DappRadar 4D Report Review 2021: Expansion, Competition and Value Discovery

Original source: DappRadar

Original source: DappRadar

2021 could be the most pivotal year for the industry so far. And 2020 can be defined as a year of construction and preparation. This year, the entire industry has made great progress and positive results in both macro indicators and the most important indicators. The number of wallets and transaction volumes interacting with dapps are higher than ever, while the demand for NFTs and games has also increased significantly. The three main categories of the industry - Gaming, NFT and DeFi have all experienced positive trends and appear to be in an excellent position to continue to gain momentum and solidify for the future.

The NFT space has experienced one of the most impressive expansions overall, with cumulative transaction volume surpassing $23 billion this year. The integration of proof of ownership by holders and intelligent computational processes revolutionizes the way we approach digital art and collectibles. Collectibles such as CryptoPunks, Bored Ape Yacht Club (BAYC) and Art Blocks have become synonymous with the explosive development of NFT. Hollywood, sports stars, and big brands like Coca-Cola, Gucci, Nike, and Adidas are emerging in this space, offering different levels of NFTs. The appeal of these well-known brands has had a profound impact on the NFT and blockchain industries. Additionally, NFTs are also appearing at prominent traditional art auction houses such as Christie’s and Sotheby’s, opening the door for mainstream audiences who are not familiar with the term. NFT being named the best word of the year is enough to explain everything.

With all of these factors in play and hundreds of exciting projects launching every day, the demand for NFTs is at unprecedented levels. Marketplaces like OpenSea, Atomic Market, and Solanart make some of the most popular dapps. The value of these assets has risen substantially, with the lowest market capitalization of the top 100 collectibles now estimated at $16.7 billion. Pieces from specific collections are considered a store of value and have sparked another exciting trend: the subdivision of NFTs.

Not only NFTs, but blockchain-based games also performed well during the year. The play to earn trend, spearheaded by Axie Infinity, has helped the gaming category attract an average of 1.4 million daily active users now, almost half of the industry's usage. Most importantly, the societal impact of this trend, especially in emerging economies such as the Philippines or Venezuela, has attracted the attention of influential venture capital firms (VCs) who have invested value 40% in the category. million dollars of investment. The funds obtained will help the team to develop further. The proliferation of scaling solutions like Immutable X or Polygon puts the gaming category in a strong position for years to come.

Fueled by reports surrounding the Metaverse, blockchain-based virtual worlds, and all Metaverse-related projects, have experienced a considerable boost in valuation. Land values ​​in these virtual worlds have skyrocketed, rising as much as 500 percent and selling for as much as $2.5 million. The token backing this is one of the top performing cryptocurrencies, indicating the potential of this virtual space.

After 2020, billions of people have poured into DeFi, and the category is showing an evolutionary and more mature development trend. While Ethereum still dominates DeFi, the notoriously high transaction costs and low scalability issues have drawn more attention to DeFi on other blockchains. There is also an important trend in DeFi where influential DeFi protocols extend their capabilities to multiple chains in the so-called multi-chain paradigm. dapps like Aave, Curve, and SushiSwap, and helping networks like Polygon make an impact.

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important points

important points

In 2021, the blockchain industry expanded across different verticals; the number of daily unique active wallets connected to dapps increased 7-fold, reaching an all-time high of 2.7 million by the end of 2021.

The NFT market had its best year ever, with over $23 billion in volume, while the top 100 NFT collectibles had their lowest market capitalization of $16.7 billion.

In the news of Facebook's rebranding to Meta, Metaverse became mainstream; the blockchain virtual world generated more than $500 million in transaction volume and reached an all-time high market value of $3.6 billion.

Led by Axie Infinity, the revolution of earning money by playing games has reached new heights; 49% of the industry's unique active wallets (1.4 million) are related to blockchain games, driving the game's NFT transaction volume to reach 4.5 billion in 2021 Dollar.

The blockchain industry has taken a big step toward mass adoption; big-name VCs, brands, and celebrities have joined the space, attracting more than $27 billion in capital flows to cryptocurrency and blockchain companies.

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2.7 million unique active wallets use the dapp every day

In 2021, the dapp industry is showing clear signs of organic growth. At the time of writing, more than 2.7 million unique active wallets (UAW) are connected daily to blockchain dapps hosted on any of the more than 30 blockchain protocols tracked by DappRadar. Compared to 2020, the number of UAWs interacting with dapps increased by 592%. Growth is constant.

The first key uptrend came in April, when unique daily active wallets rose 67% from 630,000 to over 1 million. Two blockchains are the main drivers behind the surge in usage. Binance Smart Chain (BSC), launched by PancakeSwap, emerged as a reliable alternative to Ethereum’s high transaction fees. At the same time, Wax's Alien Worlds has also brought to the market a dapp that earns money. These two dapps gained attention early on. Both remain among the most used dapps across the industry.

Usage in the industry continued to rise, but in May, the crypto market suffered a major crash just hours after controversial tweets blew up over environmental concerns. A 33% drop in base cryptocurrencies including bitcoin and ethereum has hampered usage in the industry. Liquidation events happen in all DeFi dapps, and the most important one happens in Venus of BSC. Still, after nearly two months of stagnant growth, the play to earn and GameFi trends started to take shape in late July, underpinning the gaming industry.

Thanks to play-and-earn dapps like Splinterlands, and GameFi options like CryptoBlades, blockchain games are starting to attract more users than their peers. In the first 7 months of 2021, DeFi is the category with most UAW connections. However, at the end of July, we saw the aforementioned trend. The Gaming category is beginning to dominate, accounting for almost half of all industry activity.

