DappRadar Annual Report: A Glance at 2020 DApp Ecological Development and Challenges

Written by: Modesta Jurgelevičienė, Ian Kane, DappRadar

Translated by: wjw, WePiggy Community Volunteer

Overall, 2020 An incredible year indeed.

At the beginning of 2020, DeFi became the driving force of the blockchain industry. While other blockchain projects lack developer support and interoperability, Ethereum is well-positioned for growth. However, this growth is not without warning signs.

In mid-March, the new type of coronavirus pneumonia swept the world, and the prices of traditional markets and cryptocurrencies fell sharply, which seriously affected MakerDAO's DAI stablecoin anchored at $1 exchange rate, MakerDAO nearly collapsed, but fortunately, the strength of the community kept it going.

The second key trend for 2020 is yield farming. Compound’s successful launch of the COMP token, along with its incentive model, has proven to be an excellent user acquisition channel.

Various DeFi DApps began releasing tokens and incentives at a rapid pace, while other developers built meta-protocols to maximize yield. Meanwhile, other categories like NFT collectibles and games have adopted the model.

Overall, most tokens issued in DeFi and NFT DApps are governance tokens. First, it allows the community to participate in the decision-making of the DApp. Second, the governance mechanism is another big step towards true decentralization.

The hype around yield farming has also exposed a lot of problems. One of them is user retention. Uniswap’s lead was shaken by the launch of the so-called vampire DApp — SushiSwap, proving that user retention is one of the keys to success.

The increase in activity in the Ethereum network has brought about another problem - scalability. Expensive gas fees have weighed on low-value DApp activity, especially games, which fell by more than 90% between May and August. This, in turn, creates opportunities for Ethereum-centric layer-2 network solutions as well as rival layer-1 blockchains.

Attacks and exploits targeting smart contracts are also proof that the industry is still experimental, resulting in insurance products that may be the key to the healthy development of the industry essential component.

Finally, protocols and developers are starting to realize that working in isolation may not be the best way to fight competition. There were some important mergers at the end of the year that look like they could be the main trend in 2021.

Note: DeFi ecosystem refers to DApps such as decentralized finance and decentralized exchanges; NFT market refers to DApps such as collectibles and trading markets .

Key Point

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2020 has been a record year for the blockchain industry. DApp transactions exceeded $270 billion, 95% of which came from the DeFi ecosystem on Ethereum.

The top Ethereum DApps tracked by DAppRadar, the total lock-up volume (TVL) and the adjusted total lock-up volume (aTVL) respectively reached the history of 2020 The highest figures are $13 billion and $11 billion.

In 2020, a total of 238 new DeFi DApps were submitted to DAppRadar. 106 of them (45%) run on the Ethereum chain.

In 2020, a total of 1,353 new DApps were submitted to DAppRadar. Of these, 424 (or 32%) run on the Ethereum chain.

Scalability issues are not the only challenges facing 2020. The growing usage of DApps has resulted in multiple exploitable vulnerabilities and hacks costing over $120 million.

After implementing a yield farming incentive program, the number of active wallets on NFT marketplace Rarible jumped from about 200 to over 1,500 in September 2020.

The NFT market has shown great potential in 2020 with multiple transactions worth over $100,000.

DeFi DApp has established the real foundation of the road to decentralization in 2020 by distributing governance tokens, although the actual implementation of the decentralization concept has yet to be confirmed.

2020 Challenge

Scalable

In 2019, more and more new DApps were launched on all blockchains. On top of that are DeFi, NFT and Gaming DApps, which fueled 2020 activity. As expected, most of the activity was focused on the Ethereum blockchain.

2020 is the year DApps try to grow at all costs. Of course, this has consequences, such as rising Ethereum gas fees.

The first wave of Gas price increases was attributed to increased usage of the Tether USDT stablecoin on Ethereum, coupled with activity from several high-risk DApps, As a result, the network is flooded with spam transactions.

The second wave goes hand in hand with the newest trend of 2020 - yield farming. During peak transaction times, the average transaction cost exceeds $50.

In general, Ethereum has repeatedly hit the ceiling of scalability. The arrival of Ethereum 2.0 is not only critical to securing Ethereum’s leadership, but also to its survival.

Source: Etherscan.io Gas Price

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Growing Competition

2019, Ethereum Dominance The main contenders are EOS and Tron, and not only have these protocols generated a lot of activity in 2020, but other projects such as Polkadot and Binance Smart Chain (BSC) have also risen rapidly.

