Ethereum’s strong growth shows why DeFi is a killer app

In the last year, Ethereum decentralized applications (dapps) have seen their usage skyrocket, largely due to an increased interest in decentralized finance (DeFi) applications. In contrast, blockchain platforms EOS and Tron have seen their use as dapp platforms collapse in this time.

Ethereum dapps pick up speed

According to the latest DappRadar industry review, the total amount of Ethereum (ETH) locked up in dapps reached $1.9 billion in February 2020—up 27% month-on-month. This refers to the amount of cryptocurrency currently being held as collateral in these dapps.

Likewise, daily activity—measured in terms of the number of unique wallet users—jumped by eight percent in a month. This means more people are engaging with such applications and using them for various tasks, such as trading money.

This is part of a longer term trend. Over the last year, the amount of Ethereum in these dapps has grown rapidly. Between February 2019 and February 2020, the value of assets locked up in Ethereum dapps increased by 683%, while the number of active daily wallets grew by 104%.

DeFi apps were responsible for much of this growth. DeFi lets you lend, borrow and trade money over a decentralized network, without a bank involved. These types of apps grew by 294%

Similarly, Ethereum dapps in the games and marketplaces category also saw strong growth—up 114% in a year.

EOS continues to struggle

Despite Ethereum’s strong growth, other blockchain platforms have struggled to gain much traction.

Fewer people are using EOS, partly because its blockchain suffered severe congestion for several months, making it hard to send transactions or use dapps. Daily activity fell by 80% in this time. While gambling dapps are its biggest draw, these saw a 90% drop in activity, according to the report.

While Tron saw an uptick in the use of gambling and high-risk dapps over the last year, it had a decline in people using dapps in the games and marketplaces category. It did manage some growth over the year but just an 18% increase in the number of daily users.

Both cryptocurrencies have slipped down the rankings—when measured by the size of each coin’s market cap—in the past year, with EOS slipping from 4th to 8th place, and Tron falling from 9th to 15th.

Perhaps DeFi is the killer app after all.