After Bitcoin introduced the world to the concept of decentralized digital money, Ethereum took that a step further with the concepts of smart contracts and decentralized apps (DApps). Scores of projects popped up during the wild 2017 crypto bull run that promised to put these DApps to world-changing use. Now that the speculative bubble has burst, how close have these projects actually got to delivering on their promises?
Here, we take a look at some of the crypto space’s biggest DApp platforms. What kinds of DApps have actually been developed? Who’s using them? And what does the future hold?
First, we’ll take a look at the big players - Ethereum, EOS, Stellar, IOTA, NEO, and VeChain. Then we’ll look at some of the newer platforms that are aiming to take them on.
Ethereum is the original DApps platform, and its market cap is still far higher than any coin other than Bitcoin. While Ethereum has experienced a sharp decrease in value during this year’s bear market, its devaluation hasn’t been as extreme as most of the other projects we’re looking at here. However, it continues to trend downward, recently breaking below $300 for the first time in almost a year. The last few months have shown it would be foolish to predict any floor on just how low it could go.
DApps on Ethereum
Hundreds of DApps have been launched on the Ethereum network, but none have yet achieved anything approaching widespread use. StateoftheDApps.com ranks Ethereum DApps by number of users within the past 24 hours, and at the time of writing, none have exceeded 2000 users.
The most popular DApps by far are used to access decentralized exchanges (DEXs), with IDEX having 1,952 users, and ForkDelta having 1,292. Similar projects like BitEye (565 users) and Bancor (467) are also among Ethereum’s most used DApps, and the heavily-hyped OmiseGO (831) project ranks among these most popular DEXs.
Some of the most attention-grabbing Ethereum DApps have been games like Etheremon and CryptoKitties, which allow users to generate and trade unique crypto creatures, with ownership recorded via the blockchain. CryptoKitties in particular drew a lot of attention when it was first launched, with some of the game’s characters exchanging hands for upwards of $100,000. The Ethereum network slowed to a crawl due to congestion caused by CryptoKitties when the game’s popularity was at its peak, but that popularity has since dwindled, with Fortune reporting that the median value of each Kitty fell from $41 in December to $5 in May, while daily users have fallen from 14,000 at the peak to 322 at time of writing.
The Future Outlook
Ethereum remains by far the most popular DApps platform. It’s still a long way from mainstream adoption, but network effect means Ethereum has to be considered the DApps platform most likely to first achieve widespread use.
The Ethereum network still suffers from issues such as congestion during periods of heavy use, which could severely limit the functionality of DApps deployed via Ethereum. However, solutions such as sharding have been proposed that could help Ethereum overcome these issues in the near future. It’s also worth noting that no other network has received Ethereum’s level of use, so Bitcoin is the only blockchain which has received a comparable level of stress-testing.
EOS is one of very few crypto projects to attract any level of new hype during 2018, differentiating itself from Ethereum by focusing on being a blockchain and DApps platform for commercial and industry-led projects. One of the key differentiators between EOS and Ethereum is its implementation of a delegated proof of stake (dPoS) consensus model, as opposed to the proof-of-work (PoW) mining-led consensus model pioneered by Bitcoin and used by Ethereum.
Hype surrounding EOS’s potential and then-upcoming mainnet launch saw its value rise from a low of around $5 in late March to highs above $20 by late April, but the price has since fallen to below $5 again amid mass confusion over the suspension of 27 nodes and general uncertainty around the project in general.
It’s beyond the scope of this article to delve into the complex arguments for and against EOS’s overall credibility, but no other coin has soared and fallen as dramatically as EOS has so far in 2018. To what extent these are symptomatic of flaws with EOS itself or just side-effects of an overall air of negativity surrounding the crypto space following 2017’s insane bull-run is a matter of vigorous debate.
But there are reasons for optimism. The Chinese government-backed China Electronic Information Industry Development (CCID) has twice ranked EOS as the best blockchain platform in the categories of Applicability, Innovation, and Technology. There are more than 100 DApps currently being developed for EOS, with many of these being projects having been attracted to EOS from Ethereum.
It’s too early to say whether EOS will be the Ethereum killer it was initially touted as, but if it come overcome the negativity surrounding the platform since the mainnet launch, it is undoubtedly one of Ethereum’s most serious rivals.
Stellar has consistently be vying with the likes of Ripple, EOS, and Bitcoin Cash to be ranked just beneath Ethereum and Bitcoin in terms of market cap. It has long been considered one of the projects with the most serious long-term potential, thanks in no small part to the team behind. The project was launched in 2014 by Jed McCaleb, founder of the Mt.Gox exchange and a co-founder of Ripple.
