There’s been a lot of whispering about the state of dApps lately. From bot traffic to woefully low user numbers, poor UX, and high latency, they’ve certainly got their problems.
But before we stick the knife in and twist it on blockchain dApps, it pays to remember that this technology is still in its infancy. According to a report by Dapp.com, the second quarter of 2019 saw dApp transaction volume hit an all-time high.
The state of blockchain dApps in Q2 2019
When most people think of blockchain developer platforms, their minds turn to Ethereum. Ethereum was the first smart contract platform to be released and is also the second-largest cryptocurrency by market cap. But other blockchains have been building as well.
Vitalik Buterin’s brainchild now has some serious competition – and not just in the shape of Tron and EOS. Newer players are also gaining some traction when it comes to blockchain dApps. These include IOST, Steem, and TomoChain (although it should be noted that they still have a long way to go to catch up with the mighty ETH).
Despite the news that the majority of EOS dApp traffic was generated by bad bots and that Ethereum dApps were struggling to find a user base, Q2 of 2019 saw a significant boost in terms of both active users and transactions.
According to the Dapp.com report, the total transaction volume hit $3.28 billion, which marks an all-time high. The number of active users was well over a million as well, with more than 35% of existing users using dApps at least once in Q2.
484 new dApps entered the market this quarter, and Tron emerged as the most active platform. So, who’s using these blockchain dApps and what verticals do they target? Let’s take a closer look by platform.
Despite the competition, Ethereum still remains the most popular platform for developers. dApps on this blockchain are generally more diverse compared to others, which tend to focus on the gaming and gambling verticals. Of all the dApps on Ethereum, decentralised exchanges (DEXs) are by far the most popular, bringing in some 70% of all users. There are also social dApps, finance dApps, and some gaming ones, but DEXs seem to be Ethereum’s strength.
Interestingly, the report found that Ethereum dApp usage has a strong correlation with the price of ETH. The higher the price, the more users there are. This has been greatly boosted since the bull market started to charge out of the gate in mid-May.
Ethereum may be the most popular choice for developers and have the most amount of dApps, but EOS takes the cake when it comes to users. Almost 62% were active in Q2, while more than 80% of all EOS dApps remained active throughout the quarter as well.
These numbers may not convince everyone, however. The Q1 stats for EOS dApps have already been contested by blockchain intelligence firm AnChain. Its research on the top 10 gambling dApps on EOS found that 75% of traffic was driven by bad bots. That’s around $6 million of transaction volume that wasn’t carried out by legitimate users.
Coming in third place for dApps is Tron, although it actually has the largest amount of active dApp users overall. 82% (338 out of 412) of all Tron dApps stayed active in Q2.
Unlike Ethereum or EOS, Tron seems to have a negative correlation between its token price and active users. The more users its dApps register, the lower the token price – and vice versa. Out of all platforms, Tron grew the most throughout Q2 2019.
Other blockchain dApps
Other dApps worth keeping an eye on are being built on blockchains such as Steem, IOST, and TomoChain. Steem dApps, the report notes, are built as “long-lasting projects”, and all of its active users in Q1 remained active in Q2. However, there was less activity than in prior times and the platform registered a 20% drop in usage.
IOST stunned the community by releasing its mainnet ahead of schedule earlier this year. Its blockchain recorded a total transaction amount of over $20 million, which is three times the amount of Ethereum’s dApps in Q2. Moreover, its user base is growing fast, matching EOS in its first three months at 15,000 users.
TomoChain seems to be more finance-focused with more than 60% of its dApps focused on this vertical, generating 70% of transaction volume. This is perhaps the odd one out of all the examined dApp platforms, which usually tend to focus on gambling and gaming in their early stages.
The numbers don’t lie (unless they’re driven by bad bots). dApps may be taking off slowly, but credit where it’s due. With the exception of Steem, the other five dApp platforms examined registered substantial growth, with Tron emerging as the most active in Q2. Until Ethereum gets a handle on its scaling issues to onboard more users, it’s got some pretty serious contenders in the race.