In the first half of 2021, DeFi accounted for 57% of the overall industry activity, while NFTs and games combined accounted for 32%. In August, the dominance of the gaming category began to emerge, with 49% of the market in the industry connected through games. At the time of writing, gaming accounts for 51% of industry usage, while DeFi accounts for 37%.

The Philippines is a good example where Ronin's mobile wallet has an opportunity to attract users in a country where 25% of the population is unbanked. All in all, this is a pretty positive sign in terms of usage and a valuable opportunity for mass adoption in the coming months.

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Intensified competition in the industry

At the time of writing, DappRadar currently tracks over 30 blockchains, which is a significant increase from the 16 blockchain networks tracked at the same time last year. This is yet another example of industry expansion. The dominance of Ethereum in different verticals was strongly demonstrated in the last year, especially in the field of DeFi and NFT. Still, due to well-known transaction speed and cost issues, other blockchains are starting to attract users with their own offerings.

While some alternatives to blockchains, like Terra and Arbitrum with DeFi, or Hive, Wax, and Immutable with gaming, have focused on only one category, most of these networks have become full-fledged networks supporting overall products. ecosystem. At the same time, competition is more open than ever, which should be seen as a healthy trend across the industry.

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2021: The first year of NFT

2021 will be remembered as the year that brought NFTs to the masses. Although NFTs were conceived in 2014, NFTs will not start to have a noticeable impact until 2022. In 2021, the NFT field will generate a transaction volume of more than 23 billion U.S. dollars. Important trends such as randomly generated collectibles, mainstream celebrity involvement, or the rise of earning money in games were the main drivers of the record-breaking year for NFTs. The recent metaverse craze is the icing on the cake.

In February, Dapper Labs’ NBA Top Shot traded $226 million, accounting for 46% of the record NFT transaction volume. The next wave of Ethereum NFT collectibles is also coming, and it is necessary to emphasize that Flow’s collectibles are the key NFT catalyst this year and will also be a sign of NFT development in the future. As of this writing, NBA Top Shot is the fifth-most-traded franchise of all time with more than $747 million.

In the first six months of 2021, the NFT field generated a record transaction volume of US$2.5 billion, breaking the previous data in this field. However, in the third quarter everything changed. Over the course of several months, we have seen the NFT market reach $10.7 billion in transaction volume during this period after projects with strong communities, teams and value factors consolidated their blue-chip status. Projects like Art Blocks, CyberKongz, Loot, and Cool Cats have created an amazing market.

Next, we analyze the aforementioned trends that have contributed to the consolidation of the NFT market into its current form.

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In January, a project called Hashmasks can randomly generate NFTs without knowing what the owner will get. This provided the blueprint for almost every NFT project launched afterward. Randomly generated NFTs present a truly innovative form of expression that has positively impacted the art and NFT collectibles industry as a whole. Based on machine learning algorithms, NFTs metadata is automatically generated based on a series of predefined attributes and randomly distributed. At the time of creation, users don't know exactly what they bought, and according to the rarity of each piece, NFT becomes a kind of lottery. Although all elements of the collection are produced, they are being distributed and the metadata will appear in order at a specific moment after the sale is complete.

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The intersection of celebrities and brands with NFTs

Celebrities such as SouljaBoy, Steve Aoki, and Rob Gronkowski entered the NFT space at the beginning of the year, paving the way for the space's most pivotal period to date. Over the next few months, mainstream media rushed to cover NFT headlines after Paris Hilton, Eminem, and Stephen Curry joined the field. This trend became even more pronounced when NFTs debuted at Christie’s auction house, when Beeple’s 1/1 artwork “everyday: the First 5000 Days” sold for $69 million. Over the next few months, other 1/1 art NFTs and pieces from the CryptoPunks and BAYC collections fetched millions of dollars at auctions at Christie’s and Sotheby’s.

Arguably one of the boldest moves of the year came in the second week of December, when Nike announced the acquisition of RTFKT Studios. The blockchain-native fashion house has long been known for Metaverse digital fashion, collaborations with artists, and selling exclusive physical merchandise to NFT owners. This acquisition has also brought big brands like Nike into the camp of encrypted culture.

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add value

Additionally, the cultural and historical value preset by CryptoPunks transforms these pixelated NFTs into actual units of value storage. Especially after the VISA acquisition. In 2021, the average selling price of CryptoPunks will increase by 4,580%, and the average selling price is now $365,000. CryptoPunks is the second most traded collectible of all time, generating over $2.28 billion in transactions at the time of writing. The base price of the series has risen to 73 ETH ($321,500), with Punks selling for as much as $10 million.

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NFT projects become community-driven brands

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NFT games

Finally, an important intersection between NFTs and play to earn. The presence of in-game items and virtual plots is a key factor behind record trading volumes for NFTs. With the development of blockchain games and metaverse, the logo of game NFT will become more obvious. In an impressive third quarter, cumulative NFT sales exceeded $10.7 billion, with game NFTs accounting for 22% of total sales. And this is just the latest example of the enormous flexibility NFTs offer.

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The far-reaching impact of playing games to make money

Blockchain games are nothing new. Still, the monetization-by-game model is attracting record-breaking audiences in 2021. Mainstream media coverage of the societal impact of making money from gaming in emerging economies amplifies the reach. Likewise, high activity has attracted the attention of VCs, who invested record amounts in 2021.

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Rise of Axie Infinity

No other dapp has had such a profound impact on the industry as Axie Infinity. Axie Infinity, developed by Vietnamese studio Sky Mavis, is a game monetization dapp in which players can use Axie NFTs to engage in in-game battles and breed new Axies, or collect in-game items for different purposes. The game has a fully integrated tokenomics framework that allows players to earn income in the form of AXS and SLP tokens.

