July Highlights in the Web3 Industry: Strong Rebound of NFT, Record Innovation in DeFi

July has been a month full of changes for the Web3 industry. Although the overall number of active wallet users slightly decreased, dropping to 22 million daily, a decrease of 8%, the market is still brimming with activity. NFT trading volume surged by 96%, with user activity surpassing that of Decentralized Finance for the first time in months. Meanwhile, the total value locked in DeFi reached $270 billion, setting a new historical high, while the market capitalization of tokenized stocks saw a significant increase of 220%.

However, the growth is not without risks. Hacker attacks resulted in losses of $132 million, an increase of 16% from June. Although AI is still regarded as one of the promising fields, 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 also beginning to take shape.

From the strong performance of blue-chip NFTs to record inflows in DeFi, the data from July suggests that the Web3 industry has not slowed down but is simply seeking new directions for growth.

Key Findings

• In July, there were 22 million independent active wallets interacting with DApps daily, a month-on-month decrease of 8%.
• Game applications account for the highest proportion at 22.4%, followed by artificial intelligence at 18.7% and NFT at 17.5%.
• NFT trading volume increased by 96%, reaching $530 million, and the average NFT price doubled to $105.
• The total locked value of DeFi ( TVL reached a new high of 270 billion USD on July 28, a month-on-month increase of 30%.
• The activity level of AI DApps has generally decreased, but Dmail, XPIN, and ChainGPT continue to grow.
• In July, losses due to vulnerabilities amounted to $132 million, an increase of 16% compared to June.

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DApp Activity Cooling Down

Similar to previous years, July saw a typical summer slowdown, with the number of daily active unique wallets decreasing by 8% to 22 million.

The social sector has experienced the largest cooling, with the daily active user count ) dUAW ( dropping by 27% to 2.8 million. This is not surprising, as social dapps often fluctuate with the waves of speculation. Currently, InfoFi platforms like Farcaster and the new Base dapp are in the spotlight, but many such communities still have strict entry barriers, making it difficult for new users to participate. In the long run, this category may become foundational. The creator economy has dominated traditional media and is making a strong entry into the Web3 space.

There has also been a noticeable 14% decline in the AI sector, with dUAW dropping to 4.1 million. Meanwhile, DeFi has shrunk by 6%, continuing the recent cooling trend. However, the gaming sector has shown resilience, growing by 2%, while NFT remains stable.

The gaming sector continues to lead the DApp ecosystem, accounting for 22.4% market share in July. Following closely are AI)18.7%( and NFT)17.5%(. It is noteworthy that DeFi was the dominant area two months ago, but has now fallen behind NFTs. This clearly indicates a shift in user behavior, possibly reflecting changes in users' priorities when interacting with Web3.

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Most Commonly Used DApps in Web3

Solana-based DEX continues to dominate. The memecoin craze is far from over, and these exchanges remain key venues for retail activity.

Outside of DeFi, the game dapp "World of Dypians" is worth paying attention to as it maintains a stable user base and continuously drives steady improvements in user activity.

It is also worth noting that two AI DApps have made it to the top of the rankings. This indicates that users' interest in AI-driven Web3 experiences is not just a passing trend, but has already permeated daily activities.

Although DeFi no longer dominates in terms of overall wallet share, it still holds a leading position in the DApp rankings. This is because launching a DeFi DApp and truly acquiring users is not an easy task, but those DApps that successfully break through often achieve higher activity and loyalty. In contrast, the types of DApps in areas such as gaming, social, or NFT are more diverse, and user attention is more dispersed.

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AI DApp: Rise, Fall and Future

In July, the activity of most AI DApps declined, but the three projects Dmail Network, XPIN Network, and ChainGPT stood out with steady growth. These projects are worth paying attention to:

• Dmail Network: A blockchain-based encrypted email service
• Exorde: Using AI to gather global news and insights
• ChainGPT: An AI-based crypto toolset, including the launch platform ChainGPT Pad for early-stage projects.

In addition, Lightchain AI has launched a mainnet specifically designed for on-chain machine learning, showcasing the future development direction of decentralized AI infrastructure with a virtual machine tailored for AI and a "smart proof" consensus mechanism.

Theta Network integrates Amazon's Trainium and Inferentia chips to support use cases like "Quakebot". Protocols such as Aethir and Render Network are making decentralized computing a reality. The ASI alliance, composed of SingularityNET, Fetch.ai, and Ocean Protocol, has officially merged under the $ASI token, aiming to create a fully decentralized AGI stack.

