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Dapp Industry Overview: April 2021

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DappRadar

Wax, Flow and BSC pushed Ethereum into 4th place

April 2021 has been an exciting month for the decentralized application industry as the decentralized finance (DeFi) ecosystem continued to lead, while the market for non-fungible tokens (NFTs) was filled with exciting, high-value sales. At the same time cryptocurrencies continued to peak. Bitcoin reached an all-time high of $64,000, and Ethereum reached $3,000.

Although Ethereum gas prices decreased by the end of April, it now became the 4th largest blockchain in terms of unique active wallets. Ethereum lost its leadership position to three very different competitors. WAX overtook pole position thanks to the increased popularity of Alien Worlds, which was responsible for more active wallets than Ethereum and Flow combined. Of course, there’s also Binance Smart Chain (BSC), which was the second most used blockchain in April.

The DeFi ecosystem has skyrocketed in April. While Ethereum was still the most significant in terms of DeFi TVL, the vast majority of value was driven by the price increase of ETH, BTC, and other cryptocurrencies. At the same time the TVL doubled on Binance Smart Chain, which was driven by the success of the usual suspects; Venus and PancakeSwap.

Source: Google Trends

The NFT market experienced a dip in volume in April. According to Google Trends, the interest decreased in the middle of the month. One of the reasons for this drop in NFT interest came from NBA Top Shot and its on-going retention issues. Despite that, the industry was filled with exciting sales, as some NFTs sold for more than $5 million. CryptoPunks took over the leadership position from NBA Top Shots in terms of transaction volume, while the latter was still the most active dapp in the NFTs space by unique active wallets.

Table of contents

  • April 2021 – Key takeaways
  • Ethereum rivals not slowing down
  • BSC still very concentrated on DeFi
  • Polygon’s exponential growth
  • DeFi expanding: Ethereum vs L1 and L2
  • Competition heating up in NFT markets
  • NFTs transaction volume shrank: Are we ready for the masses?
  • WAX shows potential of NFTs
  • Big brands join the NFT hype
  • April in-summary

April 2021 – Key takeaways

  • In April, the blockchain industry grew 158% year-on-year, reaching 1 million in daily unique active wallets across all chains.
  • WAX, BSC, and Flow have overtaken Ethereum in terms of daily unique active wallets. WAX was responsible for half of the daily unique active wallets within the wider blockchain industry.
  • Ethereum maintained its DeFi sector leadership by generating $70 billion in TVL.
  • Venus TVL has surpassed MakerDAO by $200 million.
  • NFTs saw a dip in key metrics, mainly driven by a drop in activity within NBA Top Shot. The transaction volume decreased from $217 to $83 million month-on-month.
  • Despite the dip in NBA Top Shot activity, Flow was leading in the NFT space with more than 60,000 daily traders.
  • WAX  generated impressive results in terms of daily NFT traders, surpassing 18,000. The biggest drivers were Alien Worlds, Atomic Market, and the newly launched Topps MLB.

Ethereum rivals not slowing down

In April 2021 the blockchain industry grew by 158% month-on-month in terms of unique active wallets. In the past month, the entire blockchain industry has seen more than 1 million active wallets across all blockchains. 

Surprisingly, the biggest contributor was the WAX blockchain. This NFT-focussed blockchain generated around half of all the activity, which equals more than 500,000 unique active wallets. The biggest reason behind this growth was the game Alien Worlds, which relies heavily on a yield farming mechanic and provides gamers with a source of income. 

BSC was the second most active blockchain, and it increased its user base by 61% in April. The DeFi ecosystem still heavily drives BSC, even though Binance recently announced serious moves into the NFT category. DeFi dapps are still responsible for 96% of all the blockchain activity on BSC. At the same time, Flow was the third most significant blockchain, even though 99.9% of their activity was driven by NBA Top Shot. 

Although Ethereum dropped to 4th position based on their unique active wallets, the Ethereum blockchain still claims the number one spot in terms of total value locked (TVL). On Ethereum the transaction volume increased from $114 billion to $148 billion, even though that value mainly comes from the token price increases. While gas prices are high, we can only conclude that DeFi users on Ethereum invest larger amounts of money and perhaps feel safer depositing funds both of which make a $50 gas fee more than acceptable. 

Polygon was the most significant of the layer-2 solutions tracked by DappRadar. Usage in April was almost 5 times higher, growing from more than 4,000 to 20,000 unique active wallets. The activity was driven by several dapps: QuickSwap, Aavegotchi, and Aave.

NEAR Protocol also showed increased activity in terms of unique active wallets. The launch of the Rainbow Bridge helped NEAR Protocol to connect to the Ethereum ecosystem. The technology will allow for assets to flow between NEAR and Ethereum and may incentivize developers.

