DeFi Activity Flourishes in Q1 2023
A new report from DappRadar on the state of DeFi shows that the industry has had a successful quarter despite facing challenges since late 2022. While the overall cryptocurrency market saw a downtrend in 2022, which affected the number of users interacting with DeFi applications, the industry has witnessed a considerable increase in Total Value Locked (TVL).
According to the report, the number of daily active wallets (dUAW) decreased by almost 10% compared to the previous quarter.
However, this is in line with the overall decline in dUAW across all cryptocurrency sectors since Q4 2022. Most of these users are active on Binance, reaching 449,000 dUAW in Q1 2023. However, this still represents a 28% decrease compared to the 629,000 dUAW in the last quarter of 2022. This indicates a decline in DeFi’s market share of users.
Currently, the trading platform Wax ranks second in terms of the number of daily active wallets with nearly 400,000, increasing 9% in the past three months. In addition, Polygon has seen a surge of 25% in dUAW, surpassing 197,000 unique wallets per day.
While most other blockchain platforms have shown slight growth in the number of active users, Arbitrum has achieved an impressive milestone with a 125% increase in dUAW compared to the previous quarter.
The growing interest in Arbitrum has also driven the TVL of this layer 2 blockchain to a new high of $2.25 billion. Currently, the TVL of the DeFi industry is holding at $83.3 billion after the end of Q1 2023, according to DappRadar. This figure represents a 37% increase compared to Q4 2022. The Arbitrum airdrop has stirred up the cryptocurrency community, attracting a large number of users to this platform. This is also one of the driving forces behind the development of the entire DeFi industry.
On March 16, the Arbitrum Foundation announced that ARB, Arbitrum’s new token, would be airdropped to community members on March 23. The project has distributed over 1 billion ARB to around 600,000 user wallets, pushing the number of transactions on this layer 2 blockchain to a record 2.7 million, surpassing both Ethereum and Optimism.
The decline in the number of active users in DeFi may be a concern, but the industry’s TVL growth and the success of platforms like Arbitrum suggest that DeFi is still a significant force in the cryptocurrency world. With the growing popularity of layer 2 blockchain platforms and the increasing adoption of DeFi in traditional finance, the future of DeFi looks promising.
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