Will Tezos [XTZ] continue to depend on NFT and DEX activity

• Activities under the Tezos DeFi protocol and NFT interest have been the main driver for the blockchain.
• The XTZ supply increased as more validators joined the ecosystem.

Tezos [XTZ] has seen significant growth in its ecosystem in the last quarter, mainly due to the explosion of NFTs and DEX activity on the blockchain, Messari revealed.

The open-source platform became a popular choice for NFT creators and collectors due to its energy efficiency and lower transaction fees compared to other platforms that Ethereum [ETH].

Read Tezos’ [XTZ] Price prediction 2023-2024

Increasing participation throughout

According to the crypto research firm, NFT sales that peaked in Q4 2022 stabilized again in Q1 2023.

There, Tezos was able to build a new user base for the collections under the network. In fact, Rarible, a multi-chain NFT marketplace added support to Tezos as sales rose above 50,000.

Source: Messari

The report also mentioned that the launch of Formula 1 McLaren collectibles also affected sustainability. And based on Santiment’s dataTezos has taken off so that NFT sales volume reached 14 million on April 22.

In addition, the launch of decentralized exchanges (DEXs) such as Dexter, Plenty and Quipuswap further strengthened Tezos’ position as a blockchain for DeFi activity.

As a result of the jump in active users on the platforms, Tezo’s TVL reached an All-Time High (ATH).

Source: Messari

The TVL growth means that users have strong confidence in activities on the Tezos protocol. Noting the impact of the XTZ award, Messari and other contributors noted:

“USD-denominated TVL increased 76% QoQ from $52 million to $92 million, while XTZ-denominated TVL increased 24% QoQ from $68 million to $84 million, setting another all-time high”

To delegate, invest and bring in more users

However, there were varying outcomes for Tezos on other branches of use cases and applications. Firstly, the call for smart contracts fell from the NFT and gaming sector.

This means that transactions broadcast on the network decreased as developer execution on the network decreased.

Despite the decline, the blockchain added its highest number of validators on a quarter-on-quarter (QoQ) basis. Validators, in this case, are responsible for maintaining the security of the blockchain through effort.

Source: Messari

As a result of the validator increase, the total supply of staked XTZ rose to 72%.

83% of this effort came from delegators, while validators accounted for 27%. This suggests that major stakeholders had made a long-term commitment to the project.

Is your portfolio green? Investigate Tezo’s profit calculationr

Recently, Tezos announced a decisive development to the network that would allow optimistic and Zero-Knowledge (ZK) rollup integration.

The project also has plans to support the Ethereum Virtual Machine (EVM) in the near future. With all these, Tezos may experience a large influx of user adoption and may not be able to lean on the DeFi and NFT strides alone anymore.