Looking into market capitalization, there were some major changes in terms of BNB, the native token of the Binance Smart Chain. In April, BNB secured 3rd place by market capitalization.

Polkadot (DOT) also showed impressive growth and will be welcoming the USDT stable coin on both Polkadot and Kusama. This may help the growth of both chains. Stablecoins have become an important element of the DeFi sector, and USDT has been, by far, the biggest stablecoin in the industry to this point.

To conclude, both layer-1, layer-2, and sidechain solutions are getting more attention. Notably, layer-1 solutions such as BSC, Wax, and Flow are leading. On the other hand, sidechain solutions such as Polygon are also generating impressive growth. Overall, all of these suggest intense competition for Ethereum right now, and in the months to come.

BSC still very concentrated on DeFi

Dapp developers on Binance Smart Chain still focus mainly on decentralized finance. Out of the 440 dapps listed on BSC, 320 are part of the DeFi ecosystem. At the same time, plenty new DeFi dapps are added on a weekly basis, but the majority of the activity is concentrated on a few platforms: PancakeSwap, Pancake Bunny, Venus, and ApeSwap to name a few. 

ApeSwap showed improved performance in multiple metrics. Firstly, unique active wallets increased from 4,000 to around 15,000 at the end of April. Resulting in the dapps native token BANANA achieving exponential growth from $1 to more than $10.

Source: DappRadar

Overall, BSC is very DeFi oriented. On the other hand, the recent plans of Binance to release their own NFT marketplace can suggest even more extensive competition for NFT marketplaces on Ethereum, but also Wax, Polygon and Flow.

Polygon’s exponential growth

Polygon is taking the lead in the layer-2 race, and its token is moving accordingly. As already elaborated before, in April the chain gathered more than 20,000 daily unique active wallets. The reason behind such growth was twofold. Firstly, Polygon has the ability to provide fast and cheap transactions, resulting in a better user experience with fewer gas fee issues. Secondly, the platform has successfully attracted major players from the Ethereum ecosystem. As a result, Polygon doesn’t only attract new products, but also their communities and therefore their on-chain activity.

Source: DappRadar

The top 3 dapps were QuickSwap, Avegotchi, and Aave, which generated more than 12,000, 2,200, and 1,500 unique active wallets respectively. 

Without a doubt, Polygon has a bright future, not only within the DeFi ecosystem but also in the Game and NFT categories. The network has ambitious plans for NFT projects moving to layer-2, which might help to migrate even more users to Polygon in the near future.

TVL: Ethereum takes the crown

Despite soaring competition from layer-1 and layer-2 solutions, Ethereum has still hit several important milestones. The total value locked in Ethereum DeFi dapps surpassed $70 billion. The biggest reason for this increased TVL has been the surge in prices of cryptocurrencies. The price increase is argued to be triggered by an upcoming network update, alongside increased interest from institutional investors. The blockchain released a test version of a network update called Steklo, hoping to test and improve transaction speed and cost.

On Binance Smart Chain, the total value locked surpassed $40 billion. Although BSC TVL is still way lower than on the Ethereum blockchain, the growth rate of TVL was 3 times higher. In April, BSC TVL grew by 126% while Ethereum TVL has only 27% growth.

Source: DappRadar & Defistation.io

Looking at the top dapps on Binance Smart Chain, Venus surpassed the number 1 Ethereum DeFi dapp MakerDAO. Although the difference is very small, BSC is showing its real DeFi potential. Overall, with the tendencies of Ethereum dapps expanding onto both layer-1 and layer-2 solutions and BSCs growth rate, it might not take long for BSC to gain leadership in terms of TVL. One might even argue that the future of DeFi is not dependent on one or two blockchains, but on the ability to unify multiple blockchains under one protocol.

Competition is heating up in NFT market

There were a number of big capital raise announcements in April with the biggest funding announcement coming from Dapper Labs, the team behind NBA Top Shot, and the Flow blockchain. They raised $305 million. Enjin completed a funding round of $18.9M in order to enter the Polkadot ecosystem. SuperRare has attracted $9M in its Series A. Investors clearly believe that the current hype surrounding NFTs and digital collectibles is only beginning. 

When it comes to NFTs and trader count, there are three blockchains that stand out from the crowd: Flow, Wax, and Ethereum. Flow is currently the number 1 on the NFT market, with the 60,000 active wallets trading NFTs on a daily basis. The latest investment round by Dapper Labs, partnership with Genies, and the success of NBA Top Shot make Flow a serious contender for the number 1 spot in the months to come. 