This monetization factor has had a major impact on emerging economies such as the Philippines. The positive impact on our society, coupled with the migration to the Ronin sidechain, has resulted in a massive increase in the usage and value of dapps.

Axie had about 20,000 daily active users in March. This is understood as off-chain data, i.e. the wallet does not need to be connected to play the game. At the time of writing, that number is over 2.5 million. This represents a 12,400% increase in its user base in nine months.

In addition, Axie NFT has become the largest collection of NFTs in history with a historical transaction volume of nearly 4 billion US dollars. In Q3, Axie accounted for 19.5% ($2.08 billion) of the record $10.6 billion in NFT trading volume during the same period. Axie's rise has been nothing short of amazing.

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Token economics are critical to the success of play to earn

There is no doubt that Axie is a great contributor to the gaming space. But in other networks, play to earn and GameFi dapps also had a notable impact. Like Axie, these games have attractive tokenomics designed to incentivize a passive income factor.

Splinterlands, a trading card earning game on the Hive network, became the most popular game active on-chain, with over 350,000 UAW users participating every day. The team behind Splinterlands launched the SPS token in late July and has fueled activity in the game since. As the governance token of the game, SPS can be obtained through battles.

Since the launch of SPS, the player base has soared 1,406%, and transaction volume has soared 448%, reaching 1.65 million transactions in the third quarter. While the development of the game is tied to tokens, the team behind the game has done a lot of continuous improvement and development.

These are a big reason why gaming has overtaken DeFi as the most used category in the industry. Both programs have solid economic designs. The token economics of games is one of the most critical factors in the field of game revenue generation. Alien Worlds and Splinterlands shows the situation. Also present in BSC.

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BSC case

Starting from a stable DeFi product, BSC will slowly become the position of GameFi in 2021. BSC is an active favorite after Alien Worlds and Axie Infinity were consolidated as top gaming options at the end of July.

The first BSC game with high usage in the Binance brand network is CryptoBlades, a fighting game where users can earn SKILL, the in-game currency.

In August, CryptoBlade became the most popular game as measured by UAW alone. On August 6, it peaked with 406,000 unique active wallets connected to the game dapp, however after that, it started to decline, with the game seeing a 95% drop in usage in September. This negative downtrend is closely related to the price of SKILL, which suddenly dropped by 95%, resulting in a negative reputation.

A similar situation occurs in other BSC games. Most recently, CryptoMines was forced to shut down as the price of the game’s native token, ELEMENT, plunged 99% in three days.

While BSC games may be losing credibility, one game stands out: Mobox. Mobox is a game dapp with a large number of DeFi functions embedded in its game mechanics, which also incorporates NFTs as playable characters. It's the true face of GameFi. Mobox has managed to retain its user base and is currently the fifth most popular game in the industry, attracting an average of over 24,000 UAW users per day. Whether other BSC GameFi projects can retain their player base like Mobox remains to be seen.

VCs pour $4 billion into blockchain games and infrastructure

The latest craze for "playing and earning games" has attracted investment attention. After investing just $80 million in 2020, venture capital firms invested a record $4 billion in blockchain games in 2021. In 2021, investment in blockchain games and their infrastructure has increased by 5,000% compared to the previous year.

The trend started with a strong investment. Following NBA Top Shot's impressive performance earlier this year, a group of angel investors including Will Smith, Michael Jordan, Stefon Diggs, led a $350 million investment in Dapper Labs and CryptoKitties, the team behind the NBA series, Including the popular NFT breeding game CryptoKitties.

Investments in the second half of the year are more valuable. In September, French startup Sorare raised $680 million in funding led by SoftBank and soccer stars Gerard Piqué, Ferdinand and Antoine Griezmann. That same month, layer 2 network Immutable X raised $77 million in funding, while Dapper Labs raised another $250 million.

The record amount of capital invested in the space is just another sign of its positive outlook. Not only will these groups have more financial power to continue growing, but the individuals behind some of these investments will provide these groups with a valuable intellectual resource.

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2022 will be even bigger

After a strong 2021, the future of earning while playing looks brighter. The substantial amount of money raised has certainly provided the team with the capital to continue developing and improving their existing products. But perhaps more importantly, the masses are beginning to realize the power of NFTs and earn money by playing games.

By 2022, existing games will have additional game mechanics enabled. Axie Infinity’s virtual land Lunacia is one example, which will unlock additional game mechanics and provide additional benefits to landowners in leading gaming dapps. The Sandbox, one of the most important virtual worlds, is currently in alpha and is expected to continue moving forward in 2022. Meanwhile, Splinterlands may also dabble in virtual land sometime next year.

4D long article reviews Dapp in 2021: expansion, competition and value discovery

Earning games coming soon (Ember Sword, Illuvium, Mirandus, Aurory)

Solana is another network that will be launching highly anticipated games over the next year. Star Atlas, a AAA-level open world space exploration strategy MMORPG based on Unreal Engine 5 developed by Epic Games, is one of the most anticipated games. The play-and-earn dapp will involve an entire economy backed by carefully designed tokenomics and has secured multi-million dollar investment led by Animoca Brands. While full gameplay won't be available until next year, mini-games and virtual world exploration will be available in 2022.

