Active Ethereum users double in Q2 2020: report

The second quarter of 2020 may have been an inflection point for decentralized applications on Ethereum.

Active users on Ethereum-based dapps doubled in a single quarter for a cumulative total of more than 1 million, according to Dapp.com’s Q2 2020 Dapp Market Report. 

DeFi applications powered the increase, with transaction volumes reaching $5.7 billion in June and accounting for more than 97% of activity on the Ethereum blockchain. The report shows how important Ethereum has become for the success of decentralized finance (DeFi), and how much DeFi has come to dominate Ethereum in recent months. 

The June release of Compound’s COMP governance token helped drive DeFi’s rise in the second quarter, more than doubling the total DeFi transaction volume compared to May and pushing the Ethereum total DeFi volume to more than $10.3 billion for the full quarter. EOS and TRON, Ethereum’s two closest competitors in the DeFi world, recorded quarterly volumes of $1.89 billion and $260 million, respectively. 

Across all blockchains, DeFi 24-hour transaction volume reached an all-time high of more than $600 million on June 21.

Dapp.com measures active dapp users as a cumulative total of all users who interacted with dapps across the entire quarter. Active dapp users on Ethereum grew from around 637,000 in Q1 to more than 1.25 million in Q2. Daily active DeFi users, a more narrow category of wallet addresses that regularly interact with Ethereum-based DeFi products, also grew from just under 7,700 in Q1 to more than 11,200 in Q2.

The Q2 2020 Market Report also noted that Brave browser’s BAT token topped the charts for total transaction volume in the quarter, coming in at more than $930 million. The impressive volume was fueled by ‘yield farmers’ taking advantage of wrinkles in the COMP distribution system to boost their earnings.

The shenanigans resulted in a recent governance vote to adjust COMP distributions to incentivize more volume and liquidity being directed towards tokens with broader use cases, such as DAI and USDC stablecoins.

Ethereum saw 45 new dapps launched in the second quarter, while the next closest competitor, TRON, recorded 33 new applications. The data suggests developers may be spending more time on existing dapps instead of releasing new ones—just 99 new applications were released across all blockchains in the second quarter, compared to 135 during the first quarter of 2020.

Q2 was another dominant quarter for Ethereum, recording big increases in users and daily transactions both sequentially and compared to competing protocols like TRON and EOS. With Ethereum-based DeFi gains and momentum continuing to mount, it’s looking increasingly unlikely any challenger will be able to unseat the current DeFi darling.