According to a study by crypto research publication diar, the usage of decentralized apps (Dapps) on Ethereum has been declining sharply, with users declining 56% from January 2018 to July 2018.

There are Dapps built on other platforms, but this study focuses on Ethereum Dapps, which is the most widely used platform for launching them.

Ethereum is the original blockchain and cryptocurrency used to develop Dapps and is the second cryptocurrency by rank with a market cap near USD 28 billion versus the Bitcoin market cap of USD 109 billion. Ethereum has complex and efficient smart contract technology, which is why it’s so conducive for Dapp development. However, the numbers show that they are not maintaining their user base and shriveling up over time.

This may be why Ethereum’s price has dropped to USD 270 from a high of over USD 1,300 in January 2018, combined with a strong bear market. Ethereum is declining much faster than Bitcoin, indicating that declining users account for the rest of the price drop. The more users, the more Ether is purchased to interact with Dapps, so Ethereum’s price is directly influenced by the number of people using them.

The top Dapps are actually ponzi scheme scams called Fomo3D and PoWH 3D, which have nearly 100,000 users versus the total of 325,000 users in July 2018. The study didn’t include these ponzi schemes in its data, probably because they could be considered illegal activity. If including the ponzis  then total users has only declined 38% since January.

The top 3 Dapps are decentralized exchanges, like IDEX, Fork Delta and Bancor. The userbase for these exchanges hit a peak and then dropped off sharply, perhaps showing a preference for more user-friendly centralized exchanges.

Games are another top category on Ethereum. CryptoKitties, for example, became a sensation in the crypto space when it had over 14,000 users and raised USD 12 million. Today, it only has 510 users which is a 96% drop. Decentraland has seen a similar user drop of 86%.

The drop in Dapps usage paints a bearish long-term outlook for Ethereum. However, when the next crypto rally happens, perhaps usage will rally as well. There is probably a solid connection between the state of the crypto markets and interest in Dapps.

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Image Courtesy: Pixabay
Comments are closed.

Check Also

Biggest Bitcoin Mempool Since January 2018 Cleared in Only 2 Days

On 15 November, the Bitcoin mempool saw its biggest flood since January 2018, with the mem…