Source: DAppRadar

There is no doubt that EOS and TRON are playing catch-up in 2020 as the DeFi category explodes. Replicas of Ethereum DApps were built on TRON, and these DApps began to contribute a lot of activity. In the TRON DeFi ecosystem, more than 17,000 independent wallets are active every day.

EOS is a bit slower, and the current activity is dominated by DApps other than DeFi. Despite this, the EOS DeFi ecosystem still has about 4,000 unique wallets active every day.

In 2020, more Ethereum competitors will come online. For example, Cardano, Polkadot, Binance Smart Chain, Cosmos, Near, and Flow. Although only a few projects are active on these blockchains so far.

In terms of products launched, Binance Smart Chain (BSC) is leading the way. In just three months after launching the top BSC DApp, the number of independent active wallets per day is about 10,000.

Leading the BSC development project is PancakeSwap with 3,300 daily active wallets. While this figure is still eight times lower than Uniswap, the top Ethereum DEX, PancakeSwap already has more active users than other leading Ethereum DApps such as SushiSwap or Balancer.

Source: DAppRadar

Other projects are still in the deployment phase, and Cardano recently announced that it will release its first DeFi project - pqwid. Cardano has yet to deploy smart contracts, but according to CoinGecko, is a serious contender as a top 10 project by market capitalization.

Although no projects have been launched yet, Polkadot is also on the cusp of launching an ecosystem against Ethereum. The protocol has attracted media attention and new investors such as KR1 and RockX, which launched a $20 million investment program to support projects taking place on Polkadot.

Another Ethereum challenger is Cosmos, which is creating a decentralized network of independent blockchains on top of the Tendermint consensus layer. Although Cosmos is still in the early stages of deployment, projects such as Binance Chain, OKChain, and Akash are already using Cosmos.

Flow is another contender that is more in tune with the DApp game and promises to be a fast, decentralized and developer-friendly blockchain. So far, some of the world's top developers and big names have joined, such as NBA Top Shot, Animoca, and Ubisoft.

Source: Coingecko

Smart Contract Vulnerabilities

Although various indicators of DeFi set records in 2020, the As it turns out, DeFi is still a very fragile ecosystem. Especially in unaudited smart contracts, there are a variety of attackable and exploitable vulnerabilities and program failures, even audited smart contracts have problems.

MakerDAO has been put to the test in 2020 as one of the most important DApps. In mid-March, the rapid decline in digital currency prices seriously affected MakerDAO's DAI stablecoin peg to the exchange rate of $1, and then MakerDAO, which nearly collapsed, continued in the maintenance of the community.

YAM is a project that has attracted a lot of attention in only 24 hours of its launch. The project quickly collapsed within two days, with the YAM token price plummeting from a high of $200 to $1.04.

The overall increase in DApp usage in 2020 has also led to more and more attacks and vulnerabilities being exploited. By the end of 2020, the total value of such events has exceeded 120 million US dollars, which makes insurance products an increasingly important topic in the field, and we predict that insurance products may become a key and necessary part of the healthy development of the DeFi industry.

Centralized and decentralized insurance solutions are on the rise. For example, yInsure’s NFT insurance tokens have garnered a lot of attention as a novel commodity to trade. The industry appears ready to look further into insurance options in 2021.

Source: Rarible

Another interesting example is the auditing company CertiK. CertiK has developed a membership service that enables participants to be compensated if attacked.

The increased deployment and interest in such projects is some proof that insurance will be the next important sub-category of the DeFi ecosystem.

High returns come with high risks

In 2020, people are more interested in DeFi Growing interest in applications and yield farming.

Multiple DApps have a fairly high rate of return, but high returns come with risks.

There have been many instances throughout the year where users have lost huge amounts of money in purely running scams and fraud. Additionally, although DApps that contain certain risks are classified as high-risk DApps on DAppRadar, we are starting to see that the division of risk levels is blurring.

The HEX project launched in December 2019 and is led by longtime Bitcoin supremacist (also known as Bittheist) Richard Smart.

HEX is unique in that it is not a drumbeat game or a high-risk DApp like a typical pyramid scheme. Most high-risk DApps can only survive for less than three months, while it has been active for more than half a year.

