• by Colin Kirkland , Staff Writer, January 24, 2024

Across non-fungible tokens (NFTs), decentralized finance and social media, Web3 apps attracted more engagement from users in 2023.

According to a new report by blockchain data tracker DappRadar, the number of unique active wallets that interacted with Web3 apps increased by 124% last year, with some apps performing better than others.

Unique active wallets, or UAW, is a term of measurement for how many crypto wallets are linked to or engaged with decentralized applications (DApps) through the transactions of digital assets over a particular period of time.

Based on DappRadar's findings, 2023 saw an average of 4.2 million UAWs interacting with Web3 apps on a daily basis, resulting in more than double the average from 2022.

Non-fungible tokens (NFTs) attracted the highest growth in cryptocurrency wallet engagement last year, seeing a 166% increase over 2022 (reaching 671,103 daily UAW).

NFT trading volume dropped almost 50% in 2023, with many of the leading collections plummeting in value.

However, the use of NFTs by brands, political parties and gaming studios led to a surge of sales at lower prices.

“The number of sales skyrocketed by 445%, with the average sale price settling at around $210,” the report states, highlighting a major drop in price from 2022, when the average NFT cost $2,254.

Decentralized finance (DeFi) finished behind NFTs with a 112% increase in wallet use (reaching 934,298 daily UAW), while social-media apps reported a 29% increase compared to 2022 (reaching 250,764 daily UAW), which DappRadar says is due to “leading platforms” such as token-driven decentralized social network Friend.tech, decentralized social-media creation app Lens Protocol and Galxe, a Web3 credential data network.

Notably, the DeFi sector led in transaction counts -- reporting a 537% increase, followed by the social sector at 305%.

DappRadar says Web3 app users were also more cautious in 2023, as high-risk apps -- “those with a greater chance of scams or losses” -- saw a 91% decrease in interactions.

Out of all blockchain networks, Near, Klaytn and Arbitrum attracted the highest growth rate in 2023, with an increase of nearly 200% since the beginning of the year, followed by Klaytn at 20% and Arbitrum at 32%.

Harmony, Solana and Hive blockchains all struggled through 2023. Hive has not recovered from the summer, when $100 million in funds was stolen by hackers. Solana was marred by its association with the FTX marketplace, and Hive missed its financial targets, reporting major losses.

DappRadar believes that the latter part of 2024 “holds promise for a new wave of adoption and potentially another bull run” for Web3 apps. “As Web3 companies,” it states, “our task is twofold: to prepare for this influx of new users and to devise strategies for their retention and education.”