Here’s a question. How many active users does CryptoKitties, one of the most well-known decentralized Ethereum applications (DApps), have? The answer is probably a lot less than you think.
The game, originally created by Canada-based venture studio Axiom Zen, burst onto the DApp scene last year, and in almost no time at all the game was drawing headlines both for the prices that users were willing to pay to acquire these cute crypto-collectibles -- in some cases more than $100,000 per cat -- and for the fact that CryptoKitties-related transactions had single-handedly clogged the Ethereum blockchain.
Last month, CryptoKitties raised $12 million in a Series A round led by Andreessen Horowitz and Union Square Ventures (USV), with USV co-founder Fred Wilson declaring that crypto-collectibles represent the first “big consumer use cases for blockchain technologies.”
However, as venture capital firm Greylock Partners notes in its latest “State of the DApps” report, the number of active DApp users is shockingly low, even for high-profile games like CryptoKitties.
Citing data from DappRadar, Greylock community lead Chris McCann reports that CryptoKitties has fewer than 1,000 daily active users. Granted, interest has sharply declined over the past few months, but he estimates that even at its peak the DApp likely only had about 14,000 daily users. Neopets, a game to which CryptoKitties is often compared, once had as many as 35 million users.
Nor have any other DApps emerged as stand-out platforms. IDEX, a decentralized ERC20 token exchange (DEX), has 3,600 active users, making it the most widely-used DApp, while fellow DEX Fork Delta boasts 2,900. The most popular blockchain game, Ether Goo, has just 2,100 daily users.
Based on this data, Greylock posits that the DApp space is still “orders of magnitude” away from anything resembling widespread consumer adoption and that investment in the space is just as speculative as in the cryptocurrency industry writ-large.
“We are orders of magnitudes away from consumer adoption of DApps. No killer app (outside of tokens and trading) have been created yet. Any seemingly “large” DApp (ex. IDEX, CryptoKitties, etc) has low usage overall,” McCann concluded. “All of the top DApps are still very much about speculation of value. Decentralized exchanges, casino games, pyramid schemes, and even the current collectible games (I would argue) are all around speculation.”
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