The ethereum price has ballooned by nearly one-third so far in April, but without bitcoin’s bullish tailwind, ETH might be stuck in a rut.
According to Dapp.com, the second-largest cryptocurrency’s network suffered defections in Q1 2019 as users fled the network for rival platforms. If users would only stay loyal to decentralized apps (dApps) on the Ethereum blockchain, the ETH price might finally recapture its former glory.
As one of the largest and most high-profile blockchains, Ethereum has every reason to be leading the dApp race against rival platforms such as Tron, EOS, and Steem. And by some data points, it is. Of the more than 500 dApps that were added to Dapp.com in Q1 2019, more than 50% of them were built on Ethereum.
“It shows that Ethereum is still the No.1 choice for developers to build their dApp on,” according to Dapp.com’s report.
Here’s the rub. With the exception of gamers, which is one of the most popular categories for decentralized apps, not all of Ethereum’s dApp users stick around. Ethereum suffered a 4% year-over-year decline in the number of dApp users in Q1. Worse, fewer than 7% of 2018 dApp users are still using Ethereum in 2019. Out of all the categories of dApps, gamers are ETH’s most loyal bunch.
Decentralized apps are supposed to be what catapult the blockchain into the mainstream. But since Ethereum first came on the scene, gamers and other dApp users have more choices. They’re not limited to ETH-based games or transacting in ETH to purchase virtual goods, demand for which would otherwise help to fuel the cryptocurrency’s price.
Austin, Texas-based Kyle Samani of Multicoin Capital recently told Bloomberg:
“The simple reality is that until the last six-to-nine months, there were no other options besides Ethereum. Now there are.”
Crypto hedge fund trader Travis Kling of Ikigai stressed in the same report that the ETH price is at risk of being negatively impacted as other blockchains “gain traction” among developers, users, and dApps.
So if Ethereum isn’t winning over the dApp users, who is? Let’s look at Q1 dApp active usage on the leading blockchains. According to Dapp.com:
Adding insult to injury, EOS, and Tron “processed over $1 billion in transaction volume” in Q1. The second-largest cryptocurrency, which has been plagued with scalability issues, had transaction volume of $202 million.
Ethereum Co-Founder Joseph Lubin, who is also the founder of ConsenSys, noted in his Deconomy 2019 speech the areas that ETH builders are focused on:
Rome wasn’t built in a day, and neither is Ethereum. Lubin points out that it’s the “largest blockchain ecosystem by a variety of measures.” Gartner analysis says that Ethereum’s developer ecosystem is 40x bigger than that of IBM’s Hyperledger Fabric. Now only if the ETH price would catch up to the “buidling.”