Web3 enters 2024 with a bearish $2.8B TVL loss

This past week, the total TVL balance across 221 Web3 ecosystems tracked by the 0xScope team decreased by $2.8B to $95.2B, down 2.87% from $98B at the start of 2024. About 67% of all Web3 ecosystems saw lower TVLs this week, amid a mostly bearish week for many cryptocurrencies.

In this edition of the Web3 Hot Trends report, we discuss the latest trends and bright spots across Web3 ecosystems and projects.

Ecosystem TVL Growth

TVL is an essential indicator of how much capital is currently engaged in the decentralized finance (DeFi) space. Here are some key observations from TVL growth data we tracked this week.

1. Ethereum, BNB, Solana, Avalanche combine for $2.2B in lost TVL. Ethereum leads all TVL losers this week with a $1.5B decline, likely an after-effect of $ETH's 14% price fall to $2,050 in just two hours on January 3. Some of the biggest Web3 ecosystems, such as Solana, BSC, and Avalanche also saw notable TVL declines worth $415M, $164M, and $141M, respectively. Solana's huge dip is worth looking into, especially given its major bull run at the end of 2023.

2. Algorand loses almost half its TVL. Algorand also saw significant losses this week, as evidenced by its loss of 49.10% of its total TVL, which now stands at $97.7M. The platform's $94.3M TVL decline coincides with its $ALGO token's 19.3% swoon over the past 7 days.

3. Manta TVL sees 20x TVL growth in just 3 weeks. Ethereum Layer-2 platform Manta is on a rapid rise, growing from just $18M in TVL in mid-December to $356M today. Over the past 3 weeks, the platform expanded its TVL by $86M, $171M, and $81M. Right now, Manta is just about $4M away from entering the top 10 list of the biggest Web3 platforms by TVL. Manta's $81M tops all TVL gainers among ecosystems, except for Tron, which grew by $120.5M.

Full List

Project TVL Growth

Diving deeper into the projects’ TVL growth, the 0xScope team spotted positive trends from the projects that stood out this week:

1. Only 18 projects grow TVLs by more than $1M. In contrast to the past few weeks, when it's a regular occurrence to see projects grow their TVLs by $100M or more, the few Web3 projects that saw bigger locked funds this week only recorded small gains. This week's bearish Web3 market contributed to this anemic growth pace for Web3 projects in general.

2. Aave leads TVL gainers with a modest $39.3M growth. Aave on Ethereum boosted its TVL by just 0.71%, while its Arbitrum version added $4.1M (+4.12%) to its locked funds, with no major updates for the project amid a down week for crypto trading.

3. Beta Finance sees 82.8% TVL growth. Among Web3 projects that added at least $1M to their TVLs, Ethereum-based DeFi project Beta Finance saw the biggest growth by percentage, after boosting its TVL by $1.6M. This relatively small project recently claimed that its users can earn 33%-45% APR from staking its native $BETA token.

Full List

Project User Growth

Project user growth can offer insights into the adaptability and popularity of specific projects. Here’s what stood out:

1. TinyTap keeps a firm grip at the top of user growth rankings. The Animoca Brands-owned educational app has consistently topped out project user growth rankings for the past 6 weeks. After ending December 2023 with about 720,000 new users, TinyTap added 118,000 more users in the first week of January 2024.

2. Hooked grows its user base by 28.22%. Hooked, a Web3 educational platform that's on BSC, may be overshadowed by its bigger competitor in TinyTap, but it leads all user gainers this week based on growth percentage. The project's addition of 12,115 users this week resulted in a major boost for its user base.

Full List

Notes:

Users, as defined by 0xScope’s tools, pertain to real users behind addresses, calculated by 0xScope’s proprietary entity and bot recognition algorithm.

TVL stands for total value locked in a project.

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