Another network to monitor closely is the one managed by Gala Games. The startup, led by Zynga co-founder Eric Schiermeyer, is focused on building truly decentralized blockchain games. Gala community members can own nodes that will eventually become their decentralized network. So far, the startup has only launched Town Star, which is also a earn-to-play game that rewards players with GALA, the network’s native token, and Town, the game’s token. Additionally, Gala will launch Mirandus, a fantasy RPG that is one of the most anticipated titles of 2022. Gala will also run the arena game Spider Tanks, the space adventure game Echoes of Empire, the tower defense game, and the recently announced Walking Dead game.

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Metaverse-Related Assets Soar to Unprecedented Value

The future of the Metaverse and virtual worlds is already bright thanks to the success of NFTs and blockchain games. The overall outlook was even more positive after Facebook announced a rebranding.

Without a doubt, virtual land NFTs are one of the most intriguing aspects of the blockchain-based Metaverse. These NFTs allow owners to build experiences while embracing decentralization, inspiring creativity and imagination. They also unlock the monetization aspect, as these virtual plots can be rented out to third parties or simply used as rentable investments.

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land value

Since the release of Meta, the value of virtual plots has skyrocketed. As one of the important players in the metaverse, the average price of virtual land in The Sandbox has increased by nearly 500% since the end of October. In November, the average transaction price for virtual land on The Sandbox was $14,800, a significant increase from October's average sale price of $2,500.

Similar situations have been observed in other blockchain virtual worlds. Decentraland, a blockchain virtual world running since 2017, has also grown the value of its plots. The value of virtual land in the platform is up 116 percent, with an average transaction price of $25,000 in November. Meanwhile, CryptoVoxels digital land sold for 25% more than what was registered in October.

In the end, virtual land significantly increases the value of the entire NFT market. In October, the lowest market capitalization of the top 100 NFT projects was estimated at $16.8 billion, of which virtual land accounted for only 8%. A month later, the market value of virtual real estate rose to $4 billion and now accounts for at least 25% of the minimum market value of NFT.

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Explosive Growth of Metaverse Tokens

Like virtual real estate, the cryptocurrencies backing Metaverse-related projects, including several earning dapps, have surged in value over the past few weeks. Despite recent signs of decline in the cryptocurrency market, Metaverse tokens, including those supporting blockchain games, are still outperforming most of their peers.

GALA, the native token of the Gala Games ecosystem, has been one of the best performing assets in the blockchain industry and any other industry globally. This year GALA is valued at 31,500%, easily surpassing any type of asset. Axie Infinity’s governance token, AXS, also performed well. In 2021, despite the recent market decline, AXS is still valued at over 20,800%.

The metaverse will become a parallel reality space where we socialize, trade, entertain and even work. This space will transform the way we currently live as it can create a whole new economy that caters to the evolving digital needs and preferences of a virtual society. Although the Metaverse appears complete, it still has room to grow. The recently launched WorldWide Webb has laid the groundwork for an interoperable virtual world. In this space, virtual NFTs from different projects can access the functions of the game. All in all, the Metaverse and the game monetization model will continue to dominate our growing industry.

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$189 Billion in Assets Locked Across All DeFi Protocols

Although the impressive expansion of the NFT and gaming categories is often overlooked, the performance of DeFi in 2021 is also very positive. After 2020, DeFi has become the most critical category, showing a growth trend. As of this writing, the industry's TVL is $189 billion, up 767% from the previous year.

Two key trends are observed in the DeFi space in 2021. First, several DeFi dapps like Aave, Sushiswap, and Curve have scaled their services to multiple networks simultaneously in a so-called multi-chain paradigm, hindered by Ethereum’s infrastructure. This trend paves the way for other blockchains to gain ground in the space. Ethereum’s TVL has increased by 455% year-over-year and currently stands at $115.2 billion. While the Ethereum network still dominates the DeFi space (approximately 61% of industry TVL), related blockchains have also exploited Ethereum’s limitations to grow.

BSC quickly positioned itself as a DeFi alternative, attracting millions of users, mainly due to panakeswap's friendly interface. PancakeSwap, the most used on-chain data-based dapp, played a key role in helping BSC position itself as the second blockchain in terms of TVL ($21.9 billion at the time of writing). While BSC DeFi dapps like Venus suffered severe liquidation following the crypto market crash in May, BSC has regained some usage and value lost after the adverse event. Dapps such as the lending protocol Alpaca Finance, as well as a series of Dapps following the PancakeSwap recipe for success, have helped BSC establish a strong position behind Ethereum.

After losing its crown as the most used category, the DeFi space slowly recovered in the third quarter. The high usage of Solana and Avalanche has boosted the overall usage of DeFi. In Q3, an average of over 655,000 unique daily active wallets used DeFi dapps, accounting for 39% of the industry as a whole. In the fourth quarter, that usage grew 47 percent, and games now still account for 44 percent of industry activity.

To be precise, Solana is one of the most improved blockchains in terms of TVL. In 2021, the launch of DeFi dapps such as AMM Raydium, DEX Serum, Sunny, Saber, Orca, and Solend makes Solana one of the most diverse DeFi in the space. Coupled with a practical and functionally friendly wallet, the Solana exceeds expectations. In October, Solana's TVL exceeded 10 billion US dollars, posing a serious challenge to BSC's second place status. As of this writing, Solana is the fourth-largest blockchain in terms of TVL, worth $11.3 billion.

After six months of holding a TVL of about $200 million, the Avalanche network’s metrics have ballooned to the current $10.9 billion. The main reason is the launch of a $180 million liquidity mining program that includes popular DeFi dapps like Curve and Kyber, as well as Avalanche’s own Trader Joe’s. In August, Avalanche surpassed $2 billion in TVL and has been growing since then. Avalanche competes with Terra and Solana for the third spot in the DeFi ranking, just behind BSC.