Unlike other high-risk DApps, HEX combines its tokens with a long-term high-return pledge mechanism and powerful membership marketing, which is more like a An ambitious attempt to guide the practice of a new cryptocurrency and community. Users use ETH as the principal to exchange for HEX tokens, and receive the local currency and the interest paid in HEX at the same time. Therefore, the high risk factor of HEX is limited to the fluctuation range of HEX token price. The price of the HEX token has fluctuated a lot during 2020. Despite its current value of not more than $0.0044, an astounding increase of 2100% has occurred in 2020.

Source: Coingecko

User retention

The rapid growth in 2020 also highlights user retention from another angle importance. As mentioned earlier, the number of unique active wallets interacting with a DApp smart contract is a key metric of success in the long run.

Uniswap is the clear leader in the decentralized exchange (DEX) category in 2020. However, another project plotted a sneak attack, and this is SushiSwap, the release of a so-called vampire DApp that hit the headlines in mid-2020, essentially Sushiswap uses incentives to get users to move liquidity away from Uniswap.

The vampire strategy was successfully implemented for several weeks, but in mid-September, Uniswap fought back, airdropping UNI governance tokens to its current and past users. While we found that Uniswap had regained its leadership position, we also recognized that this incident showed the vulnerability of user retention and was easily driven by the temptation of interests.

Source: DAppRadar

In 2020, the idea of development at all costs has brought exciting and challenging issues to the entire blockchain industry and individual DApps. However, through people's dedication and perseverance, the industry has found its way to success, witnessing many historically high figures.

Development at any cost

16 districts tracked from DAppRadar By all metrics of blockchain, the blockchain industry has seen tremendous growth in 2020.

The number of unique active wallets increased by 466%, from 58,000 at the end of 2019 to around 200,000 at the end of 2020. Transaction volume increased by 1178%, from $21 billion in 2019 to $270 billion in 2020.

On the other hand, the growth is highly concentrated in a few DApps. The top 10 DeFi DApps accounted for 87% of Ethereum’s trading volume, worth $223 billion in 2020.

Source: DAppRadar

Ethereum’s DeFi ecosystem is the main driver of Total Volume Locked (TVL), along with Adjusted Total Volume Locked (aTVL) tracked by DAppRadar reaching 2020 The highest levels in history, respectively 13 billion US dollars and 11 billion US dollars.

95% of transaction volume growth comes from Ethereum’s DeFi applications

DeFi is the main driver of DApp growth in 2020, and the total lock-up volume (TVL), unique active wallets (UAW) and transaction volume are the main indicators. It was also a hot topic on news channels and social networks, with peak interest in discussions occurring in April and September 2020.

Source: Google Trends

Ethereum’s ecosystem has grown and matured first, while competitors are trying to catch up.

Source: DAppRadar

Tron is the first blockchain to catch up in the DeFi ecosystem. So far, there are more than 70 DApps on the TRON network, and most of the activities are concentrated in the top three. The number of independent wallets using USWAP, JustSwap, and UME is as high as 5,000+ every day, accounting for 70% of the total activity in the entire DeFi ecosystem.

Source: DAppRadar

Binance Smart Chain (BSC) is another rapidly popular protocol, generating around $3 billion in transaction volume within a few months of its launch. This is still a relatively small number compared to Ethereum’s annual figure ($256 billion), but close to those of TRON ($3.6 billion) and EOS ($6.5 billion).

Source: DAppRadar

One of the main drivers of growth in Ethereum's DeFi ecosystem in 2020 is the hype surrounding yield farming and governance token distribution.

Yield farming promotes DeFi ecological activities

Yield farming was originally developed by Synthetix was introduced and Compound and the COMP token made it popular. It can be said that Compound’s release of the COMP governance token triggered a chain reaction across the industry.

Balancer and Curve also followed the trend, with key indicators briefly rising. Not only that, the growth of key indicators reached the highest point when the SushiSwap project was launched. The data points for peak unique active wallets and project launch are provided below:

COMP: In one week, UAW (unique active wallets) increased from 300 to 2,700 (+800%).

BAL: In one week, UAW increased from 200 to 650 (+225%).

CRV: In one week, UAW increased from 1,000 to 4,100 (+310%).

Sushi: In one week, UAW increased from 10 to 7,100 (+70,900%).

UNI: In 24 hours, UAW increased from 30,000 to 71,000 (+137%).

