Although there was an increase in the number of Dapps launched during the 2018 bear market, a new report by Fluence reveals a sector that defies easy characterization.
The new Fluence report titled the ‘State of Dapps Ecosystem, Technology and Adoption 2019‘ attempts to establish a clearer picture of what has proven to be a somewhat opaque sector – something which was evidenced by the difficulty Fluence had in getting Dapp creators to even participate in its sector survey.
The Dapp statistic platform State Of The Dapps shows that the number of Dapps on the leading smart contract platforms comes in around 2600 projects. However, to focus the study, the Fluence team narrowed the definition of a Dapp to any application that is governed by a smart contract as well as those applications which focused on the needs of the end user. As a result, only 1,624 Dapp projects were considered in the study, and of those only 900 projects provided contact details. Ultimately, only 160 projects responded to Fluence and participated in the survey.
Most Dapps less than a year old
The study found that most Dapps showcasing an active user base were launched in 2018. Out of the respondents who answered the questionnaire, 72 percent were less than a year old. Conversely, the report showed that only 28 percent of active Dapps were created before or during 2017. In terms of the blockchain they operate on, Fluence found that "the majority of Dapps used Ethereum (87%), with EOS ranking second (19%) and TRON ranking third (8%)."
One of the major challenges raised by developers working on the Ethereum platform is having to use a number of tools to connect to the network. While most of the respondents used Infura, a number admitted to having to use multiple technologies to reach the Ethereum blockchain. Many developers explained that a lack of adequate connectivity led to malfunctioning Dapps and ultimately a bad user experience — a factor that may have contributed to the significant portion of respondents who were developing their decentralized applications while employing a multi-chain infrastructure.
Somewhat ironically the report also found that even in the blockchain sector, which holds decentralization in high esteem, it seems that centralization is a necessary and almost inescapable phenomenon. Fluence found that 48 percent of the survey respondents employed a traditional cloud to run their underlying software and most of the Dapps were utilizing a web-based front-end. Additionally, 32 percent used decentralized storage solutions like IPFS while 31 percent employed centralized content delivery networks. A similar scenario was found with regard to databases with 25 percent employing decentralized lists and 31 percent the opposite.
Uncertain business models
On user activity, Fluence found that over half of the Dapps were on the lower scale of active users. The report states that 58 percent of Dapps had less than 50 daily active users although there were a few star performers with 12 percent of projects having more than 500 daily active users.
Some surprises too with funding models, as the report found that self-funding and crowdsales were the top funding tools for 2017, coming in at 38 and 31 percent respectively. In 2018, both the number of projects which received either VC funding or raised money through an ICO reduced. In fact, the majority of the Dapps launched in 2018 were self-funded. "The biggest difference between 2017 and 2018 is that the number of self-funded Dapps has grown almost four times," the report states.
While the Fluence report does shed light on the lower financing metrics of the Dapp sector, it also provides a different view on the current state of the cryptocurrency sector. While in general terms asset prices tanked in 2018, developments in the Dapp universe have continued apace driven it seems by the passion of developers and quite disconnected from the huge capital raises of many ICO projects.