While Stellar was originally conceived of as a crypto payment solution, it’s focus on providing low-cost transfers has made it an attractive platform for the development of DApps.
A recently-launched French ICO for a knowledge exchange market has chosen Stellar due to the fact it's as much as 100,000 times more cost effective than Ethereum. Facebook were even recently forced to deny they were considering developing on the Stellar network .
Stellar is open-source and provides many tools aimed at encouraging the development of DApps on its platform. While Stellar still lags far behind Ethereum in terms of actual use of its platform, it has the potential to be a serious contender.
Towards the tail-end of the 2017 crypto bull run, networks based on directed acyclic graph (DAG) technology absolutely exploded in value. Using a transaction verification model which IOTA refers to as ‘the Tangle,’ transactions are verified by other peer transactions within the network, rather than the top-down verification model exemplified by the use of miners on the Bitcoin and Ethereum networks.
This means that transactions conducted using IOTA should become faster and cheaper as network use increases, which is the exact opposite of what happens during network congestion bottlenecks with Bitcoin and Ethereum.
IOTA has arguably the most impressive list of mainstream partnerships in the crypto space, with the likes of Fujitsu, Volkswagen, and Bosch among these said to be looking at integrating IOTA compatibility into their products.
In recent months, IOTA unveiled its Qubic project to create a decentralized global supercomputer utilizing the network, capable of acting as an oracle and deploying smart contracts.
Coupled with its use of DAG technology and the interest mainstream companies have shown in it, IOTA has almost limitless potential. But that is all that IOTA has at the moment - potential. And it should be noted that a recent Tweet from Volkswagen mentioned IOTA alongside Ethereum and Bitcoin when hyping potential future integration of crypto-based Internet of Things (IoT) connectivity within their vehicles; check out @VWGroup’s Tweet:
One disadvantage IOTA currently has over Ethereum and Stellar is it offers no publicly available toolkit for DApp developers looking to design DApps for deployment on the IOTA network. However, if IOTA’s mainstream partnerships pay-off, that might be of minor importance in its future success as a DApps platform.
NEO & Ontology Network
NEO has often been referred to as “the Chinese Ethereum” due to it offering similar capabilities for deploying smart contracts and DApps. However, like EOS, NEO has been keen to differentiate itself from Ethereum by placing a heavy emphasis on gaining real-world application and business use. In NEO’s case, this has meant a commitment to being fully compliant with any Chinese government regulation.
The value of NEO itself initially held strong while the cryptocurrency market contracted. Despite some big swings, NEO was mostly at above $100 until March. However, a sharp recent decline has seen NEO dip below $15 for the first time in more than a year.
NEO has come closer than any other platform to matching Ethereum in terms of projects launched within its ecosystem. During the latter half of 2017, NEO’s native NEP-5 tokens experienced some of the biggest increases in value. DeepBrain Chain, an ambitious project to offer cloud-hosted artificial intelligence capabilities, increased from around 7 cents to 60 cents per token within 10 days of being listed on the KuCoin exchange. This early interest wasn’t sustained and DeepBrain Chain became one of the bear market’s biggest casualties, tumbling to a little over 1 cent per token at time of writing.
Primarily focused on identity verification and data exchange, the Ontology Network is arguably the most important project deployed over the NEO blockchain. Ontology was distributed as a free airdrop for NEO holders in March. Like EOS, Ontology is one of the few crypto projects to see a significant price increase in 2018, soaring from $2.52 on launch to over $10 in May. However, it has since followed the downward trajectory of the overall market, sitting at around $1.50 at time of writing.
There are multiple reasons for NEO’s recent decline, aside from the bear market being experienced by all cryptocurrencies. There have long been concerns over NEO’s centralized nature, as well as uncertainty over whether it has the approval and support of the Chinese government. Given its focus on being a Chinese-based regulatory compliant blockchain for the future smart economy, this could be critical for NEO’s long-term success. NEO has a higher barrier for entry to developers than Ethereum, although this is in some sense a benefit, as NEO is much less likely to be plagued by the kinds of scam ICOs that have been launched via Ethereum.
A big driver of NEO speculation during the 2017 bull run was the potential returns it offered by allowing holders to generate GAS, which would be used to fuel activity within the NEO ecosystem. But many early supporters have come to realize that a large stack of NEO is needed to generate meaningful returns with GAS.