At the end of August, the release of SushiSwap shook the DeFi ecosystem. The project started from the foundation of Uniswap with the purpose of migrating its liquidity. In return, to incentivize users to migrate, the protocol distributes Sushi tokens. As of September 2020, the project's transaction volume exceeded $6 billion.

Uniswap counterattacked, airdropping 400 UNI to all wallets that have interacted with Uniswap in the past and currently, in order to distribute 400 UNI tokens to each user, A few hours after the airdrop, the ghostwriting was worth about $1,200.

As a result, Uniswap's trading volume peaked instantly, creating a trading volume of $33 billion in September, accounting for almost 60% of the total trading volume.

Source: DAppRadar

Generally speaking, the issuance of yield farming and governance tokens provides a template for other DApps, enabling other projects to start understanding how to motivate blockchain users.

The road to true decentralization

All the above DApps Both released governance tokens in 2020, and theoretically, holders can vote to distribute the fees collected by the platform as income to themselves.

Curve was one of the first DApps to pay dividends to token holders, and developments on other platforms are equally interesting. Recently, both the Compound and Uniswap communities voted on a proposal that would enable the ecosystem to use governance tokens as project funds to pay contributors. If realized, this will be a key step for two important projects on the road to decentralization of the Ethereum DeFi ecosystem.

Source: Compound Proposal 030: COMP Contributor Grants

Rising yields encourage Bitcoin to flow into Ethereum

From In terms of market capitalization, Bitcoin is still the number one cryptocurrency in the world, and it also represents a large amount of liquidity that has not previously entered the Ethereum DeFi field.

The smooth integration of the two is an important step in bringing bitcoin holders into activity on the Ethereum network.

Rising yields are the main incentive for Bitcoin to flow into Ethereum. wBTC is the leading provider of tokenized Bitcoin on Ethereum, and many more to come.

While managed-based solutions lead the competition, unmanaged solutions have been raising funds and launching. renBTC is currently the leading non-custodial tokenized Bitcoin on Ethereum.

Source: DAppRadar

Accurately measuring DeFi activity - aTVL

Early 2020, a new metric Become the standard way to measure the growth of the DeFi ecosystem. Total Volume Locked (TVL) is the primary measure of growth, usually denominated in USD, and is used to measure the value of assets locked in DApp smart contracts. Usually assets are locked to provide liquidity for activities.

Source: DAppRadar

Total locked volume is usually quoted in USD. Therefore, the price of the locked asset in the smart contract has a greater impact on the total locked amount than the amount of the locked asset.

In 2020, DAppRadar proposes a new indicator: Adjusted Lockup Volume (aTVL), which effectively solves this problem. In the case of rising prices of Ethereum and other altcoins, adjusting the locked amount will reflect the real growth of the assets stored in the smart contract.

Additionally, the Unique Active Wallets (UAW) metric can show whether activity is being driven by multiple users or a single whale. Additionally, it can show whether there is wider community involvement.

Data collected on December 17, 2020, source: DAppRadar

DeFi team merger

Another important Trends started to emerge towards the end of 2020. There were several announcements announcing that some projects were planning to merge. Yearn Finance, for example, partnered or merged with at least five different DeFi projects in 2020: SushiSwap, Akropops, Cover, Cream, and Pickle.

Source: DAppRadar

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Each project specializes in a specific direction, but each project has encountered difficulties in facing competition. Many of these mergers are more like developer acquisition strategies, with Yearn picking development teams that might be struggling.

Mergers are very common in traditional markets and this is the first merger done in a decentralized market. The merger may provide a paradigm and momentum for other DApps to follow.

In general, the DeFi ecosystem has made significant progress in recent years, and 2020 has been particularly impressive. In addition, it can be said that the DeFi ecosystem has created a blueprint for the development of other categories. DeFi is expected to facilitate further value transfers in NFT marketplaces and DApp games soon.

Foundation for growth

DeFi is the bottom layer of cryptoeconomic infrastructure Architecture, followed by NFT and the game industry have begun to adopt the DeFi model to develop. Rarible is the first NFT platform to incentivize users and provide liquidity mining by introducing the governance token RARI, while games use DeFi to create value and liquidity for playing games and earning coins.

Source: DAppRadar

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2020 NFT drives DApp growth

In the past few By mid-month, the hype surrounding non-fungible tokens (NFTs) for artwork and games had begun to grow. Many tokens emerged in 2020, offering different functions such as governance or applications, but all working towards the same goal of user acquisition.