The existence of scaling solutions in the DeFi space is becoming increasingly evident. Polygon, Ronin, Arbitrum and other blockchain alternatives now have attractive DeFi options where users can collateralize assets with Ethereum without incurring high transaction fees. This trend also suggests that Ethereum will eventually become a network of whales as the gas fee exceeds a certain threshold.

Despite living in the shadow of NFTs and games in 2021, the DeFi space has improved considerably to become a more mature, competitive and complete ecosystem. Still, there is room for improvement, especially when it comes to security.

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Safety

Safety

Due to its encryption mechanism and decentralized infrastructure, blockchain has one of the most secure technical frameworks ever created. Nonetheless, flaws in smart contract code, wrongdoers or simply poor security practices can lead to undesirable outcomes and negative consequences.

According to Rekt's database, more than $1.9 billion has already been lost in 161 attacks in 2021. For perspective, a total of $575 million has been stolen over the past five years. Its value is attracting wrongdoing, so this needs to be mitigated.

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Supervision

Supervision

A growing number of security concerns, including breaches and fraud, point to an urgent need for increased regulatory activity. Not only to protect blockchain users, but to increase trust within the industry.

In 2021, the SEC has failed to properly address the need to regulate the industry. U.S. authorities have always taken a cautious and strict stance on cryptocurrencies and have historically denied the creation of crypto-based ETFs. Geo-restrictions on U.S. citizens need to be monitored, as they are denied the right to participate in routine activities such as airdrops, or even the opportunity to participate in playing games to earn money. It appears that the next wave of digitally-led finance will take place outside the United States.

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The legal status of cryptocurrencies around the world; Source: World Economic Forum

In Europe, regulation around the industry is more specific. Perhaps motivated by the conceptualization of a potential digital euro. The European Central Bank (ECB) and the European Commission have been involved in discussions on this topic. Additionally, the European Blockchain Partnership, in collaboration with the European Commission, is expected to launch a pan-European regulatory sandbox sometime in 2022. Clearly, the Eurozone is far ahead of the US market.

Meanwhile, in Asia, the situation is even more dire. China has banned Bitcoin mining several times, and 2021 will be no exception. In China, all crypto-related activities are considered illegal, potentially clearing the way for a digital yuan. In India, this method is also restricted. However, Indian authorities and policymakers have reportedly made progress in regulating such assets.

On the other hand, the Southeast Asian region has made some progress in terms of cryptocurrency regulation. Singapore is a country that accepts cryptocurrencies and has a framework in place. The Monetary Authority of Singapore has adjusted the Payment Services Act (PSA) to reduce the financial risks associated with such assets. The Philippines, another country with close ties to the industry, has implemented guidelines for managing digital assets.

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intellectual property

intellectual property

In terms of intellectual property, blockchain technology offers a plethora of applications. This includes: tracking the origin of items, authenticating individuals, and of course managing registrations and licenses. At the same time, intellectual property rights pose some challenges for the industry itself.

A well-known case happened when Sushiswap forged the Uniswap V1 contract and implemented a vampire attack, resulting in the loss of millions of dollars in liquidity. So far, Uniswap V3 contracts are licensed to protect them from intellectual property theft. Something similar happened to Aave. In the latest governance vote, Aave token holders decided to license Aave V3’s upcoming lending contract.

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user retention

user retention

The industry is constantly evolving and there are more users than ever before. Nonetheless, leading projects must continue to meet their challenges and continue to make their user base a top priority.

On the other hand, there is the example of Sky Mavis. Due to the popularity of Axie Infinity, players have had issues connecting to the site at various times of the year due to high traffic. The Sky Mavis team responded quickly and has been active on social media platforms Twitter and Discord. Not only did the game maintain its user base, but it also gained over 2.5 million DAUs. Sky Mavis is a good example of a dapp with a reasonable retention rate as it continues to improve the game.

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misleading point of view

Individuals unfamiliar with the capabilities of blockchain technology can easily be misled about the technology. Take the most mainstream narrative: it revolves around the idea that blockchain and its underlying use cases like NFTs and games are a threat to the environment.

In fact, the proof-of-work (PoW) consensus mechanism used in the first iterations of blockchains like Bitcoin or Ethereum is far from energy efficient. Bitcoin’s annual energy consumption is equivalent to that of countries such as Chile or Switzerland for an entire year. However, this mechanism is less used due to its operational drawbacks such as low speed and low scalability.

Making basic information as accessible to as many people as possible is crucial. This will effectively reduce the number of false assumptions that create a negative perception of the industry as a whole.

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Summary and Outlook for 2021

2021 proves the potential of the blockchain industry. Its rapid growth is unmatched by any traditional industry. As for the social impact of blockchain dapps, such as Axie Infinity in the Philippines, its experience is comparable to those scripts from Hollywood.

Thanks to the frenzy surrounding avatars and artistic NFTs, mainstream gaming is finally waking up to the power behind this technology. The transaction volume of $22 billion shows the growth of user demand for NFT, of course, this is only the tip of the iceberg. The potential of these assets is huge, and its impact far exceeds that of tokens in the industry.

Like NFTs, people are starting to realize the advantages blockchain-based games bring. The story around play-to-earn and the Metaverse is just beginning, and it may transform the traditional model into a new model where individuals can fully control their assets and share their interests in a new decentralized digital community. Use your own time and operations to get benefits. The existing intersection between blockchain-based games and NFTs currently allows players to truly own and manage their playable assets. Most importantly, they can earn more cryptocurrencies by playing games. From this point of view, it is not impossible for projects around these two themes to experience a rapid development in the future.

