The Changing Face of DApps: Which DApp Categories Are The Strongest?
DeFi volumes are rising as gaming dApps appear to have peaked.
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It’s no secret that decentralized applications are growing in popularity. Right now, there are about 3,000 dApps in existence, primarily scattered across Ethereum, EOS, and TRON. Fans of blockchain tech believe that dApps can challenge traditional web apps – but there’s little agreement on which dApp categories hold the most promise.
Enter DApp.com, one of the most notable dApp listing sites. Dapp.com publishes quarterly reports on the dApp market, and this month, it published its newest findings. We’ve already taken a look at some of the most recent stats, but now, we’re digging deeper in order to connect the dots between the past and present.
Gambling Apps Are Still a Major Force
Gambling is one of the most popular dApp categories. However, it is easy to underestimate the popularity of gambling dApps, since they don’t actually account for the majority of dApp listings. In January 2018, gambling dApps accounted for just ten percent of dApps. Even today, gambling apps only account for around 30 percent of all dApp listings.
But even though gambling apps only make up one-third of all dApps, they enjoy significant levels of activity. Overall, gambling apps account for 56 percent of dApp transactions, 47 percent of dApp volume in U.S. dollars, and 35 percent of dApp users. These numbers are down slightly from Q2, but gambling apps still dominate usage stats.
There are a few reasons that gambling apps are so popular. For one thing, they are provably fair, meaning that smart contracts and payout transactions can be audited. Additionally, gambling apps provide a way for users to bypass gambling restrictions. Finally, TRON’s dedication to gambling apps is keeping overall stats high.
The Gaming Boom Has Come and Gone
Blockchain-based games appear to be a dApp category in decline, at least by some measures. In early 2018, games accounted for 20 percent of all dApps. Then, their popularity surged. In March 2018, they briefly accounted for more than 50 percent of dApps before gradually losing their dominance over the remainder of the year.
Currently, games account for roughly 20 percent of all listings. Furthermore, their usage statistics are quite low. Dapp.com’s reports show that games now account for just 11 percent of dApp users and 17 percent of transactions. On top of this, games have a very small share of overall dApp volume–almost imperceptible, in some cases.
Despite widespread efforts to promote dApp games, there is one reason they might be underperforming. Much of their volume is locked up in collectible items, only some of which have high volumes. Additionally, games may take more time to develop than other dApps.
DeFi Apps Suddenly Surge In Volume
DeFi apps are enjoying an interesting rise in popularity. They started from almost nothing. In 2018, they accounted for less than ten percent of dApp listings. In Q1 and Q2 of 2019, they accounted for about three percent of all listings. During this period, DeFi apps also had almost no volume, users, or transactions compared to other dApp categories.
However, things are starting to change. DeFi dApps still only represent about four percent of dApp listings, but they have experienced a surge of activity. In Q3, they accounted for 14 percent of dApp users and 26 percent of dApp volume. Since DeFi apps still handle very few transactions, this suggests that users are making large, long-term investments in these apps.
As Dapp.com has noted, this trend has been largely driven by Ethereum’s DeFi apps–in fact, Ethereum alone accounted for 88 percent of the volume in the finance category. Dapp.com also notes that two DeFi apps are particularly prominent: MakerDAO, a stablecoin issuance platform, and Nest, a decentralized mortgage platform.
Can You Trust DApp Data?
DApps can’t be categorized impartially. Not only do categories lack absolute definitions, but different listing sites may also list different apps. DappReview, for example, estimates that gambling (or casino) apps make up 50 percent of listings, contrasting with Dapp.com’s 30 percent. Plus, bot activity and referral schemes can produce false usage data.
Though we haven’t necessarily come to the same conclusions DApp.com has, nor have we covered every aspect of their report, it does seem that the broad strokes of DApp.com’s reports are accurate. In particular, gambling apps have a significant presence, games have a modest presence, and Ethereum-based DeFi apps may be in the midst of a breakout trend.