Unique Active Wallets connected to blockchain DApps are falling

• The report shows that overall dApp activity has declined sharply, but activity on DeFi apps showed signs of improvement.
• Exploitation of DeFi protocols continued to persist in August 2022, with Nomad’s $120 million hack remaining the largest.

DappRadar has recently published its report for the month of August 2022 following a volatile activity in the crypto market. According to the report, DApps activity has been on a continuous decline month by month.

Currently, the daily Unique Active Wallets (UAW) associated with blockchain dapps have dropped to an all-time low of 1.67 million. In August 2022, UAW connected to blockchain DApps fell by 2.53 percent compared to the previous month. There is also a drop of 14.73 percent compared to August 2021.

But on a positive note, DeFi dapps showed signs of improvement marking a 3.7 percent increase in daily average UAW month over month (MoM). DappRadar notes that this growth has mainly come from Flow Protocol which recorded a 577 percent UAW increase from last month. This has been mainly due to the success of the Flow-based game Solitaire Blitz.

But when it comes to DApps activity, Ethereum Layer-1 competitor Solana faced a major blow. Compared to the previous month, Solana UAW fell by 53 percent during August 2022. In addition, with new hacks taking place on the Solana blockchain, the total number of transactions on the platform also fell by 68 percent.

Looking at the NFT sector, the total number of unique active wallets (UAWs) decreased by 16.7 percent to 114,542. This is the lowest number of NFT UAWs since June 2021.

Tornado Cash Sanctions Affect DeFi TVL

DappRadar’s report shows that the sanctions against crypto mixer Tornado Cash have also affected total-value-locked (TVL) in decentralized finance. The aggregate DeFi TVL is currently just under $75 billion. That’s a big drop from the DeFi TVL of $250 billion eight months ago.

Compared to August 2021, DeFi TVL has fallen by more than 56 percent. The ban on Tornado Cash has added further pressure with DeFi TVL falling 10.47 percent month-on-month and losing more than $8.7 billion.

Ethereum continues to take the lion’s share by controlling nearly 69 percent of the total DeFi TVL. The total value locked across DeFi applications on Ethereum is currently $51.47 billion. That’s an 11 percent increase over the past month and a 56 percent jump compared to August 2021. DappRadar explains the scenario surrounding Solana:

As a result of the wallet attack, Solana TVL fell 27% in the first four days of August, continued to fall 6% for the rest of the month, and is now valued at $2.11 billion, a loss of about $1 billion.

The state Nomad exploits

The FBI recently published a report stating that 97 percent of the total amount lost in crypto hacks is from DeFi platforms. The majority of the cash stolen from DeFi protocols is attributed to the “bad actors” linked to North Korea’s infamous Lazarus Group.

In the first week of August itself, hackers stole more than $190 million by exploiting the Nomad cross-chain bridge. Also on August 2, hackers exploited more than 8,000 Solana wallets and stole $5.2 million in digital coins. In its report, DappRadar noted:

There were a total of 31 hacks in August, for a total of $211 million, of which 90% is represented by the Nomad hack. In total, the exploits represent 96% of the total lost funds, 1.85% is represented by exit fraud, and the remaining by phishing.