The launch of Ethereum in 2015 brought excitement about the future potential for smart contracts. Proponents of the platform’s decentralized apps (DApps), which use a flexible scripting language that is more flexible than Bitcoin, claim that it unlocks a plethora formerly untapped uses cases for the blockchain. DApps will transform traditional industries, solve bottlenecks, and revolutionize enterprise efficiency by allowing tokenized assets and blockchain-based legal agreements to be used in healthcare records and supply chain tracking. We are still waiting for the revolution, more than three years later.
Modern DApp Use
The Hard Truth. In sum, Ethereum’s top 10 smart contracts addresses account for just more than 29 million transactions. It sounds like the network is moving towards mainstream adoption.
This is the truth: The transaction volume was used to fund DApps, which are used for trading digital kittens, token sales, and decentralized exchanges.
This is according SFOX’s research, which is a cryptocurrency prime broker for high-net-worth individuals. It has backing from the Digital Currency Group (Blockchain Capital) and other organizations. According to SFOX, the data was collected for clients of the firm. The firm explained that it regularly reviews the use of blockchains in crypto assets that it supports.
The firm compiled a list with the most popular Ethereum smart contracts addresses using Jupyter Notebook to pull data form Google’s public Ethereum dataset. This was to determine which DApps were gaining traction in the community.
Source: SFOX
These results confirm a common concern among the community’s most critical and discerning voices: DApps are primarily used for token speculation and exchange. Only one of the 10 smart contracts that SFOX was interested in was a tokenized use case, and it wasn’t an ICO or exchange contract.
Decentralized exchange (DEX), contracts for Ether Delta (now called Forked Delta) were the most popular DApps. These data show that the two DEXs are the best hubs for trading ether and ERC-20 tokens. This is the most popular token standard for minting assets on Ethereum blockchain. Since its inception, Ether Delta has accounted to 10,354,398 transactions, while IDEX is at 4,590.376.
EOS
Ironically, Ethereum’s third-most popular smart contract was used for funding its main competitor, EOS. EOS launched its mainnet in June 2018. However, EOS had held a year-long continuous token sale. This ICO raised billions through 2,952,885 transactions. Tron and OmiseGo were also on the list with 1,967.331 and 1,350.274 transactions respectively. This placed the cryptocurrency platforms at fifth place and tenth place, respectively.
The only smart contract that doesn’t involve supporting exchange infrastructure or speculating is the digital Beanie Babies. CryptoKitties is a blockchain-based game that allows you to trade, breed, and collect digital cats. It has already seen 2,568,983 transactions in the last year.
Each cat is unique and has its own traits. They are based on the ERC-721 standard of non-fungible assets. The game was a huge success and sparked a lot of interest in the game. This led to high prices for some rarer kitties, which cost tens of thousands of dollar. This frenzied demand clogged Ethereum’s network, increasing transaction times and costs.
SFOX’s
The Inroads of Speculation and Innovation
SFOX’s only other notable smart contracts came from Bitcoinereum. This self-proclaimed “first Bitcoin mineable ERC-20 token” rang up 1,451,763 transactions and paid out mining rewards through its smart contract. The rest of the transactions are made by Bittrex and Poloniex, who have more than 5,000,000 shared transactions.
Ethereum DApps are not the only DApps currently in use. EOS has emerged as an important competitor and, depending on the day and transaction volume, surpasses Ethereum in users and transactions.
EOS tokens can still be used for the same purposes. EOS tokens can be used for gambling or smart contract-enabled gaming, which are two of the same applications as Ethereum.
These gaming DApps can be used for their own purposes, even if they feed gambling habits or fuel speculation. SFOX CEO Akbar Thobhani stated that CryptoKitties is doing an excellent job and that they are continuing to gain traction.
However, the technology is still in its infancy and smart contracts are far from the ones that futurists believe will underwrite loans, settle legal agreements, tokenize everything from equities and personal data. Thobhani stated that “it’s difficult to say anything particularly conclusive about broader DApp adoption” based on the sample size, even if this was the most-used DApp to date.
Conclusion
These are the first steps of an ambitious technology still learning to walk. They are steps. Smart contracts and DApps still function for their intended uses, regardless of how small or insignificant they may seem. They are laying the foundation for a future that may take a while as the space grows. Developers will have many problems to address, including security holes in smart contracts and scalability headaches. Smart contracts will eventually become enterprise-grade for consumers and enterprises.