While most of the attention has been on NFTs and games, DeFi is also continuing to grow. The presence of the related blockchain is also getting stronger, even pushing TVL to a new record high. Among them, Terra, Solana, and Avalanche have all made great progress, and they can be regarded as strong competitors of BSC and Ethereum. At the same time, there will be an increasing need for scalable solutions in the future.

Finally, although security, regulation, intellectual property and other related topics do not receive high attention, they will undoubtedly play an important role in 2022. The industry should be ready to learn more about these trends as we get closer to mass adoption.

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important point

The following content comes from the views of some partners, top dapps and journalists and their industry predictions for 2022. Note: These opinions do not represent the position of DappRadar.

Jeffrey Zirlin: Co-Founder and Head of Growth, Sky Mavis/Axie Infinity

From Axie's perspective, 2021 is an incredible year. Over the past year, Axie Infinity has evolved from a game concept into a project with a rapidly growing ecosystem and an incredibly dedicated community of almost 3 million DAU. This player growth, combined with the launch of our decentralized exchange (Katana), has spurred massive usage of our Ronin blockchain. Today, Ronin’s transaction volume has grown to approximately 4x the daily transaction volume of the Ethereum chain, and this growth pushes us all to prepare for mass adoption in 2022. We plan to expand the team to increase our ability to run features in parallel. This will give us long-term benefits as we juggle game distribution, infrastructure upgrades, and incentives for third-party development.

Exponential growth comes with its fair share of challenges. This year the focus is primarily on infrastructure upgrades with Ronin. The big theme for 2022 will be gameplay upgrades and more content releases.

When it comes to Axie Infinity, we're always looking for ways to upgrade the game and bring an even better experience to our community. Battles V2 (Axie Infinity: Origin) is our massively upgraded battle system that lowers the barrier to entry by providing entry-level Axie, making Axie more fun and faster and easier to share with friends and family. Through this new system, more users will be able to fall in love with this game before officially logging into the system.

In terms of technology, we believe that in the future all in-game resources and items will be freely tradable tokens, and will continue to achieve this goal through our DEX, proprietary sidechain and Ronin mobile wallet. In the future, The Mavis Hub, our platform for publishing games on pc and mac, will seamlessly connect to our proprietary Ronin blockchain and will support game developers to build and distribute blockchain-backed games. We see Axie as a game in a game world built on top of our technology. One of our visions is to leverage UGC so that the community can build better experiences on top of Axie through the SDK.

In the end, our community base was so strong we started bringing them into various DeFi services. Following the success of Katana, the #2 decentralized exchange, we will start offering new financial products to strengthen our user base. For example, we plan to start issuing player cards directly from the player's in-game wallet.

I am very interested in social tools, which allow dapps to increase user engagement in a scientific way, thereby driving data growth and increasing player stickiness.

ApeSwap team

In 2021, we have experienced a year of unprecedented growth and adoption of cryptocurrencies and web3 technologies. For all the hype to sort through, the substance behind it has forced the world to take cryptocurrencies seriously. From institutions putting Bitcoin on their balance sheets, to NFTs entering the mainstream, to dozens of new EVM-compatible chains, to the prevalence of DAOs, it's clear that 2021 has been an interesting and crazy ride. 2021 will always be a year worth remembering for ApeSwap. We have been very fortunate to have seized such an opportunity from the very beginning to build a community that truly believed in us. Nurturing the community has always been our top priority, and it's the main reason we'll never stop building.

We've come a long way through all the ups and downs. When we say that the biggest and most important victory we have experienced is the growing global community since its inception, we are sure we speak for all the users behind ApeSwap. We believe the outlook for cryptocurrencies in 2022 will revolve around the three S's: sustainability, shakeouts, and sovereignty.

Sustainability and volatility go hand-in-hand — now that some of the hype around core DeFi apps and NFT projects is fading, it’s impossible to simply fork a protocol and see success. 2022 will bring sustainable token economic models to the table and weed out those who cannot adapt. Also, sovereignty will play a role here, as regulators will no doubt take notice, and regulation will directly affect sustainability and shocks by deciding where and how these agreements are built. By 2022, ApeSwap is expected to take advantage of the anticipation in the shift. Our goal is to become a more sustainable, DAO-centric protocol that expands our ecosystem of service offerings both horizontally and vertically.

We expect three major verticals in 2022: Metaverses, GameFi, and sustainable DAOs. With the global focus on the Metaverse in 2021, it's no surprise we're optimistic about technology in 2022. The key here is that a true metaverse economy needs to provide digital scarcity. While mainstream players will aim to capitalize on this, they will need to rely on crypto-based services for this success.

While GameFi can be said to "take off" in 2021, the performance of these games is not very good, and the game mechanics often lag behind those off-chain games. The experience of clicking and waiting for 15 seconds after entering the game is not friendly to players, and it is expected to optimize this experience in 2022. The key to real growth lies in whether game studios can release high-quality products to attract players who are loyal to the game itself, rather than those who pursue a "play and earn" experience.

Finally, who could forget Decentralized Autonomous Organizations? While "DAO" has been a buzzword since 2017, it's 2021 where the concepts really blossom. The concept of a DAO started to take on a whole new meaning, and launching a DAO seemed the only right way to maintain the agreement long-term. It seems more and more projects realize this and are on track to make these advances in 2022. When we mix these three next-gen technologies, magic starts to happen, so we're very excited for 2022!