Currently, second place belongs to Wax, which has seen incredible growth thanks to Alien Worlds and Atomic Market. These two dapps account for more than 70% of all NFT activity on the Wax blockchain, followed by Simple Market. Overall the Wax blockchain has 18,000 active traders per day by the end of April.

Ethereum is the 3rd most used blockchain by traders count, with 14,600 active traders per day. However, Ethereum was leading in terms of transaction volume, thanks to CryptoPunks. 

Masses holding off?

NFT transaction volume decreased in April compared to March by 21%, mostly driven by the Flow blockchain. The drop in transaction volume is the result of continued technical issues faced by NBA Top Shot. The transaction volume decreased from $217 million to $83 million. The technical issues not only had an effect on the overall activity but also affected the social media channels and community growth.

Source: DappRadar

NFT trading on Ethereum also faced a decrease in April, which was driven by a slight drop in activity on OpenSea and Rarible. On the other hand, CryptoPunks transaction volumes increased by 19% month-on-month. The growth was driven by top sales that vary from $600,000 to more than $1 million per punk. Out of the top 10 NFT sales in April, five came from CryptoPunks.

WAX shows potential of NFTs

The WAX blockchain has made a name for itself with brand-affiliated NFT dapps such as Street Fighter, Topps MLB, Garbage Pail Kids, and the William Shatner collection. By no surprise, according to the DappRadar NFTs page, WAX blockchain dapps are the second most popular dapps in NFTs space.

The biggest contributor to these results is a mining game called Alien Worlds. In this game, players use NFTs to mine a cryptocurrency called Trilium (TLM). They do this on player-owned land on certain planets. The simple mining mechanics attracted lots of bots, which are being fought off by anti-botting mechanics. The number of wallets keeps increasing, which would indicate that users are eager to play the game and earn TLM. 

The second and third most used platforms are Atomic Market and Topps Major League Baseball. The latter launched in mid-April. Seemingly, Topps wants to accomplish with MLB what Dapper Labs did with NBA Top Shot. While it is still early to say, the project has potential. Traditional baseball cards have rocketed in value during the pandemic as collectors explored new stores of value. 

Source: DappRadar

WAX has huge potential to grow. Rarez, a new organization aiming to bring scarce digital collectibles, digital music, and other blockchain-based assets to the music industry, brought indie band Weezer to the blockchain as well as other known brands such as Capcom’s Street Fighter and Topps Garbage Pale Kids. Arguably, WAX might become the key to mass adoption in terms of NFTs.

Big brands join the NFT hype

Despite the dip in activity, NFTs continue to attract the attention of traditional market players. NFTs have been particularly popular when it comes to sports, with NBA Top Shot and Sorare being number one and number five respectively when it comes to NFT all-time sales among digital collectibles projects. 

NBA Top Shot and Sorare have proven that there is demand for digital sports collectibles, so it would not be surprising to see other major sports leagues and teams try to take advantage of NFTs. As mentioned, Major League Baseball is looking to get in with the trend. Playboy will also be experimenting with NFTs and is partnering with Nifty Gateway to cooperate with artists and use its extensive archives to sell NFTs. 

It is worth noting that Nifty Gateway continues to solidify itself as the platform for launching premium NFT items. The landscape is getting more competitive, but it looks like Nifty Gateway has separated itself, if only for the moment having launched NFTs in collaboration with mainstream celebrities like Paris Hilton, Steve Aoki, Grimes.

April summary

To conclude, Ethereum is having a hard time competing with layer-1 and layer-2 solutions in both DeFi and NFT categories. WAX and Flow are providing heavy competition in the NFT field, while BSC and Polygon are mounting serious charges in the DeFi ecosystem. 

In terms of total value locked Ethereum still leads the space. This suggests that Ethereum is more used for higher value transactions now, while the masses look elsewhere. BSC showed that it can attract value, amassing $43 billion in value locked against Ethereums $65 billion. BNB has now moved into the top 3 by market capitalization with a growth rate 3 times higher than the Ethereum DeFi ecosystem. If this growth continues we could possibly see BSC overtaking Ethereum in terms of TVL in the near future. 

While the NFT market in April was filled with exciting sales and new projects, we observed decreases in both transaction volume and the number of traders. The decline was driven by NBA Top Shot as a result of website overload problems. More recently, the introduction of pack reservations has appeased the community.

On the other hand, a dip in NFT sales and values could be very temporary. Not only is NBA Top Shot looking for ways to increase the scalability of its platform. Big brands, such as MLB, Playboy, and celebrities, such as Snoop Dog and Paris Hilton, might drive the industry into a new wave of growth. Companies like Sega and Hasbro already revealed their intention to explore the NFT market. At the same time eBay and many others are investigating their options.

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