Web3 Industry July Overview: NFT volume surges, DeFi hits new highs

In July, the Web3 industry showed a complex development trend. Although the overall wallet activity slightly declined, the NFT and Decentralized Finance sectors performed remarkably. NFT volume surged by 96%, reaching 530 million USD, with the average price doubling to 105 USD. The total locked value in DeFi reached a historical high of 270 billion USD, with a month-on-month increase of 30%.

However, this growth is not without risks. Losses due to security vulnerabilities this month reached $132 million, an increase of 16% compared to last month. Although AI is still regarded as a promising field, the usage of most AI dapps has seen a double-digit decline.

On the regulatory front, the United States has passed several important cryptocurrency bills, and the global regulatory framework is gradually becoming clearer. From the strong performance of blue-chip NFTs to record inflows into Decentralized Finance, July has proven that the Web3 industry is adjusting its direction rather than stagnating.

Main Data

• Daily active wallets: 22 million, a month-on-month decrease of 8%
• Game applications account for the highest proportion (22.4%), followed by AI (18.7%) and NFT (17.5%)
• NFT volume reached 530 million USD, an increase of 96%
• The total locked value in DeFi reached a new high of 270 billion USD.
• Security vulnerabilities caused a loss of 132 million dollars.

Dapp Activity Analysis

In July, the Web3 industry experienced a typical summer slowdown, with the number of daily active wallets decreasing by 8% to 22 million. The cooling in the social sector was the most pronounced, with daily active users dropping by 27% to 2.8 million. The AI sector also saw a 14% decline, with daily active users falling to 4.1 million. DeFi shrank by 6%, continuing the recent cooling trend.

However, the gaming sector has shown resilience, growing by 2%, while NFT remains stable. Gaming continues to lead the Dapp ecosystem, accounting for 22.4% market share, followed by AI (18.7%) and NFT (17.5%). Notably, DeFi has fallen behind NFT, reflecting changes in user behavior and priorities.

Popular Dapp Analysis

The Solana-based decentralized exchange still dominates, indicating that the Memecoin craze has not faded. The gaming Dapp "World of Dypians" maintains a stable user base, continuously driving an increase in user activity. Two AI Dapps have entered the top ranks, showing that users' interest in AI-driven Web3 experiences remains strong.

Although DeFi no longer dominates the overall wallet share, it still occupies an important position in the Dapp rankings. This is because it is relatively difficult to launch successful DeFi Dapps, but once a breakthrough is made, they often achieve higher activity and loyalty. In contrast, the categories of Dapps in areas such as gaming, social, or NFT are more diverse, and user attention is more scattered.

AI Dapp Development Trends

In July, most AI Dapps saw a decline in activity, but Dmail Network, XPIN Network, and ChainGPT performed outstandingly, showing steady growth. Other noteworthy projects include:

• Exorde: Using AI to collect global news and insights
• Lightchain AI: Launching a mainnet specifically designed for on-chain machine learning.
• Theta Network: Integrating Amazon's Trainium and Inferentia chips
• Aethir and Render Network: Driving Decentralized Computing Realization
• ASI Alliance: Composed of SingularityNET, Fetch.ai, and Ocean Protocol, dedicated to building a fully decentralized AGI stack.
• Elympics: Launched the $ELP token, enabling AI-driven "Agentic Gaming"

Researchers have unveiled A1, an AI agent capable of autonomously exploiting vulnerabilities in smart contracts, showing that AI is rapidly evolving as both a tool and a risk. On the regulatory front, the United States has passed several bills providing clear guidance for the AI and cryptocurrency sectors.

Decentralized Finance Market Performance

In July, DeFi performed remarkably. The total locked value increased by over 30%, reaching 259 billion USD by the end of the month. On July 28, DeFi TVL set a historical high of 270 billion USD, reflecting increased market confidence, enhanced liquidity, and growing user demand for lending, trading, and tokenized assets.

Tokenized stocks have become a major highlight. The number of related wallets surged from about 1,600 to over 90,000, with a total market value increase of 220%. This indicates that Real World Assets (RWA) are reaching critical mass.

Ethereum continues to dominate the DeFi space, with a TVL of up to $166 billion. The price of ETH surged nearly 60% in July, possibly driven by favorable regulatory news. Staking rewards' annualized yield soared to 29.4%, reflecting increased market confidence and user participation.

On the Solana side, Hyperliquid has performed impressively, generating 35% of the blockchain's revenue in July, thanks to the rising demand for derivatives. Hyperliquid handled over 60% of the 24-hour perpetual contract trading volume, with open contracts reaching $15.3 billion.

On the regulatory front, the United States has passed the "Genius Act" and the "Clarity Act," providing a framework for the classification of stablecoins and digital assets. The chairman of the U.S. Securities and Exchange Commission announced "Project Crypto," outlining a roadmap for the integration of DeFi with traditional finance.

NFT Market Trends

In July, NFT activities surpassed DeFi, showing strong vitality. The volume increased by 96%, reaching $530 million, but sales fell by 4% to $5 million. This indicates a rise in NFT prices, with the average price increasing from $52 to $105, a growth of 103%. Blue-chip series became the focus again, with large traders leading the trend.

Blur dominates the Ethereum NFT volume, thanks to professional traders and its Blend lending protocol. OpenSea maintains a lead in user numbers with its long-tail asset listings and cross-chain activities. Zora gains attention with its creator-oriented L2 network and $ZORA token.

Traditional brands continue to venture into the NFT space. Nike's SWOOSH continues to launch digital products and has collaborated with EA Sports to release in-game virtual sneakers. Louis Vuitton, Rolex, and Coca-Cola (China) have initiated pilot projects related to authentication and collectibles NFTs.

NFT is evolving from speculation into a practical tool, shifting from mere collectibles and cultural symbols to applications in identity, ticketing, gaming, and tokenizing real-world assets.

Security Vulnerability Analysis

In July, losses resulting from vulnerabilities exceeded $132 million, a 16% increase compared to June. Major events include:

• CoinDCX ($44 million): Indian exchange server breached, targeting internal liquidity accounts. User funds were not affected.
• GMX v1 ($42 million): A vulnerability was found in GMX v1 on the Arbitrum platform that allows malicious contracts to manipulate internal accounts.
• BigONE ($28 million): The hot wallet of the centralized exchange was unauthorizedly accessed, resulting in multiple on-chain losses.

These events warn that Web3 security efforts still need to be strengthened. Users should carefully check smart contract permissions, avoid clicking on suspicious links, and use hardware wallets whenever possible.