Ethereum's Strong Growth Shows That DeFi is a Killer App
Over the last year, Ethereum dApps have skyrocketed in terms of usage, largely thanks to an increase in interest in DeFi (decentralized finance) applications. Contrastingly, EOS and Tron, other dApps platforms, have had the dApp usage all but collapse. Ethereum’s strong growth shows that DeFi is a killer app - here’s why.
According to a new report from DappRadar, the total amount of ETH locked into their dApps reached around $1.9 billion in February of this year - that’s an increase of 27% in only one month. Daily activity, as in the number of unique wallet users, grew by 8% month-on-month. This shows that more users are engaging with dApps, and using them consistently.
Over the last year, the amount of Ethereum locked into dApps has grown considerably. From Feb 2019 to Feb 2020, the value of assets locked into ETH dApps grew by a whopping 683%. The number of active daily wallets increased by 104%. DeFi dApps were the reason behind most of this growth. DeFi dApps allow you to borrow, lend and trade money over the decentralized Ethereum blockchain. These dApps alone grew 294% over the year. Ethereum games and marketplaces dApps were also strong - growing 114% in a year.
EOS is struggling
Comparatively, EOS is really struggling. The EOS blockchain suffered from congestion over several months, which made it incredibly hard for users to transact or use dApps. Daily activity plunged 80% during that time period, and gambling dApps saw an even bigger drop of 90%.
Tron not much better
Tron has seen a bit of an uptick in usage of its gambling dApps over the past year, but it had a major decrease in users in the games and marketplaces categories. However, it did manage to see some growth over the past year - an impressive 18%.
In the past year, both cryptocurrencies have fallen by market cap. EOS has fallen from 4th place to 8th place (at the time of writing). Tron fell from 9th place to 14th (at the time of writing). Contrastingly, Ethereum’s strong growth shows that DeFi is a killer app - and it’s saving them.
Ethereum 2.0 and scalability
Etheruem has been gearing up for the implementation of its Ethereum 2.0 update, which will take the blockchain from a PoW to a PoS consensus algorithm - making it more scalable. This will further improve dApp development on the network, making it more hospitable to dApps and dApp developers.
While we don’t know when Ethereum 2.0 will come into effect, it’s very likely that it’ll happen some time this year. The update will seriously improve dApps on the blockchain, and could further increase the gap between Ethereum and its “competitors.”
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DeFi is killing the game
When compared to its competitors, it’s clear that Ethereum’s strong growth shows that DeFi is a killer app. DeFi, or decentralized finance, dApps account for much of Ethereum’s growth over the last year - and it’s unlikely to slow down considering the implementation of Ethereum 2.0 in the near future. 2020 is set to be a fantastic year for Ethereum.