market share and generated $183 million in revenue. Although Blur demonstrated market dominance, OpenSea boasted a significantly higher number of traders with 377,087, compared to Blur’s 36,673. This highlights a distinction in market participants, with Blur catering to those focused on higher-frequency trading, while OpenSea appeals more to collectors.
Impact of NFT Lending Service:
Blur’s NFT lending service, Blend, garnered attention and contributed to the decline in trading volume. The migration of NFT traders from Blur’s trading platform to Blend played a significant role in this shift.
May presented a mixed bag of performance for the crypto industry. While DeFi observed a decrease in TVL, it experienced an uptick in on-chain activity. The dApp industry continued its growth trajectory, while most blockchains regressed in TVL, except for TRON. Additionally, the NFT market experienced a decline in trading volumes, with Blur emerging as the dominant player but OpenSea maintaining a higher number of traders. As the industry evolves, these fluctuations serve as valuable insights into the ever-changing dynamics of the crypto space.