Source: DAppRadar

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Rarible is the first NFT trading platform to provide token farming, which was quickly accepted by users and increased the platform's activity indicators.

During peak hours, Rarible traded over $1.5 million a day. This number has declined recently, largely due to the introduction of platform fees, which help reduce spam transactions and keep users honest.

Source: DAppRadar

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Another example of a governance token is the most popular DApp game Axie Infinity. Axie announced the launch of the ANX token, which inevitably affected the game and the activity of the Axie Marketplace trading platform, and the sales of NFT immediately soared, and the number of independent active wallets increased to about 800 by the end of the year.

On the other hand, OpenSea, one of the most famous NFT marketplaces, has yet to distribute tokens. Nonetheless, the platform has proven that it can attract and retain users fairly quickly even after a temporary dip in user loyalty, likely depending on user experience and the capabilities OpenSea already has.

In 2020, the interconnection between DeFi and NFT has become more and more obvious. More recently, a platform called NFTfi lets users lock up NFTs as collateral to borrow cryptocurrencies.

For example, NFT artwork, a piece of land from Axie Infinity, or a CryptoPunk collectible can now be used as collateral for borrowing money, for example.

Source: NFTfi.com

NFT sales showing real potential

NFT volumes are still relatively small, Nearly $63 million in 2020, or 0.02% of the total value of deals across all categories. More recently, NFT sales in DApps like Sorare and CryptoPunks have demonstrated the true potential of the category.

Sorare wants to be the leader in digital sports collectibles, recently a Kypan Mbappé card sold for 116.15 ETH, over $64,000, making it the most expensive in 2020 One of the collectibles deals.

Source: DAppRadar (ETH/USD exchange rate is taken from the value of the transaction day )

It can be said that CryptoPunks started this trend 3 years ago by introducing unique and limited NFT artwork. According to Larva Labs' top 60 sales chart, CryptoPunks sold a mind-boggling amount during their run, with prices ranging from 21 to 185 ETH per CryptoPunk.

Interestingly, there have been two large sales in the past two months, with two Punks sold for over $63,000 and $71,000 respectively .

Source: DAppRadar (ETH/USD exchange rate is taken from the value on the day of the transaction )

Axie Infinity's NFT has completed several super-large transactions in 2020. Looking at the top ten sales in 2020, two of them exceeded $130,000 and $97,000, respectively. Overall, Axie is the leader in large NFT transactions in 2020.

WAX builds NFT hub

Ethereum is not the only experience The blockchain where NFT popularity soars. Since its inception, the WAX Blockchain has focused on the delivery of NFT content for brand collaborations. On WAX, the first five major NFT sales sold out in record time and delivered NFTs to tens of thousands of users.

Source: DAppRadar (ETH/USD exchange rate is taken from the value of the transaction day )

In 2020, WAX not only released some very successful NFT items, such as the iconic Garbage Pail Kids Topps cards , and also introduced a new token economic model into the blockchain industry.

In short, WAX hopes to infuse the economic value created on WAX into the Ethereum DeFi ecosystem. More precisely, using what WAX does best — create, sell, and trade NFTs, linking the resulting value to Ethereum.

While the market for NFTs on WAX is still relatively small, their stature and expertise in a given category is likely to be another driver of future industry growth incentive.

Games

2020 is extremely challenging for DApp games A year, especially for games running on the Ethereum chain.

In early 2020, gaming was the largest category in terms of unique active wallets. At its peak there were about 10,000 unique active wallets. The number of wallets in this category dwindled to less than 1,000 in August 2020 and has been slowly recovering since then, as demand for DeFi applications drove up Ethereum gas prices.

The main reason for the decline is that DApp game users are unwilling to pay such high fees for the usual simple and low-cost transfers, while those who transfer millions of assets Willing to pay gas fees.

Source: DAppRadar

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This downward trend presents an ideal opportunity for other blockchains to catch up. For example, the newly forked Hive protocol has maintained a strong position in the number of unique active wallets. The main driver of this activity is Spnterlands, currently the #1 blockchain game with over 6,000 unique wallets active every day.

EOS is currently leading in the gaming category. Although user activity is only coming from a few separate DApps, namely Upland and Crypto Dynasty, these two games are constantly driving the growth of EOS. In 2020, they accounted for 42% and 16% of the total daily active wallets in the EOS gaming category, respectively.

