You just got yourself a new web3 wallet! Now, what's the first thing you are going to do with it? Well, if you're anything like most people, you're probably itching to earn some cold hard cash. And let me tell you, web3 wallets are the gateway to the world of decentralized finance, or DeFi for short, NFTs, gaming, digital identities, digital assets, and many more.

With your shiny new web3 wallet, you can dive into the world of token trading where you can buy, sell, and swap tokens. It's like playing the stock market, but cooler and more futuristic. Plus, you can earn passive income by staking your tokens or investing in exciting projects. Afterall, tokens derive their values from underlying projects and their applications. It's a whole new way of managing your money and assets, and it's super exciting!

Web3 wallets are also a ticket to a whole bunch of other experiences. For starters, you can use it to buy and sell NFTs to gather digital assets such as memberships, receipts of investments, proof of attendance, ownership of games, exclusivity to communities and events. NFT is now having wider adoption than just holding a notional value. Different communities are using them for memberships, airlines are using them for ticketing, storing virtual real assets, arts and collectibles, web3 identifications, etc. It's a booming market, and you can be a part of it with your web3 wallet.

And let's not forget about gaming! Gaming has the power to engage audiences and thus push technology forward whether it's in terms of cloud computing, animation, digital community building and even payments. So if gamers do it, web3 is likely to become mainstream soon. And, with your web3 wallet, you can play games that are built on blockchain technology. And here's another cool part: you actually own the in-game assets and trade them on secondary markets. No more losing all your hard-earned assets when the game developer ever shuts down. Your virtual treasures are yours to keep and trade as you please.

But, we've only scratched the surface of what your web3 wallet can do. Let's dive into some on-chain data to see what people are actually doing with their wallets.

So, what's making people come to Web3?

We took a peek at the activities of new web3 wallet users between March and May, and checked the first five transactions initiated by them across Ethereum, BNB, Polygon, and Fantom chains. And, we did uncover some interesting stuff!

When it comes to getting new users on board, we found that the most popular activities were transferring tokens, swapping them for other tokens. People are flocking to DeFi platforms to earn some extra dough, and who can blame them? But that's not all. We also discovered that folks are using their web3 wallets for social interactions, staking tokens, collecting NFTs, playing games, and even using fancy name services.

Now, let's talk about the big kahuna:

DeFi. It's no surprise that DeFi is the reigning champ when it comes to user acquisition. It's like the king of the web3 world. But NFTs are also gaining serious traction as technology primitive and not just having a notional value. We are also seeing more and more people jumping into gaming, exploring the metaverse, and building their own communities.

Source: Analyzed using data from https://dune.com

It's exciting to see how web3 use cases are diversifying and expanding beyond just DeFi. Here are some other emerging use cases for new web3 wallets users

Interoperability (Bridge + Proxy):

One common debate about the future of web3 in its early days was, will it be a single or multi-chain world. While, our data says, another emerging use case for web3 wallets is interoperability. This means that users will be able to seamlessly move their tokens and assets between different blockchains. This will make it much easier for users to participate in the decentralized economy.

NFTs:

NFT as you can see has emerged among top categories for which users open a web3 wallet. With global giants like Puma and Nike releasing digital sneakers and exploring partnerships, thereby joining the race will boost the NFT category adoption.

Social:

While a lot has been done for DeFi, not much has been explored on decentralized social networks. The adoption of social networks will lead to a shift in the creator economy, by allowing creators to retain full control of their content and the revenue they earn, and releasing it from a handful of private companies.

Metaverse:

The lines between the real and digital world are blurring everyday and with web3, it's going to blur them more with metaverse. While it's still in its early stages, it has the potential to be a huge platform for social interaction, gaming, and commerce. Web3 wallets will be essential for accessing the metaverse, and they will allow users to own their digital assets in the metaverse. A small fraction of users have also been opening web3 wallets to access metaverse.

Now let's talk about engagement. We looked at wallet activity and transaction frequency. DeFi and Gaming had the most active wallets per week, followed by proxy, cross-chain and bridges. Even though there were fewer active wallets for NFT, Governance and Social, they were the real MVPs when it came to transaction frequency. However, wash-trading* within NFT cannot be ignored, inflating their numbers. That said, the folks who are into Social are seriously engaged with their web3 wallets. If you look at the difference between why users are opening a wallet and what use-case they continue on - you see a clear difference as, NFT and bridges use-case for opening wallets, while Gaming as one where users remain active.

*Wash trading means buying and selling of NFTs by the same user or a group of users, to inflate volumes and create false impression of larger market activity, thereby inflating transactions, volume and prices.

Source: Analyzed using data from https://dune.com

In terms of emerging engagement categories, DeFi continues to dominate, but we're also seeing the rise of proxy services and bridges for cross-chain transactions. It seems like people want the flexibility to use their web3 assets across different blockchains. It's all about interoperability!

So, there you have it! We've explored the world of web3 wallets, from acquisition to engagement frequencies. It's clear that people are finding new and exciting ways to make the most out of their web3 wallets. Whether it's making money, collecting NFTs, diving into gaming, or exploring the metaverse, there's something for everyone in this evolving web3 landscape. So go ahead, open that web3 wallet of yours on Okto DeFi App, and let the adventure begin!

Written By

Ambalika Smiti

Assistant Vice President - Analytics, Okto