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Dance of the Dapps

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Satoshi&Co Daily Crypto Newsletter

June 6 · Issue #190 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as our recently-launched podcast series with leading crypto industry participants at our newly-launched website

It has been a while since we visited upon state of affairs in the DApp ecosystem. Today we take a look at some DApp (Decentralized App) metrics - DApp usage, the number of users and DApp transactions on the blockchain.
Our initial research threw up a new Ethereum DApp called Proethers that is seemed to be gaining quite a lot of traction over the past few days. According to, this DApp has the highest number of 30-day users, eclipsing those of other popular DApps such as Endless Game, IDEX, etc. We were excited to learn more about this hot new DApp on the block, and boy, it turned out to be a complete let down!
This DApp claims to 10x your money by sending back to you 10 times the amount of ether you send to the address mentioned on the website. Needless to say, this is an outright ponzi scheme aimed at gullible users. Various versions of this scam have been propagated on telegram, at the peak of the ICO boom.
Top DApps by Users:
Top DApps on both ETH and EOS have witnessed users ranging between 60k and 70k in number over the past 30 days. This is only a tiny sliver of the millions of daily active users that most successful centralized applications have. Moreover, since the cost of a Sybil attack is much lower in the case of DApps than it is in the case of centralized applications, the current DApp user statistics could well be overstating the actual numbers.  
Top DApps by On-chain Transactions:
In terms of DApps by highest number of onchain transactions in the last 30 days, EOS DApps account for a majority of transaction volume with 7 out of the top 10 DApps built on EOS. However, as EOS transactions are absolutely free, transaction counts are susceptible to inflation, which we think is very likely the case with EOS DApps.  
DApps by Category:
Unlike social media, which is the most dominant category in centralized applications, gaming and gambling are the dominant categories in DApps. Decentralized exchanges, which are expected to be a critical component in the DeFi ecosystem, account for only 20% in the Top 10 ETH DApps. DApps on EOS are heavily skewed towards gambling, with 7 DApps among the top 10 focused on punters.
Almost four years on from the launch of Ethereum as a Turing complete, programmable smart contracting platform, the protocol is still undergoing radical changes on a frequent basis and will take a fair bit of time to reach a steady state, or at least some semblance of it. Centralized applications offer a far richer UI/UX and customer experience, while DApps continue to suffer from scalability issues and the lack of a sticky set of users. Customers are clearly not looking beyond usability and UI richness while using applications and the concept of decentralized applications may be too early for large scale customer adoption.
As seen from the proliferation of gambling DApps, which are in theory immune to regulatory clamping and censorship, there is clearly a demand for DApps that can allow users from around the globe to access a particular application in a permissionless manner, regardless of the legality of it in a particular jurisdiction. What is even more important is addressing the fundamental challenges and designing the incentive structures that drive the network effects, and in bringing in incredibly large number of users to an application. Ethereum, with its first-mover advantage, large ecosystem of developers, and scale of users is in pole position to be the forerunner in the DApp revolution. But the burning question is whether it is going to take 5 years or 25! As we have observed before, for the vast majority of users, convenience, costs, and a better user experience trumps concerns over privacy, decentralization etc. Another reason why the crypto community should look at Facebook’s efforts in this space as a mixed blessing. It could be very good for overall crypto adoption, but it could also end up being very bad for crypto, and in general.
Meanwhile in Crypto Wonderland....
“Komodo Hacks Itself”
Crypto wallet provider Komodo effectively hacked itself to prevent fraudsters from accessing its users’ funds, the company confirmed in a blog post on June 5. Security researchers had alerted the company to a vulnerability in its Agama wallet. Realizing that hackers could strike any moment, Komodo’s cybersecurity team decided to use the same exploit to move compromised crypto to safety. Komodo’s actions mean that, at current market rates, funds worth $13 million were successfully shielded from a hack.
“Grin’s First Hard Fork Scheduled”
Grin developers have reached a rough agreement on a block number and expected date of activation for the crypto network’s first ever system-wide upgrade or hard fork. Proposed by Quentin Le Sceller, a Grin core developer and software engineer at blockchain startup BlockCypher, during a developer call on Tuesday, the proposed activation block number is 262,080. The network is expected to hit this block height on July 17. On Wednesday, developers re-discussed Le Sceller’s hard fork timeline, which also calls for launching a private test network for the upgrade in the beginning of June and activation of the upgrade on the public Grin test network.
“Facebook To Announce Its Crypto Soon”
Facebook will announce its cryptocurrency later this month, and will allow employees working on the project to take their salary in the form of the new currency, according to a report in The Information. About a year ago, the company appointed former PayPal executive David Marcus to begin exploring opportunities with blockchain, the technological underpinning for cryptocurrency. Since then, several outlets have reported that the company has been building its own digital currency, which users will be able to store, trade, and exchange for regular currency, in part through Facebook apps including Messenger and WhatsApp. The report adds that Facebook is also planning physical ATM-like machines where users can buy the currency.
“OKCoin To Expand Its Trading Services”
Digital asset trading platform OKCoin has expanded its trading services and opened an office in Malta, according to a blog post published on June 4. OKCoin has launched its services to non-United States customers, who can now deposit and withdraw euros, as well as participate in euro spot trading for cryptocurrencies such as bitcoin (BTC), ether (ETH), and bitcoin cash (BCH). Per the post, the exchange is planning to add more euro digital asset pairs in the future. Apart from expanding its trading, OKCoin has opened an office in Malta in the blockchain accelerator and hub dubbed chiliZ Blockchain Campus. The new office will operate in compliance with the Virtual Financial Asset Act, regulated by the Malta Financial Services Authority.
Tweet of the Day
Peter Schiff
Looks like the #Bitcoin pumpers are right about one thing. Bitcoin is indeed a non-correlated "asset." When investors are taking risk off, they are likely to sell Bitcoin. But when they are putting risk back on, they are just as likely to keep selling Bitcoin.
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