EOS land trading game Upland has grown in 2020, recently launching Tipa Pay, which allows players to cash out proceeds from virtual land transactions into fiat currency. Before long, the game hopes to allow users to sell NFTs through its virtual businesses such as art galleries, nurseries, and car dealerships

In our view, Upland is A great positive example of a coin-earning blockchain game. Good user experience and most of the blockchain features hidden in the background make this game very popular.

Crypto Dynasty is another coin-earning game that has gained popularity over the past two years while maintaining activity. Currently, the number of unique active wallets for Crypto Dynasty is at least three times lower than it was at its peak, still around 1,500 daily active wallets.

It is worth noting that the recently observed downward trend can be attributed to game updates and downtime. Furthermore, we expect numbers to stabilize again in 2021.

Source: DAppRadar

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EOS and Hive are not the only blockchains having an impact on the gaming industry, layer 1 and layer 2 networking solutions are also finding their way.

Matic is one of the most popular layer 2 solutions tracked by DAppRadar, the number of unique active wallets per day is around 300, which is not too high but Still notable, with the biggest contributor being 0xUniverse.

Source: DAppRadar

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As mentioned earlier, Flow is another contender who has set their site in the gaming category. Flow is a layer solution that is fast, decentralized, and easy to develop. With brands like NBA Top Shot, Animoca, and Ubisoft on board, we expect more competition on the blockchain in 2021.

Coin earning game mode

Expensive gas fees in 2020 Almost killed gaming on Ethereum, and despite a recent pick-up, the main reason behind the growth is the rise of coin-earning game models.

The play-to-earn model is the latest development trend in the DApp game industry. This business model includes the concept of an open economy and gives any Provide economic benefits to participants who add value to the project.

Axie Infinity is one of the first blockchain games to introduce a coin earning model. For example, players can use Axie to play games, improve its functionality and sell it on Axie Marketplace (Axie Marketplace) or other similar platforms. In 2020, there have been many reports of players earning sustainable income from games.

It can be considered an investment opportunity and currently, the game has about 2,500 unique daily active wallets. After the launch of the AXS token on Binance in early November 2020, a new wave moved the game.

Source: Axie Infinity extended analytics by DAppRadar

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The mode of playing games to earn coins is not limited to these types of DApp games, it is also very common in another subcategory of Ethereum games - virtual world.

The virtual world of Ethereum

Currently, most virtual worlds DApps are all centralized on the Ethereum network. Projects like Decentraland, MegaCryptoPops, The Sandbox, and Cryptovoxels have made it possible to create entire universes on the blockchain. These universes contain real estate, objects, wearables, artwork, group activities, and more, enabling users to interact and own items in a virtual environment. Furthermore, these DApps create opportunities to participate in and profit from the virtual economy.

For example, MegaCryptoPops allows users to build buildings (such as offices) and rent them out to other users, the wallet gets game assets which can be easily exchanged for game tokens $MEGA. While other worlds are more like virtual art galleries, locations for events like concerts, exhibitions or festivals.

These games currently have a very limited user experience, but are still evolving, and it's clear that the developers have big plans for their worlds. It currently enables users to earn money while deeply experiencing the virtual blockchain world.

Source: Nonfungible.com (Token/USD conversion rate on the day of the transaction)

While most user activity in virtual worlds is still event-driven, these DApps can generate considerable The transaction volume is impressive.

Overall, most activity is clearly very focused on the Ethereum blockchain, while scalability issues make it difficult for certain classes and individual DApps to survive.

Nevertheless, interoperability or cross-chain bridging may be the key to success in 2021 in order to mitigate the risk of such activities in specific blockchains.

2020 Summary

Overall, 2020 has been exciting Unbelievable year. Despite the challenges of a global infectious disease pandemic, blockchain applications have emerged. The pandemic appears to be drawing increased attention to decentralized solutions such as universal basic income and globally distributed database management systems.

Ethereum dominated the landscape and maintained a strong leadership, but new competitors also arrived in 2020 to vie for the crown. The arrival of Ethereum 2.0 has become critical to maintaining leadership.

There is no doubt that 2020 is the year that financial services and products go to decentralization, and although various DApp categories have skyrocketed this year, the headlines have always belonged to DeFi . Looking ahead to 2021, we expect DeFi to play a bigger role than it did in 2020.

