What role has Ethereum played to shape the market for decentralised applications

Market sentiments have led to the belief that decentralised applications (dApps) depend on Ethereum blockchain for their growth. It is believed that Ethereum’s decentralised and open-source nature permits development of smart contracts and dApps for developers.

According to Alchemy, a Web3.0 development platform, total number of Ethereum transactions stood at 105.58 million for Q1, 2022. Furthermore, total number of Ethereum smart contracts stood at 1.45 million while daily active Ethereum addresses stood at 3,29,900 for the same period. “I believe Ethereum blockchain is an option among developers specialising in dApps. The merge has set the base for a new decentralised ecosystem with reduced costs, increased functionality and scalability, which will aim to facilitate faster development. Like traditional applications, dApps can monetise using various techniques, including subscriptions, transaction fees, digital goods, among others,” Prashant Kumar, founder and CEO, weTrade, a cryptocurrency-based platform, told FE Blockchain.

Insights from market research has shown that after Ethereum Merge, developers have hinted towards development of complex and sophisticated dApps. As reported by Cryptopedia, a cryptocurrency education platform, dApps such as MakerDAO, IDEX, Bancor, CryptoKitties, among others, carry the potential to increase the networking ability of Ethereum ecosystem. Market analysts have highlighted that dApps’ utilisation of Ethereum’s ERC-20 utility token helps with monetisation of their assets on different crypto platforms. 

“It is likely that the Ethereum 2.0 upgrade will further contribute to the growth and development of the dApps ecosystem. Many dApps issue their own tokens that can be used to access certain features or services on the platform. These tokens can also be bought and sold on cryptocurrency exchanges, allowing dApp creators to generate revenue through token sales,” Sathvik Vishwanath, co-founder and CEO, Unocoin, a cryptocurrency exchange, mentioned.

Reportedly, companies such as Uniswap, Dark Forest, PoolTogether, Gnosis, among others, make use of Ethereum to design dApps. Market experts have predicted that sectors which can potentially benefit from Ethereum-based dApps include finance, supply chain management, social media, real estate, and identity and authentication. Moreover, questions have been raised around Ethereum-based gas fees, and how it can vary depending on network demand and cost for dApps. However, BlockNative Corporation, a software company, emphasised that Ethereum Merge was able to create a technical environment for future gas fee optimisations.

“Decentralised Exchanges (DEXs) aim to generate more revenue by taking fees for every transaction. There is a monetisation opportunity for dApps in token launch activities, initial coin offerings (ICOs), donations and transaction fees, as the market aims to expand even in recession,” Ravindhar Vadapalli, professor of  blockchain & finance at Mittal School of Business, Lovely Professional University (LPU), an educational institution, said.

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