Capital deployed to help the flow dapp ecosystem expand
Dapper Labs will use $725 million to attract developers, teams, and dapps to the Flow blockchain. The team behind the Flow blockchain, the NBA Top Shot collectibles, and the infamous Cryptokitties want to expand the Flow ecosystem by bringing in a more diverse offering. The fund becomes the largest ecosystem backing of its kind and will go towards elevating gaming, infrastructure, DeFi, content, and the role of creators in the Flow ecosystem.
Investors support the fund with considerable holdings of the network’s native token, FLOW, and a stake in Dapper Labs itself. They include Andreessen Horowitz (a16z), Coatue, Union Square Ventures, Greenfield One, Liberty City Ventures, and CoinFund. Moreover, the funding gives Dapper Labs coverage and access to support across the major markets of Asia, the Americas, and Europe.
To date, the leading dapps on the Flow blockchain have been incubated and launched by the Dapper Labs team. Titles such as NBA Top Shot, The Football Club, Dark Country, and BloctoSwap lead the network regarding transactions and users. At the same time, the pioneering NFT project CryptoKitties also sits within the Dapper Labs roster of brands. But as Flow targets expansion, they want to attract developers to build more applications, offering a more comprehensive range of services.
Who’s winning on Flow?
Even amidst a massive dip in crypto prices which has seen both BTC and ETH lose more than 50% of their respective values since the highs of November 2021, the top 10 Flow dapps are performing well. NBA Top Shot receives weekly user boosters as new packs drop and collectors and flippers descend to pick up new packs and cards. The number of unique active wallets connecting to NBA Top Shot swelled more than 20% in the last seven days to over 40,000. At the same time, high-value and rare NFT moments on NBA Top Shot are commanding upto $10,000 at writing.
BloctoBay provides an exciting example of a rising star on Flow. The native NFT marketplace has been rubbing shoulders with OpenSea, LooksRare, and Solana marketplace Magic Eden lately after solid sales and trading in April. In the last seven days, BloctoBay has attracted 3,182 traders that spent $276,190, and the average sale price of an NFT on BloctoBay is around $50.
In addition, BloctoSwap represents Flow’s core DeFi offer and is home to the native, US dollar-pegged stablecoin of the ecosystem tUSDT. Using BloctoSwap, users can swap tokens and transfer assets in and out of the Flow ecosystem from Ethereum and participate in pools to earn a yield.
Although percentage growth week over week is strong, the number of users is low and places BloctoSwap outside the top 100 exchanges as ranked by DappRadar. 24-hour trading volume through BloctoSwap is around $1.5 million. For comparison, Uniswap’s 24-hour trading volume is more than $2.7 billion at writing.
Looking at the platform’s market analytics, we can see that there isn’t enough activity on the exchange. The biggest market is FLOW/USDT trades which account for over $1 million of the 24-hour volume. Not surprising amidst the current bear market scenario is that traders are swapping FLOW, which is 20% down since last week, into USDT. While some do the opposite looking at the potential upside for Flow over the longer term.
Overall, there is a lack of utility for the native BLT token and not much on offer to incentivize FLOW token holders to lock up their assets on BloctoSwap. Presumably, Dapper Labs will be using some of the $725 million capital to attract DeFi players looking to expand to other networks in pursuit of users.
Users first, then scale
Since Dapper Labs launched the custom Flow blockchain and raised $21.5 million back in October 2020, it appears to have focussed on attracting high-value IPs and building partnerships with brands such as La Liga, NFL, NBA, and UFC, who joined the Flow family in Jan 2022 to draw crowds and users to its dapps. Dapper Labs received more investments, and now has a valuation of $6.7 billion.
Using Flowscan, we can see that the network attracts more people to create accounts. On April 21, more than 173,000 accounts were created in a single day, which presumably ties in with a product launch or new dapp such as UFC and The Football Club making a splash on Flow. Meanwhile, the data for active wallets is also positive as it’s excellent to have accounts created, but ultimately Flow wants them to be active.
After years of building a loyal user base that perhaps knew very little about blockchain, crypto, or NFTs before collecting NBA cards, for example. Those users are arguably well primed for the next stage of evolution for Flow and a raft of new dapps and services to offer further utility to the native tokens in the ecosystem.
Users now understand blockchain wallets, KYC, token transfers, NFT valuations, and to some extent, DeFi mechanics. This is the perfect moment to deploy large amounts of capital to builders, especially as bear market scenarios usually mean that most projects will either sink or swim, but all are looking to attract more eyeballs.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.