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Dance of the Dapps

It has been a while since we visited upon state of affairs in the DApp ecosystem. Today we take a look at some DApp (Decentralized App) metrics – DApp usage, the number of users and DApp transactions on the blockchain.

Our initial research threw up a new Ethereum DApp called Proethers that is seemed to be gaining quite a lot of traction over the past few days. According to Dapp.com, this DApp has the highest number of 30-day users, eclipsing those of other popular DApps such as Endless Game, IDEX, etc. We were excited to learn more about this hot new DApp on the block, and boy, it turned out to be a complete let down!

Source: Dapp.com

This DApp claims to 10x your money by sending back to you 10 times the amount of ether you send to the address mentioned on the website. Needless to say, this is an outright ponzi scheme aimed at gullible users. Various versions of this scam have been propagated on telegram, at the peak of the ICO boom.

Top DApps by Users:

Top DApps on both ETH and EOS have witnessed users ranging between 60k and 70k in number over the past 30 days. This is only a tiny sliver of the millions of daily active users that most successful centralized applications have. Moreover, since the cost of a Sybil attack is much lower in the case of DApps than it is in the case of centralized applications, the current DApp user statistics could well be overstating the actual numbers. 

Source: Dapp.com

Top DApps by On-chain Transactions:

In terms of DApps by highest number of onchain transactions in the last 30 days, EOS DApps account for a majority of transaction volume with 7 out of the top 10 DApps built on EOS. However, as EOS transactions are absolutely free, transaction counts are susceptible to inflation, which we think is very likely the case with EOS DApps.  

Source: Dapp.com

DApps by Category:

Unlike social media, which is the most dominant category in centralized applications, gaming and gambling are the dominant categories in DApps. Decentralized exchanges, which are expected to be a critical component in the DeFi ecosystem, account for only 20% in the Top 10 ETH DApps. DApps on EOS are heavily skewed towards gambling, with 7 DApps among the top 10 focused on punters.

ETH Dapps by Category
Source: Dapp.com
EOS Dapps by Category
Source: Dapp.com

Almost four years on from the launch of Ethereum as a Turing complete, programmable smart contracting platform, the protocol is still undergoing radical changes on a frequent basis and will take a fair bit of time to reach a steady state, or at least some semblance of it. Centralized applications offer a far richer UI/UX and customer experience, while DApps continue to suffer from scalability issues and the lack of a sticky set of users. Customers are clearly not looking beyond usability and UI richness while using applications and the concept of decentralized applications may be too early for large scale customer adoption.

As seen from the proliferation of gambling DApps, which are in theory immune to regulatory clamping and censorship, there is clearly a demand for DApps that can allow users from around the globe to access a particular application in a permissionless manner, regardless of the legality of it in a particular jurisdiction. What is even more important is addressing the fundamental challenges and designing the incentive structures that drive the network effects, and in bringing in incredibly large number of users to an application. Ethereum, with its first-mover advantage, large ecosystem of developers, and scale of users is in pole position to be the forerunner in the DApp revolution. But the burning question is whether it is going to take 5 years or 25! As we have observed before, for the vast majority of users, convenience, costs, and a better user experience trumps concerns over privacy, decentralization etc. Another reason why the crypto community should look at Facebook’s efforts in this space as a mixed blessing. It could be very good for overall crypto adoption, but it could also end up being very bad for crypto, and in general.

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