In the gaming field, Elympics has launched the $ELP token to achieve AI-driven "Agentic Gaming," connecting with NFT intellectual properties such as Pudgy Penguins and Doodles. AI tokens like TAO, RNDR, and AGIX are attracting significant attention from investors.

Researchers have unveiled A1, an AI agent capable of autonomously exploiting vulnerabilities in smart contracts, indicating that AI as a tool and risk is rapidly evolving.

In terms of regulation, the United States has passed multiple bills to provide clear guidelines for participants in the AI and cryptocurrency sectors, and has appointed czars for AI and cryptocurrency, marking the increasing importance of AI in the blockchain field.

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DeFi TVL Hits New High

The performance of DeFi in July was explosive. TVL grew by over 30%, reaching $259 billion by the end of the month. More notably, on July 28, the DeFi TVL hit a historic high of $270 billion, clearly indicating increased market confidence, improved liquidity, and a growing demand from users for lending, trading, and tokenized assets.

Tokenized stocks have become a major highlight. The number of wallets interacting with these assets surged from about 1,600 to over 90,000, with a total market capitalization increase of 220% during the same period. This is not just growth; it also indicates that RWA is beginning to reach critical mass.

Ethereum continues to dominate the DeFi space, with a TVL of up to $166 billion, far exceeding other public chains. In July, the price of ETH surged nearly 60%, possibly driven by favorable regulatory developments. At the same time, the annualized yield for staking rewards has risen to 29.4%, reflecting increased market confidence and user participation.

On the Solana front, Hyperliquid has stood out, generating 35% of the chain's revenue in July, thanks to rising demand for derivatives. Currently, Hyperliquid handles over 60% of the 24-hour perpetual contract trading volume, with an open interest of $15.3 billion, and has facilitated $5.1 billion in USDC bridging.

In terms of policy, July is an important moment for cryptocurrency regulation in the United States. Lawmakers passed the "Genius Act" ) to establish a stablecoin framework ( and the "Clarity Act" ) to clarify the classification of digital assets (. More importantly, SEC Chairman Atkins announced "Project Crypto," outlining a roadmap for the integration of DeFi and traditional finance, including token issuance, custody, and a dedicated compliance framework proposal for DeFi.

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NFT activities surpass Decentralized Finance

In July, the NFT market showed strong vitality, surpassing DeFi in activity, which is a change not seen for a while.

The trading volume nearly doubled, increasing by 96% to $530 million. However, sales dropped by 4% to $5 million. This indicates a rise in NFT prices: an average of $52 in June, rising to $105 in July, an increase of 103%. Blue-chip series have once again become the focus, with whales leading the trend.

Thanks to professional traders and their Blend lending protocol, Blur dominates the Ethereum NFT trading volume with a daily share as high as 80% ). OpenSea maintains the leading user count with long-tail asset listings and cross-chain activities, averaging about 27,000 users daily (. Zora gains attention with its creator-first L2 network and $ZORA token, offering affordable and convenient NFT minting services.

In addition, Starbucks has ended its Odyssey NFT loyalty pilot project. Nike's SWOOSH continues to release digital products, collaborating with EA Sports to launch virtual sneakers in games. Louis Vuitton, Rolex, and Coca-Cola ) are conducting pilot projects related to verification and collectibles NFTs in China (. Netflix, NBA Top Shot, FIFA, and others are still participating, but the licensing terms are more clear.

It is worth noting that NFTs are evolving from speculation into practical tools, transforming from collectibles and culture into identity, ticketing, gaming, and tokenizing real-world assets.

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Vulnerability Leads to $132 Million Loss

In July, losses caused by exploitations exceeded $132 million, an increase of 16% compared to June. The main vulnerabilities include:

• CoinDCX)4400万美元(: Indian exchange suffers server breach, targeting internal liquidity accounts. User funds remain unaffected, and the exchange continues to operate normally.

• GMX v1)4200 million USD (: On July 9th, a vulnerability was discovered in GMX v1 on the Arbitrum platform, allowing malicious contracts to manipulate internal accounts and withdraw excess funds. The GLP mining pool was affected; other versions of GMX were not impacted. A bounty has been set to recover the funds.

• BigONE)2800 million USD(: On July 16, the centralized exchange BigONE experienced unauthorized access to its hot wallet, resulting in multi-chain losses. The platform claims that user assets are secure and will bear all losses.

These events remind us that Web3 security work is still underway. Whether deeply involved in Decentralized Finance, NFT, or AI DApps, please carefully check smart contract permissions, avoid clicking on suspicious links, and use hardware wallets whenever possible.

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