It can be expected that the DeFi ecosystem will form the basis of the crypto-economy not only for NFTs and games, but also for social, logistics and other DApp categories. NFT Marketplace applications continue to hit year-round records, suggesting that developers are beginning to band together to solve problems and take on competitors as new synergies are discovered. Mergers and acquisitions became a trend in late 2020 and are expected to continue not only in DApps but across the blockchain industry as a whole.

The data shows that Binance Smart Chain will become an important competitor of Ethereum in the future. The continued momentum has attracted widespread attention.

Flow is also a very promising contender in the gaming and NFT categories. Looking ahead to 2021, we believe user acquisition and retention will be the next challenge and a key metric for these two fledgling blockchains.

Finally, while regulation is not the subject of this overview, there is no doubt that it will be critical in 2021. New rules and regulations could impact how smart contracts work, temporarily shocking the industry, and regulation could even challenge the current blockchain infrastructure across the board.

Some important points

For blockchain and DApp in 2020 To add a little energy to the field, we asked some partners and media to interview them for their views on 2020 and the year ahead.

Note: The following are only personal opinions and do not represent the official opinions of DAppRadar.

Aleksander Leonard Larsen - Founder and COO of Axie Infinity

2020 It's been Axie Infinity's best year yet, with our user base growing by over 700% since the beginning of the year. Without a doubt, Small Love Potions has been the biggest success for us, and it's amazing how many players' lives have been changed by it.

2021 will be even better for Axie, we will have a major update to the combat system, the land game will be officially released, and use our Ronin Sidechains for expansion. The secret sauce, of course, is the Axie Infinity Shards, which allow our products to grow rapidly.

Tim Copeland - News Editor, Decrypt

Institutional Bitcoin adoption is the year The characteristics of Bitcoin mainly include Grayscale’s Bitcoin Trust Fund, and companies such as MicroStrategy directly purchase Bitcoin. I think it will be very interesting to see how Bitcoin develops now that there are so many rich people owning so much Bitcoin.

In terms of Ethereum, it has made technical improvements and started to take a big step towards Ethereum 2.0, and DeFi broke out this year. It will be interesting how much innovation can be done on this blockchain platform. But it is also worth mentioning that a lot of money has been invested in experimental smart contracts, and a large number of hacks have caused many investors to suffer huge losses. The industry is growing at breakneck speed and nothing seems to be stopping it.

Next year is likely to see more regulatory battles. Now that so many institutional investors and companies are exposed to bitcoin, regulators may see more reasons to get involved. They have been quite active this year, with the US Securities and Exchange Commission (SEC) cracking down on ICOs and proposed bills such as the Stability Act. But this is cryptocurrency, so it's very unpredictable.

Sebastien Borget – Founder & COO of The Sandbox

2020 Proves Gamers Are Connected The desire for gaming experiences, interest in virtual worlds is higher than ever, and Minecraft had 124 million active users in August alone. Some in-game events, such as Travis Scott's Fortnite concert was popular with 12 million players, and Roblox's stock market value is estimated at $8 billion, showing the potential of the game.

While these successes were built on their community, they did not do the players any favors, as the game's economy resides in siege, buying Items are locked inside. In 2021, that will change.

In early 2021, we will launch our play-to-earn season system and at the same time we will release the first playable beta version. Items earned by players in the game's 166,464 LAND (owned by players and investors like Atari) can be transferred to other LANDS, traded or sold for "SAND" (the game's cryptocurrency). Since NFTs are traceable and limited, items gain value based on scarcity.

In virtual worlds, we can design new models that drive community engagement in meaningful ways and deliver more value than we have yet explored for interoperability field, which has huge potential to unlock the true value of millions of NFTs.

Just games, there is still a lot of room for growth, such as experiments around governance, staking, and DeFi. Breakthrough sales of NFT-based crypto art and games last month hint at further growth in 2021.

Han Kao —— Founder and CEO of Crypto Briefing

If I use one word to To sum up 2020, it will be Bittersweet (bittersweet). Unfortunately, the global pandemic has highlighted the digital economy. As people and activities move online, and governments look to fund economic recovery, the arguments being made in the crypto community are starting to resonate with more readers.

Globally, people are having to deal with some very difficult times. However, we have seen that macro events and prominent traditional investors confirm the Bitcoin narrative, and DeFi is no longer a vain dream.

2020 has enabled many DApp developers to finally build and experiment at production scale. With more tools and more options, we should see more development and innovation, hopefully with more focus on the end user experience.

