Tuesday, June 25, 2019

Ethereum Price Stalls As DApp Users Defects To Rival Platforms

Though there has been a recent surge in the price of Ethereum, it cannot be characterized as a product of its usage, but an effect of the surge of Bitcoin value. As revealed by Dapp.com, the second largest cryptocurrency’s network suffered defection in the first quarter of 2019, as users fled the network for rival platforms.

Ethereum Network Desertion

Perhaps, if users would stay loyal to the decentralized applications (dapps) on the network, its price might recover to its former state. The Ethereum network is at an advantage to be the leading DApp amid its rival platforms such as Tron, EOS, and Steem. The data released by DApps.com in the first quarter of 2019 reveals this.

Out of 500 dApps that were added, over 50 percent of them were built on the Ethereum network. According to Dapp.com report “It shows that Ethereum is still the No.1 choice for developers to build their dApp on.”

However, despite its advantages, not all of DApp users use the Ethereum network, but for the gamers only. DApp report indicates that every year, Ethereum suffers a 4 percent decline in the number of Dapp users in the first quarter. The worse part is that fewer than 7 percent of 2018 Dapp users are still using Ethereum in 2019.

Dapp users are supposed to be the main drivers of the blockchain network into the mainstream; however, since Ethereum was invented, there have been many options available in the industry. Users are not thus limited to ETH-based games or transacting in ETH to purchase a virtual good, which would otherwise help to fuel the cryptocurrency’s price.

Also, Texas-based Kyle Samani of Multicoin Capital recently told Bloomberg that “The simple reality is that until the last six-to-nine months, there were no other options besides Ethereum. Now there are.” Further, Crypto hedge fund trader, Travis Kling of Ikigai explained 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.

DApps Transaction Volume

The decline in the usage of DApps on the Ethereum network shows that its rivals rule the market. According to Dapp.com data on Q1 active usage of Dapp, EOS had over 95 percent of its Dapps active. Likewise, Tron and Steem had over 80 percent of their Dapps active. Meanwhile, about 600 Ethereum Dapps were inactive.

So also, on transaction volume, EOS and Tron processed over $1 Billion in the first quarter, while Ethereum, which is the second largest cryptocurrency processed $202 million.

Meanwhile, Ethereum’s Co-Founder, Joseph Lubin noted in his Deconomy 2019 speech the areas that ETH builders are focused on: user onboarding UI and UX, privacy, and confidentiality and scalability.

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