This is our Q2 2023 crypto market sector snapshot, a report from our Sygnum investment research.
The second quarter brought remarkable growth and performance in the blockchain and crypto space. User activity witnessed a surge with average daily Bitcoin transactions doubling, fueled by accelerated developer activity on the Bitcoin network. Uniswap, the decentralised exchange, saw a substantial 50 percent increase in average daily users during the quarter. Additionally, Real world asset (RWA) DeFi protocols experienced impressive growth, with Total Value Locked (TVL) more than doubling, despite an overall decline in DeFi TVL.
Performance-wise, the Layer 1 sector stood out as the best performer, driven primarily by the outstanding performance of Bitcoin. However, the Layer 2 sector faced a sharp correction after its strong Q1 showing, partly due to the SEC classifying the leading Layer 2 token, Polygon, as a security, and a sizable supply unlock at Optimism. On the other hand, the gaming and metaverse sectors underperformed the market as user activity remained relatively low.
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