Decentralized applications (dapps) are one of the primary focuses of smart contracts platforms and provide a glimpse into the adoption of specific platforms among users. Smart contracts platforms are facing daunting scaling challenges — like Ethereum –, arose out of the desire for more scalable applications, such as EOS, or are still under active research and development.
Each smart contracts platform offers unique advantages and is hindered by explicit trade-offs in platform design. The dapps that run on top of them will ultimately determine the success or failure of the platforms as they attract new users and build a social consensus around the platform’s ecosystem.
Dapps offer some profound advantages over traditionally centralized applications including censorship resistance, trust-minimization, provable scarcity of resources, and P2P interactions. From games to decentralized exchanges, dapps are increasingly prevalent among smart contracts platforms. Analyzing their metrics provides some useful insights into the current landscape of dapp development and the growing community of cryptocurrency users.
Focusing on public blockchains with smart contract functionality that are fully live, we will evaluate Ethereum, EOS, and TRON based on the fact that they have the most extensive dapp metrics available via two of the best analysis sites; DappRadar and StateofTheDapps (SoTD). POA will also be briefly analyzed, but its negligible user and volume metrics via SoTD preclude if from the discussion of dapp adoption.
Relative Dapp Growth
According to SoTD, there are more than 2,200 total dapps among EOS, POA, and Ethereum (mostly Ethereum and EOS) with EOS dominating daily active users at 41.84K compared to Ethereum (2nd) at 9.62K. More than half of the 2,200 dapps are live at 1,200 and a further 600+ either are a work in progress, in beta testing or the prototype stage.
Gambling and gaming dapps dominate the total number of dapps across the platforms while storage and exchange dapps lead daily active users by a substantial margin at 45.62K and 45.33K, in total, respectively.
The total number of dapps peaked in September but have continued a strong push upwards, representing a 182 percent increase in overall development since December 2017. Despite a promising outlook, more than 300 dapps have been abandoned and the user metrics for most of the live dapps are so small that they are irrelevant.
Ethereum has been surpassed by EOS in most metrics, demonstrating how scaling woes have hindered adoption of dapps on the established smart contracts network. Further, total daily dapp users on Ethereum have declined over the last few months to lows of roughly 8,500 daily active users, mirroring levels in August earlier this year, according to DappRadar.
The scalability problems of Ethereum are well-known and, not surprisingly, most likely the driving factor behind EOS’ dapp proliferation. Where EOS made trade-offs in decentralization, Ethereum has made trade-offs in scalability, part of the scalability trilemma.
There is currently only one Ethereum dapp with more than 1,000 daily active users, IDEX, a popular decentralized exchange (DEX). The SEC’s recent ruling against the EtherDelta founder muddles the future operation of DEXs too. The SEC may pursue IDEX under a similar pretense. If the SEC’s pursuance of DEXs contributes to a marked decline in their popularity anytime soon, then Ethereum’s dapp usage will be negligible. According to DappRadar, only one more dapp has more than 500 daily active users on Ethereum in the last 24 hours — ForkDelta — another DEX.
Ethereum’s future scalability solutions will play a considerable role in the evolution of the broader cryptocurrency market. If the proposed solutions — such as Ethereum 1X or Plasma — are delayed any further, other smart contracts platforms may see permanent retention of Ethereum users transitioning away from the platform. That being said, Ethereum still has the largest community of developers among smart contracts platforms, and it is the fifth fastest growing open-source project on Github.
EOS is currently dominating dapp activity among smart contracts platforms, which may be hard for strong proponents of decentralization and censorship-resistance to hear. Ethereum holds the crown of total dapps and smart contracts deployed still, but that is primarily due to its first-mover advantage and established network effects. EOS has significantly more daily active users, transactions over the last 24 hours, and total 24-hour volume according to both DappRadar and SoTD.
For comparison, Ethereum’s top dapp by volume — IDEX — processed approximately $440,000 in ETH over the last 24-hours while EOS’ top dapp by 24-hour volume — BetDice — processed approximately $14 million, at current prices. Moreover, there are a further 10 dapps on EOS that surpass Ethereum’s IDEX in 24-hour volume, most of them by a substantial margin. Daily active user numbers do not look much better for Ethereum either as EOS has 11 dapps with more than 1,000 daily active users compared to Ethereum’s one.