Sebastien Borget: COO and co-founder of The Sandbox

It’s a year of celebration for us, as The Sandbox has had a hugely successful 2021. This is a result of accelerated growth in the dapp gaming space, and also thanks to our integration of gaming with the metaverse. In terms of business, our achievements include: 1.1 million connected wallet users, GMV to date has exceeded 216 million US dollars, and completed a 93 million US dollar B round of financing, which will help us to upgrade more in the future , allowing gamers, creators, brands, IPs and celebrities to interact with each other through virtual experiences, whether it’s games, live concerts or social events. We have seen more and more brands and IPs want to interact with fans in our metaverse, and so far, more than 200 brand partners have registered with The Sandbox to own virtual LAND and create and interact. This includes Snoop Dogg, who is creating multiple experiential events for the Snoopverse, including his mansion, a host of NFTs and avatars, live concerts, and more, as well as entertainment brands like The Walking Dead and The Smurfs, apparel brands like Adidas and companies like Binance. blockchain brand.

On the gaming side, we've opened up our alpha testing to players, and it's been very exciting to see players interacting in The Sandbox. In terms of how to better play the play-to-earn mechanism and social experience, we have obtained a lot of high-quality feedback from more than 20 experiences shared so far. After years of hard work, we can see that the entire ecosystem will be launched in 2022 Melted together when rolled out.

The downside is that as more and more people realize the potential of blockchain and NFTs, a few (including some in the traditional gaming industry) want to do something about it. I think it's understandable to react with fear when you see changes to your currently successful ecosystem, so we need to keep explaining the benefits to players and creators. This is what I'm doing as president of the Blockchain Game Alliance. The Blockchain Game Alliance is a non-profit organization composed of 290 key members of the industry. We just conducted a BGA survey and 43% of members said that education about the core ideas underpinning blockchain games is the next hurdle we must overcome.

We envision that within 10 years, the Metaverse will profoundly change the way we think about work, social interaction, gaming, and the economic and employment opportunities it creates. In 2022, we will see play-to-earn ("play to earn") models emerge more fully in gaming dapps. Now, "playing and earning" has become a mechanism. In 2022, this will become a reality as more games, including The Sandbox, allow players to "play and earn" (play games to earn money).

Likewise, the Metaverse is now well established in today's lexicon, but we'll see it move more fully from concept to reality in 2022. Having said that, we have a lot of exciting things coming to The Sandbox in 2022, including the official launch of our metaverse in the first half, players being able to create on the LAND they own, with the launch of The DAO, and Emergence of staking and voting mechanisms for SAND, LAND, and AVATAR holders, first virtual concerts by Snoop Dogg and other artists, announcements about partner experiences, and more. We also want to expand from PC to mobile platforms, which will help unlock growth potential in Asia and other regions where mobile is very strong.

By 2022, I believe that NFT will transcend and change the entire culture, media, art, music, games, food and metaverse. Gaming is an area I really focus on. We have companies like The Sandbox that have been preparing for this moment for years as we have built our ecosystems, tools, technology, etc. together. We also have some late entrants, such as mainstream game publishers, who now see an opportunity and are trying to jumpstart their plans. Both gamers and investors are interested in the game Metaverse becoming (virtual) reality.

I expect major announcements and bold visions to be expressed in 2022, but more importantly, a series of game dapps will come online to attract players, and more people will discover the benefits of "play and earn" games.

Art Malkov: Head of Blockchain Growth at IoTeX

2021 is a year full of opportunities and unleashed potential. Looking back at the progress we've made since the beginning of the year, you can see how quickly the industry has grown. At IoTeX, we have achieved many milestones in project development, which proves that this global community is realizing the possibilities of blockchain. In 2021, innovative games will enter the user's field of vision, enter the game rankings, and promote their own innovative ideas, which was impossible before. Hearing blockchain, DAPPs, and NFTs being talked about in such a mainstream environment is a testament to the reach and curiosity people have about the space. At IoTeX, we are focused on how to realize the vision of the Internet of Trusted Things.

2022 will be the time when projects will truly work together in partnership and collaboration to bring maximum innovation and optimized functionality to each network. Now that Web3 is gaining traction in the mainstream, the focus will turn to how we can make Dapps more user-friendly, accessible and appealing to the general public who may not yet fully understand blockchain. At IoTeX, we plan to launch hundreds of Dapps in the next year. This means providing users with the best possible experience by providing users with a complete ecosystem of DeFi, GameFi, DEX, etc., so that users can look forward to the coming year.

One of the top-performing categories of dapps is play-to-earn games. Not only does it showcase an interesting, potential side of the space, but it helps people simply understand how they can start to reap real rewards and what Web3 really is. We saw the massive growth of DeFi in 2021, and by analogy, we can imagine how successful it will be in 2022. The most exciting thing about IoTeX is the new category of MachineFi, which connects real-world devices to the blockchain, allowing users to own them and monetize them. Of course, this is only the beginning of more dapp categories, and 2022 will be an impactful year for this growth.

Elaine Song: Hedera Hashgraph, HBAR Foundation

Professionally, 2021 is about creativity. Compared with Okcoin before, I got a new idea in the HBAR Foundation's Hedera ecosystem, and I wanted to get closer to the innovations originating from the protocol level. In fact, a lot of the cool use cases that people are exposed to come from the advancement of encryption technology. Still, it’s not exactly a win or a loss, but the regulator’s focus on the cryptocurrency space is certainly a positive sign. The fact that there's more scrutiny from regulators means that what we're doing is working, and I think that's kind of the way to maturity. More importantly, the community is forming its own views on how to manage and respond in a way that is consistent with the core beliefs of cryptocurrency.

