Crypto market rallies, but Web3 and metaverse tokens lag behind

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Web3 ecosystem booms as AI DApps take the lead

What's happening?

The Web3 world is buzzing, and AI-based decentralized apps (DApps) are stealing the spotlight. According to DappRadar’s July 2024 report, AI DApps have surged ahead, now making up 28% of the market—ahead of gaming for the first time.

• AI DApps on top: AI-powered DApps have overtaken gaming, which used to dominate the space. These apps, like DIN and Alaya AI, are reshaping Web3, offering new, exciting features that go beyond what we've seen before.

• Gaming's slip: Once the king of DApps, the gaming sector has dropped to 26% of the market. While still important, it's clear that the focus is shifting towards AI-driven innovations.

• Big boost in activity: The DApp sector is thriving, with daily active wallets hitting a record 15.9 million in July—up 78% from June. This shows more people are getting involved in decentralized apps across different areas.

• AI revolution: AI DApps are changing the game, bringing smarter, more innovative tools to Web3. From AI-powered financial tools to automated agents on the blockchain, these apps are leading the way in making Web3 more dynamic.

• Social DApps on the rise: Social networking on Web3 is also growing fast, now making up 20% of the DApp market. These platforms focus on privacy and user control, which are big draws for the community.

Why it matters: The rise of AI DApps is a big deal for the Web3 world. They’re not just a passing trend—they’re leading the charge in making decentralized tech more engaging and useful. As more people dive into these apps, the future of Web3 looks brighter than ever.

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Crypto market rallies, but Web3 and metaverse tokens lag behind

While the broader crypto market is bouncing back, Web3 and metaverse-linked tokens are still struggling to recover from the crypto winter. Even as Bitcoin and other digital assets rally, the once-hyped metaverse platforms are facing significant challenges.

• Metaverse struggles: Decentraland, a prominent metaverse platform, has seen its property values plummet by nearly 95%, with its user base shrinking by 90%. Mana, its cryptocurrency, now trades at under 30 cents, down from over $5 in late 2021.

• Failed promises: Andrew Kiguel, CEO of Tokens.com, which invested heavily in metaverse real estate, admits that the promise of Web3 has not been fulfilled. His company’s virtual real estate portfolio has lost 80% of its value.

• Big Ccmpanies struggle too: Even giants like Meta Platforms, which tried to create their own centralized metaverse, are struggling. Meta’s Reality Labs recently reported a $4.5 billion quarterly loss, highlighting the difficulties of making the metaverse profitable.

• Metaverse mortgages flop: TerraZero Technologies, which issued one of the first metaverse mortgages, has since stopped offering loans as land values crashed. The only mortgage issued was returned at cost as the speculative market dried up.

• Complexity and readiness: Experts like Dan Reitzik and James Casey argue that the metaverse is still too complex for the average person, and that a metaverse running on fiat currency might be more successful in attracting the general public and businesses.

While the crypto market is seeing a resurgence, the Web3 and metaverse sectors are lagging behind. The challenges of profitability, market complexity, and declining user interest are significant hurdles that need to be addressed before these technologies can truly thrive.