Ethereum DeFi users rise almost 530% in 2019

Ethereum DeFi users rise almost 530% in 2019

According to the latest DappRadar report, the Ethereum dapp ecosystem has been flourishing in the second half of 2019, with user numbers across almost all categories seeing a huge rise since June. DeFi stood out as the category with the most growth, seeing its user numbers rise by 529 percent this year, putting the 195 percent rise seen by games and marketplaces to shame.

DappRadar report shows Ethereum dapp ecosystem flourishing despite bear market

While Ethereum, the world’s second-largest cryptocurrency and blockchain network, certainly hasn’t been the worst performer of the year, it failed to deliver any significant improvements this year. A declining price and a massive loss of confidence in the network have put a toll on the system, which seemed to be a punching bag for Bitcoin maximalists for the better part of the year.

However, while ETH itself was struggling, the dapp ecosystem within Ethereum was flourishing. According to the latest report from DappRadar, it has been the most popular blockchain to deploy decentralized applications on. The report found that every dapp category experienced significant growth either in daily activity, user base growth, or both.

One outlier in the overall growth trend was decentralized finance (DeFi):

“The headline success was in the DeFi category, which although remaining small in terms of users, experienced spectacular growth in terms of the value of asset secured.”

Huge user activity spikes on all Ethereum dapps

According to the report, the number of unique active wallets interacting across all Ethereum dapps on a daily basis rose 118% to over 19,000 by mid-December. While most of this growth happened during the first half of 2019, it hit the yearly high of 22,500 in early December.

Graph showing unique daily active wallets in the Ethereum dapp ecosystem
Graph showing unique daily active wallets in the Ethereum dapp ecosystem. (Source: DappRadar)

DeFi apps saw the biggest growth in 2019, despite accounting for only 6 percent of the overall user base. DappRadar found that daily active unique wallets in the DeFi categories rose by 529 percent since the beginning of the year.

Games and marketplaces, which accounted for more than half of overall daily activity in the Ethereum dapp ecosystem saw a user base growth of 195 percent.

Graph showing daily unique wallet numbers by category
Graph showing daily unique wallet numbers by category. (Source: DappRadar)

While user activity is a good indicator of a dapp category’s popularity, its significance can also be measured in another metric—token value. To get a better understanding of the ecosystem, DappRadar began following not just the volume of ETH in the ecosystem, but also the volume of all ERC20 tokens on the network.

This led to some interesting conclusions, the main one being just how undervalued the dapp ecosystem is. The total value of ETH tokens for all Ethereum dapps during 2019 was $1.8 billion, up 202% in terms of USD value, the report found.

However, the total value of ERC20 token activity in the second half of the year alone was $7.2 billion, up 166 percent.

Chart showing the total value of ETH and ERC20 tokens in the Ethereum dapp ecosystem
Chart showing the total value of ETH and ERC20 tokens in the Ethereum dapp ecosystem. (Source: DappRadar)

Breaking down the chart shows which categories contribute the most to the ecosystem. DeFi, which accounted for 45 percent of the total value, saw its token activity rise by 1,990 percent since June. Exchanges, which accounted for half of the total value in Ethereum dapps, saw its token activity go down by more than 40 percent.

Another outlier was the games and marketplaces category, which accounted for less than 1 percent of the total value of the ecosystem. The category saw its token activity increase by 87 percent in just six months, showing that they didn’t have to generate significant value to attract more active users.

Posted In: , Adoption, Analysis, DeFi
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Priyeshu Garg

Priyeshu Garg

Analyst @ CryptoSlate

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in computer science engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving transportation problems at his company (Ola), he can be found writing about the blockchain or roller skating with his friends.

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