Matthew Lam —— OKEx Insights Analyst

Only represent Matthew’s personal views and do not represent OKEx Insights opinion.

I sum up 2020 as Progress. In particular, I have seen many developments in DeFi, NFTs, and CBDCs. Liquidity mining has become the #1 buzzword in the crypto community!

I believe that 2020 will be a year of "progress", and 2021 will be a year of "harvest"!

In terms of DeFi, I think AMMs and price oracles are worth watching! Meanwhile, seeing as China launches DCEP next year, it’s no surprise that Wall Street giants are racing each other to launch their crypto trading platforms and institutional-grade crypto custody solutions!

I think the launch of ETH 2.0 is a long-term price driver, and I am inclined to be bullish on the price of ETH next year!

Raindy Lu —— Marketing Operations Manager, Ontology

For us, this year’s A major win was the launch of the "Inclusive Pool" on the Wing platform, the first credit-based cross-chain pool built on the Ontology blockchain.

Going into 2021, our focus is on furthering the ecosystem by helping more DApps focus on self-managed ID and data protection services. Another goal is to further optimize product development and bring wider users to ONTO wallet, SAGA and Wing platforms.

We believe DeFi will continue its upward trend in 2021 as more players enter the space. This will lead to further innovations such as different combinations of staking or the further development of NFTs.

Antonio Madeira - Lead Advertising Manager at CryptoCompare & CoinTelegraph Contributor

2020 is DeFi A year in the spotlight as this is a newcomer to the chain and Bitcoin is firmly in place, shining brightly among large institutional investments.

I believe DeFi will start to show signs of maturing and other parts of the space will start to shine, especially NFTs. I think Bitcoin will continue to gain traction among institutional investors. I believe that the interest and value of many altcoins will continue to decline because most altcoins have no real use.

Justin Sun —— CEO and Founder of Tron

2020 is a great year ! I am very pleased with the progress TRON has made in 2020. Launched many new products, including JustStable, JustSwap, JustLend, Justpnk, SUN community, which laid the foundation for Tron's decentralized financial ecosystem.

We will focus on growing and scaling our DeFi infrastructure. Through the DeFi products built on our platform, TRON's DeFi projects will be based on JST, integrating decentralized lending, trading and other financial services. Then JST will evolve into a source of empowerment and become an important symbol of the entire TRON DeFi ecosystem. Our position in DeFi illustrates TRON's evolution from small success to industry leader and innovator.

DeFi will continue to grow in 2021 as it makes financial services accessible to many unbanked people and businesses. We will continue to develop the stablecoin ecosystem on TRON and invite more regulated stablecoins.
Interest in blockchain technology continues to grow, and today more large institutions than ever before are investing heavily in blockchain solutions.

Dirk Lueth – Upland CEO

One word: start. (Of course, I am referring to the beginning of NFT becoming mainstream).

2020 is not yet the year of NFTs. It wasn’t until the end of the year that we started to see the idea mature, the products become more complex, and we saw early signs of non-crypto fans starting to pay attention. Even though some NFTs have sold for thousands of dollars, this does not represent mass market adoption.

It can be said that once the daily active users reach more than 100,000, the blockchain will start to become mainstream. In 2021, the first companies will break this barrier. The big question, however, remains whether these new entrants have blockchain DNA from the ground up, or come from established companies adding blockchain functionality to existing games.

I think that transactions in the blockchain market such as digital art, collectibles and other assets will start to move to the multiverse because the latter can create better Content, User and Transaction Experience.

Finally: Tokenized assets from the real world will enrich the world of NFTs, will anyone own a Picasso? The lines between the digital and physical worlds will blur.

Dr. Jesse “aggroed” Reich – Founder and CEO of Sppnterlands

Sppnterlands did a great job great. In September, we reached 10,000 monthly active users for the first time, we saw new user growth of about 10% per month, and our social media presence continued to grow. All of these contributed to the success of our land sales, where the first lot sold out in 21 seconds and the second in 30 minutes.

We will add a second round of combat where players can see the board, game items and spells. To accomplish this, we had to sell items and spells, not just pack them together, but transfer the rights to mint them to the player. Landowners will harvest resources, construct buildings, slay monsters, and use all of this to craft items and spells, which can be rented or sold on the marketplace.

I think 2021 is an incredible bull market for bitcoin and cryptocurrencies. I see every type of business in cryptocurrency doing well and enjoying the largest transfer of wealth in the history of the world.

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