With Defi Hit By Tornado Cash Sanctions, Layer-2 Protocols Thrive Amid Ethereum's Merge, Dappradar's August 2022 Blockchain Industry Report Shows

(MENAFN- News Direct)

Kaunas, Lithuania | September 02, 2022 10:00 AM Eastern Daylight Time



 DappRadar , the global app store for decentralized applications, released its August Blockchain Industry Report today, revealing that while DeFi-based activity ramped up with a 3.7% increase from July, the industry's TVL decreased by 10.47%.

In marked contrast, Ethereum scaling solutions are enjoying a considerable increase in their DeFi metrics amid the Merge; with Optimism promoted to top ten blockchain status with $1 billion TVL approximately.

After the Office of Foreign Assets Control (OFAC) imposed penalties on Tornado Cash, Circle, the payments company behind USDC, banned some addresses, freezing $75,000 in cash, and in turn impacted the stability of the DAI stablecoin, whose peg stability is maintained by USDC deposits.

With protocols like dYdX and Aave prohibiting their usage by anybody who has dealt with Tornado Cash, the DeFi industry's TVL fell 10.47% month-over-month, losing about $8.7 billion.“Even though DeFi shows signs of recovery when analyzing the Industry Unique Active Wallets, the overall DeFi TVL is still suffering and presently sits at $74.21 billion, an alarming decrease considering that this amount was $250 billion less than eight months ago,” the DappRadar report stated.

On a more positive note, the Layer-2 (L2) protocols based on Ethereum are showing indications of growth mainly driven by the upcoming Ethereum Merge. In first position is Optimism , which entered the top ten of blockchains with a total locked value of about $1 billion, a growth of 57.61% MoM. Next, Arbitrum has a MoM rise of 14.36%, followed by Polygon , which has a MoM growth of 6.50%, though a year-over-year decline of 62.58%.

“Dapps developed on Ethereum Mainnet will continue to migrate to Layer-2s, due to liquidity mining incentives, cheaper gas prices, and the possibility of retroactive token airdrops. As users accumulate on these rollups and TVL develops, new protocols will be encouraged to be created directly on L2s, necessitating UX enhancements across on-ramps, wallets, and bridges to enroll users directly onto L2s,” the report noted.

In contrast these are difficult times for the NFT market, as seen by the recent layoffs at Opensea, the decline in trading volume illustrated below, the devaluation of crypto-currencies, and the risk of mass liquidation of Bored Ape NFTs by BendDAO.



Despite these issues, July saw the introduction of two new exciting marketplaces: Gamestop and Nickelodeon's NFT Marketplace. August was no different as we saw the emergence of a new NFT marketplace, SudoSWAP , which aims to disrupt the way crypto consumers see NFT liquidity and trades. This is achieved via the introduction of the 'Automated Market Maker' (AMM) concept to NFTs through this new marketplace. 


About DappRadar

Founded in 2018, DappRadar is the The World's Dapp Store: a global decentralized applications (dapps) store, which makes it easy for its base of more than 1 million users per month to track, analyze, and discover dapp activity via its online platform. The platform currently hosts more than 10,000 dapps from across 30+ protocols and offers a plethora of consumer-friendly tools, including comprehensive NFT valuation, portfolio management, and daily industry-leading, actionable insight.

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