Blockchain is now mainstream, but there are multiple niches that are growing and finding traction in the real world on a standalone basis. Decentralized Applications (DApp) have existed since the advent of P2P networks, but have only gained popularity with blockchain technology.
So, what are these decentralized apps, and why are they important?
They are a basic connector between users and providers (like an app) but are not controlled by any specific entity. Basically, the code/database/transactions run on a decentralized peer-to-peer network as compared to centralized servers for normal apps. DApps are special and superior because they are powered by the phenomenal blockchain.
There are a few characteristics that make blockchain DApps standout. These include —
- They are not controlled by any entity and can be published without any middlemen to manage the information and, so, are autonomous
- They have cryptographically stored data of operations
- DApps use cryptographic tokens and generate tokens, as well
This has resulted in DApps being launched almost everyday with last count suggesting almost 2,500 DApps. The challenge comes in the form of tracking down the traffic that is being created on the blockchain through the DApp and recording the data of this traffic. Transparency is critical for growth of the DApp ecosystem, as it allows genuine players to raise funding and invest in customer engagement.
DAppRadar: A one of a kind solution to the challenge
To keep track of activities on these applications, in 2018, DAppRadar was founded by Skirmantas Januška and Dunica Dragos Valentin. The company was formed with the intention to analyze and rank the quantum of activity happening in the DApps market, and now has moved on to add analytics to its services, driving more data and insights. The company has now evolved to be a distribution channel for the fledgling niche. It lists popular decentralized Ethereum applications, which are ranked by Daily Active Users (DAU) to assess their popularity.
One can filter the data using metrics like daily number of users (in the past 24-hour period), daily/weekly trading volume (in terms of tokens), and daily/weekly number of transactions. With a small group of ~10 professionals working together, the company is currently bootstrapped. In communication with Patrick Barile, COO of DAppRadar, we evaluate the growth of the company and the industry.
In terms of statistics, DappRadar has ~20,000 unique visitors per week with insights on ~1,760 DApps. The website supports the Ethereum (ETH), EOS.IO (EOS), and TRON networks.
They follow a criterion to select which network will be supported — they get involved in a protocol (the network) only when they see a substantial amount of activity happening on it. Any platform with meaningful traffic metrics is green-flagged to be supported by the company.
DApps and Their Evolution Through 2018
DApps have seen different waves in the past one year. Initially, in 2018, decentralized exchanges saw a lot of activity happening as a result of interest in trading. This soon died down but was followed by the launch of high-risk ponzi schemes in the second quarter of the calendar year. The market smartened up to these fly-by-night operators as cryptocurrency prices entered a free fall. Around August/September 2018, the DApp market saw a shift towards blockchain-powered gaming and gambling. EOS and TRON have been generating huge traffics through gaming and gambling because these networks do not charge any GAS/fees, making the transactions free. But the issue is that DApps can execute artificial transactions through bots to enhance usage metrics. The company has been successful, to a certain extent, in filtering out the bots. Barile believes that Ethereum has about ~1,500 DApps, EOS about 250, and TRON somewhere below 100.”
Ethereum, as per the website, has the majority of developers as it was the only protocol that existed initially. A lot of gambling takes place on EOS and TRON as they have a quicker throughput. Geographically, more developers in Asia are on EOS and TRON, whereas developers in the west prefer ETH as of now and are slowly opening to EOS and TRON.
DApps Taking Over the Market
DApps are poised to disrupt exchanges, stock markets, trading, gaming, and gambling with decentralization. According to Barille, if there is any one sector that will truly face the heat from DApps, it has to be the gambling sector. The transparency is much higher due to blockchain, which decreases chances of fraud to a great extent.
Another sector following gambling is gaming. Axie Infinity and Mythical Games (developer) are two gaming DApps which have created quite a buzz. The COO is pretty excited about financial DApps looking to create blockchain solutions in lending, insurance, and trading. Even more exciting is the fact that the average spend on DApps is exponentially higher than other centralized freemium models. This augurs well for the industry.
When the company started, only 100 DApps were launched per month. This has now increased to 250 launches per month. Also, starting form only 500 daily active users, many DApps now have 5,000 daily active users. This illustrates the growing acceptance of decentralization in the market.
The whole idea of creating decentralized apps on the blockchain has picked up pace, and there are various developers shifting to blockchain protocols to post their applications. DappRadar has evolved into an Apple App Store/Google Play store ecosystem as a one-stop shop for DApps. It offers an entirely unique platform to track user activity on these DApps and supports the three networks which have the most activity as of now: ETH, EOS and TRON.
Written by Heena Dhir.