A final problem for NEO is confusion between itself and the Ontology Network. Since its tokens were distributed to NEO holders, Ontology has moved to its own mainnet. Both projects are led by Da Hongfei, and there has been much chatter among holders over which project is considered the bigger priority.
These misgivings aside, NEO established a large community throughout 2017, epitomized by its City of Zion developmrny community. NEO is one of few projects which has delivered a functional ecosystem capable of supporting real-word use of DApps. It’s therefore in a strong position to deliver on real-world adoption of DApps deployed on its network. Now that the rampant speculation of the 2017 bull market has been consigned to memory, NEO will live or die on adoption of the DApps deployed within its ecosystem.
VeChain is a supply chain token which looks to verify products through blockchain-based verification of implanted RFID chips. This is an ingenious use of blockchain with huge potential, ranging from authenticating designer clothes to overcoming the problem of fake baby formula being sold in China. But VeChain has also branched out beyond this in the build to its mainnet launch, positioning itself as a DApps platform, and wooing the likes of DBet over from Ethereum.
As with NEO’s GAS, VeChain rewards holders with secondary token - VThor - which is the lifeblood of transactions conducted within its ecosystem. VeChain recently moved from being an ERC20 token to its own mainnet, along with a mobile wallet that is allowing users to generate VThor for the first time.
VThor has yet to listed on exchanges, so its yet to be seen how good of a return on investment VeChain holders are likely to experience. VeChain’s value has more than halved since the mainnet went live, despite its value already being far below its bull run highs.
The first ICOs have also gone live on VeChain, but they aren’t the type of marquee projects that would be needed to breakthrough the negativity of the current bear market. MustangChain, aiming to disrupt the high-end horse market, and Japanese ATM firm BitOcean are unlikely to make a major short-term impact given current market conditions.
But there may be much bigger things on the horizon. VeChain’s backers and investors include accountancy firm PricewaterhouseCoopers (PwC) and Jim Breyer, considered a hugely influential venture capitalist with close ties to the Chinese government. Only IOTA has been attached to a similarly impressive array of partners and potential users.
An example of VeChain’s potential is the MyStory app being developed in conjunction with DNV GL, which will track the distribution of Italian wines within China.
Other DApp Platforms
Looking at the current status of some of the biggest and most hyped DApp platforms in the crypto space, it’s clear we’re still a long way from real-world use and mainstream adoption. And there are many more projects looking to seize ground from these more established names.
0x is currently just outside the top 20 cryptocurrencies by market cap and has received hype comparable to many of the biggest blockchain projects. DApps have already been deployed on its network, including Bounty0x, which allows software developers to post bounties for finding bugs within their projects. Much speculation has stemmed from rumors linking 0x with Goldman Sachs and a Coinbase listing. While these hyped events haven’t come to pass, 0x’s scalability solution of off-chain transactions make it a serious long-term contender to Ethereum’s current supremacy.
Wanchain is seeking to create a distributed marketplace of digital assets. Like EOS, Wanchain has positioned itself as a platform better suited to serious real-world businesses and financial transactions than Ethereum.
Elastos is looking to integrate DApps with a smartphone operating system, which could be a gamechanger if they are to partner with any major device manufacturer. Integrating DApps into devices that everyone uses may be the ‘killer app’ required for real-world adoption.
Nebulas aims to make DApps more accessible by indexing them within an easy-to-use search engine. This could be an important step toward real DApp adoption, as most Ethereum holders are probably completely unaware of even the most popular apps currently operating on Ethereum’s network.
TrustNote provides a user-friendly platform that allows non-expert users to create their own tokens and digital assets within minutes. TrustNote is based on similar DAG technology to IOTA, thus solving the problems of scalability and transaction congestion currently plaguing Ethereum.
The Final Verdict
Many comparisons have been made between the dotcom bubble and the highly speculative crypto bull run of 2017. Just like the dotcom bubble, 2017’s speculation far outstripped any sort of real-world adoption.
This means that if blockchain-based DApp platforms are as revolutionary as many people believe, the growth potential for the most successful platforms is enormous.
But it's still impossible to tell which projects will prove to be the DApp and crypto spaces Amazons, Googles, and Facebooks, and which will be its GeoCities and Pets.com. The only true indicator will be real-world use and adoption over the long term.
The speculative bubble of 2017 has definitely burst and projects can no longer thrive on hype alone. All the projects examined here now need to focus on real-world adoption.