An interesting side note about EOS dapps is that the vast majority of the top dapps are gambling dapps interspersed with a few games. Conversely, Ethereum’s top dapps are mainly exchanges and games.
EOS’ growing dominance in dapp metrics represents the premium users are placing on scalability. In the long-term, scalability will be overcome, and user retention based on exciting and user-friendly applications should become the leading narrative for garnering user attention. However, EOS is poised to continue pulling in new dapp users for the time being. Whether or not you agree with DPoS consensus or are concerned about the recent controversy with vote buying in governance, it is clear that users prefer scalable dapps to censorship-resistant ones.
Such a notion is bizarre, considering the primary benefits that dapps confer are security, decentralization, and censorship-resistance, but the numbers are hard to ignore at this point, and the gap is widening.
POA is actually an Ethereum sidechain utilizing Proof-of-Authority (PoA) consensus, making it an intriguing proposition. The bridge between Ethereum and POA allows for easily porting over development code for smart contracts and dapps from Ethereum. According to POA, their blockchain is three times faster than Ethereum, and the native POA token is interchangeable with Ethereum via the POA20 cross-bridge token.
Taking this into account, POA offers regular Ethereum developers and users looking for scalability solutions the ability to transfer to the sidechain as a temporary — or perhaps long-term — answer to scalable dapps that are EVM compatible. Moreover, many developers and users that are hesitant to use EOS may see POA as one of the few available viable alternatives, and its interoperability with Ethereum a bonus.
However, POA’s user numbers and total volumes are tiny (i.e., the top dapp has 14 users in the last 24 hours) and not worth mentioning in the context of adoption yet.
TRON has been making some small headway among dapp users, although nothing impressive. TRON users are also mostly relegated to gambling dapps with a precipitous drop off in daily active users for other dapps such as gaming. The top 3 TRON dapps (by 24-hour users) are all gambling apps and include:
- TRONbet – 1,762 daily active users
- TRONDice – 1,167 daily active users
- DiceBet – 899 daily active users
TRONbet processed roughly $3.03 million over the last 24 hours with TRONDice and DiceBet far behind at approximately $176,000 and $149,000, respectively. After the above three gambling apps, user numbers and 24-hour volumes drop dramatically to irrelevant levels.
TRON recently announced a $100 million gaming fund for dapp games on its platform called TRON Arcade in an attempt to foster adoption by developers and users. TRON’s primary market is China, and the sentiment around the platform there is difficult to gauge. TRON launched with controversy and has maintained a focus on becoming a content distribution and gaming dapp platform since. Notably, TRON founder — Justin Sun — also contentiously acquired BitTorrent — the massively popular P2P network — earlier this year, and the two platforms are currently undergoing an integration process.
TRON has some sizeable obstacles to overcome in the view of the broader market sentiment towards the platform. However, it only recently launched earlier this year and has potential in the Chinese market, along with NEO. For now, its dapp metrics are not very notable among smart contracts platforms. Maybe the massive incentives offered in the TRON Accelerator program and TRON Arcade can change that.
Overall, dapp metrics at this stage for smart contract platform usage are very poor, while general development of dapps is showing a healthy and consistent increase. EOS may have surpassed Ethereum in daily dapp activity, but it still pales in comparison to traditional application numbers and sacrifices some of the primary components of a decentralized network that confer advantages to dapps.
If Ethereum takes a prolonged period to scale to meet dapp demands effectively, then the best chance for a scalable and ubiquitous dapp ecosystem is likely with next-generation, interoperable smart contracts platforms and multi-chain frameworks, such as Cosmos. TRON and EOS face some significant hurdles stemming from the paths they took to launch, while other platforms like Cardano and Zilliqa are still under development, with research aspects still ongoing as well.
There are myriad developments on the horizon in the blockchain arena that are impossible to predict how they will unfold. Evaluating the current dapp landscape reveals that — while dapp usage is growing — enormous strides need to be made to even enter the discussion as providing a usable alternative to mainstream app users.