2018 August 20/27 - Volume.2 Issue.33 & 34

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2018 August 20/27 - Volume.2 Issue.33 & 34

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Decentralized Apps Facing Half-Life After Peak

Decentralized Apps (Dapps) are facing problems in maintaining a userbase. The largest Dapps being used currently are exchanges. And if it’s not an exchange, the majority of live Dapps are geared towards platforms catering to speculators. What does seem to be happening is a massive user drop after peak. Few projects have been able to sustain adopters.


Aside from some random bursts of interest in gambling applications or games, which account for most type of Dapps, volumes have been mostly on token exchanges, with the top 3, IDEX, Fork Delta and Bancor eating for the lion’s share.

However, trading volume aside, which still stands miniscule compared to centralized exchanges, users are abandoning Dapps at quick pace (see chart). This hasn’t hindered entry prospects with Coinbase’s purchase of Paradex, and Binance also eyeing the launch of their Decentralized Exchange.

|| REALITY IN CHECK.

Augur which launched a little over a month ago is no exception despite being one of the most awaited projects. Joey Krug, co-founder of the Augur has taken a sober look at the problems the predictions platform faces. "Right now, if you want to use Augur you have a few fees….Add them up you get 11%, making the pay-out ratio on Augur be 89% or worse if you account for spreads. Fixing costs, fees is in my opinion the difference between a fun toy and something that’s actually useful.

I always used to say that when Augur launched it’d be expensive, slow, and difficult to use but hopefully it works at a core level. It does work at a fundamental level now.”

However, the majority of fees that Mr Krug mentions (On-ramping of ETH, Volatility, ETH Gas Fees) aren’t only applicable to Augur, but all Dapps, making the value proposition much harder for the end user who already has to go through multiple channels before ending up on any platform.

|| REALITY OUT OF WHACK

It's a bitter pill to swallow for investors who have backed Cryptokitties with $12Mn, only to see its user base drop 96% within months. However, as far as live platforms backed by major investors are concerned, numbers are even more staggering.

Bancor, which raised a whopping $153Mn peaked at 1747 users on a single day. It's user count is now 76% less (see table). And as far as audiences go, that's the good news. Digital Currency Group backed Decentraland, which raised $25Mn in 35 Seconds, peaked at 163 transacting users on a single day. Its network market capilization stands at $70Mn.

Of course, it's early days. And Decentraland has earmarked $5Mn to finance game studios to develop on it's platform. But Dapps are suffering from an unintuitive, slow, multi-step user experience that will make finding new adopters with current infrastructure difficult at best.

Peak Number of Daily Users on Top 3 Dapp Exchanges


Dapp User Count Drops 56% From Jan-High*


Notes: * Excluding Fomo3D & PoWH 3D. 38% Drop Including.


Augur Users Drop Off


Source: Dappradar.com


Major Investors Live Dapps Status

wdt_ID Dapp Key Investors Raised Market Cap. Peak Current % Drop
1 CryptoKitties A16Z, DCG $12Mn - 14194 510 -96
2 Bancor Blockchain Capital $153Mn $82Mn 1747 457 -74
3 Kyber Network Julian Sarokin $49Mn $57Mn 422 165 -61
4 Numerai Fred Ehrsam, USV $7.5Mn $8.4Mn 419 14 -97
5 AirSwap B.Pierce, M.Novogratz $36Mn $12Mn 172 45 -74
6 Decentraland DCG $25Mn $70Mn 163 23 -86
7 LivePeer DCG, Pantera - - 46 33 -28

Note: User count reflects unique addresses with transactions on the platform, not visitors.


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