Will Tezos [XTZ] continue to depend on NFT and DEX activity

• Activities under the Tezos DeFi protocol and NFT interest have been the major pilot of the blockchain.
• XTZ staked supply increased as more validators joined the ecosystem.

Tezos [XTZ] has seen significant growth in its ecosystem over the past quarter, largely due to the explosion of NFTs and DEX activity on the blockchain, Messari revealed. 

The open-source platform became a popular choice for NFT creators and collectors due to its energy efficiency and lower transaction fees compared to other platforms like Ethereum [ETH].

Read Tezos’ [XTZ] Price Prediction 2023-2024

Expanding participation all round

According to the crypto research firm, the NFT sales which peaked in the fourth quarter of 2022, again stabilized in Q1 2023.

Therein, Tezos was able to build a new user base for the collections under the network. In fact, Rarible, a multichain NFT marketplace added support for Tezos as sales rose above 50,000.

Source: Messari

The report also mentioned that the launch of the Formula One McLaren collectibles also influenced sustainability. And based on Santiment’s data, Tezos has been succoring momentum such that NFT sales volume reached 14 million on 22 April.

Additionally, the launch of Decentralized Exchanges (DEXes) like Dexter, Plenty, and Quipuswap further strengthened Tezos’ position as a blockchain for DeFi activity.

As a result of the jump in active users on the platforms, the Tezos TVL reached an All-Time High (ATH).

Source: Messari

The TVL growth signifies that users have strong confidence in activities on the Tezos protocol. Messari, pointing out the impact of the XTZ price, and other contributors, noted:

“The TVL denominated in USD rose 76% QoQ from $52 million to $92 million, while the TVL denominated in XTZ increased 24% QoQ from 68 million to 84 million, setting another all-time high”

To delegate, stake, and bring in more users

However, there were varying outcomes for Tezos on other branches of its use cases and applications. For one, the smart contracts call from the NFT and gaming sectors dropped. 

This means that transactions broadcasted on the network were reduced as developer execution on the network diminished.

Despite the decline, the blockchain added its highest number of validators on a Quarter-on-Quarter (QoQ) basis. Validators, in this instance, are responsible for maintaining the security of the blockchain through staking.

Source: Messari

As a result of the validator increase, the total supply of staked XTZ rose to 72%.

83% of this staked supply came from delegators while validators accounted for 27%. This infers that major stakeholders had committed to the project for the long term.

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Lately, Tezos announced a crucial development to its network which would allow optimistic and Zero-Knowledge (ZK) rollups integration. 

The project also has plans to support the Ethereum Virtual Machine (EVM) in the near future. With all of these, Tezos could experience a large influx of user adoption and might not lean on the DeFi and NFT strides alone anymore.