Of course, the metaverse is also the focus of attention in the coming year! In 2022, I believe that encryption technology will naturally enter the mainstream view. There are many things in our daily lives that could be done better with encryption, and we are now at the stage where we can make this happen, and Hedera and HBAR will be at the forefront of this. For us, 2022 will take advantage of HBAR to achieve this goal and bring a better experience to crypto users.

Regarding the metaverse, I feel like how DeFi now encompasses most of all crypto activities, the metaverse will grow and become more specialized. It also means it innovates in breadth and depth, which I think will be a very important attempt to flesh out this new era of technology and human interaction.

Raindy Lu: Director of Marketing and Communications, Ontology

For me, 2021 is the most exciting year for cryptocurrencies, we have witnessed the ups and downs of the entire market, and more and more serious discussions in the society about regulation. The flourishing development of the NFT field can be regarded as an important "victory". Through NFT, art creators can actually own the copyright of their works, thereby avoiding the problem of piracy, an advancement only possible with the help of blockchain technology. The fly in the ointment is that people only focus on how to make money from NFTs, not the true value of art. To be honest, the motivation of NFT creators is also profit-driven.

I think the focus in 2022 will be on the infrastructure of Web3, especially decentralized identification (DID). The metaverse is a fusion of the real world and the digital world, but how to identify the same user in different DAPPs and how to manage them may be a big problem. Everyone should have a unified DID, bind it to the user's encrypted wallet address, to allow access to NFT, verifiable certificate (VC) and all encrypted local information. It can even be KYCed if necessary. More importantly, DIDs should be self-created. Based on DID technology, we can further expand more related applications in the future.

Ontology plays an important role as a contributor to the Web3 infrastructure. We've spent years perfecting our product and technology, and now we're launching the Ontology EVM Fund to go beyond where we are today. Through ONTO Wallet, Wing Finance, and OScore, Ontology has demonstrated a real Web3 application to a certain number of real users. We believe that 2022 is poised to achieve even more.

I think that as users become more sophisticated, the user base of dapps that lack security and decentralization will continue to shrink, especially those related to DeFi. There is a high probability that games will become popular in 2022, because they have attracted great attention from individual and institutional investors. Considering the goal of building a decentralized metaverse, I think this is indeed the genesis year of Web3 dapps, such as DID, reputation, DAO, and metadata dapps. All of the above are powerful tools to attract more people to the field.

Sarojini McKenna: Alien Worlds CEO

2021 is the year of the rise of blockchain games, and we are excited to see how it develops. Alien Worlds, Play & Earn, and other blockchain games have all been hugely successful, growing in both appeal and user numbers. When Alien Worlds began to enter this field more than a year ago, only a few people understood the concept of NFT. And now, NFT has entered Christie's (Christie) and Sotheby's (Sotheby's) auction houses for display, and we can even see some discussions about them on the "Tonight Show" (such as Paris Hilton and Jimmy Fallon on "Tonight Show") "to talk about NFT). This allows people to see more possibilities of NFT, which can provide various functions and add value to players and communities. We are honored to be an early demonstration of this technology, utilizing NFTs as practical and functional game elements in Alien Worlds.

The possibility of Alien Worlds in the metaverse in the future is also very worth looking forward to. With the solid foundation of Alien Worlds, you can see great opportunities for community growth and new user participation in Alien Worlds mining activities on WAX and quests on BSC. Seeing communities like this emerging around NFT events, using the tools and mechanics we provide to create their own games based on their own culture and motivations, is definitely a major win for us.

It is predicted that there will be large organizations or companies participating in and investing in these truly decentralized projects. Because they will realize the power of the unstoppable network effect, and then jump into it to achieve greater success.

We look forward to introducing more DAO possibilities, hope to spread the DAO concept to more people, and work on making DAO more accessible. Decentralization and community are at the heart of our project. We anticipate continuing to execute on our planned roadmap to create more features and events that allow our community of players to grow and develop in an entrepreneurial way. Our Metaverse is a world of existence economy; it is Trilium (TLM) and anything our NFTs touch, so the possibilities are endless for how our Metaverse will grow and how individuals will create and share. DAO, NFT+ games, using NFT to benefit the community. We expect this to all take hold in 2022.

Tehn: Blockchain Cuties Community Manager

As a long-running project, 2021 is a big year for NFTs, which means it's been a crazy ride for us too, which is very close to the crazy hype of ICOs in 2017. It’s been a year of growth, whether it’s a fresh start for the wildly hyped NFTs, the visualized metaverse, or many new entrants into the space! Personally, we improve in-game transaction volume through transactions, new game mechanics, and many other key aspects of the game. We've had a pretty tough year as a team. We did a reorganization, although it took a little longer than expected. But it's also been a very productive year for us. Now, the team is more responsive, agile, and full of energy and energy. Our team has been working on developing more technical programs to speed up the game update time and the development time of new features.

In 2021, the NFT field has gone through a hyper-consolidation phase, and because of this, the blockchain field has seen rapid growth. Now the blockchain industry is one step closer to the mainstream. Because of these more attentions, its growth rate becomes faster, and it will become less incomprehensible to the average user. Many aspects of the blockchain trend, such as GameFi, Metaverse, decentralized finance, user identity, etc., will grow steadily for the foreseeable future. Along with the hype, a number of new projects have been added, but only time will tell who stays here in the years to come.

As a project, we are working on a unique token economy initiative based on the token we launched this year. We are constantly expanding the number of blockchains supported by the game. The team is constantly working on the in-game economy to provide the best value for players. In early 2022, we plan to enter War of Cutieland closed beta. We will allow users to move their assets and even transfer between different blockchains through bridges. Of course, these will also be L1 solutions and multi-blockchain L2 solutions. It's both good and bad for GameFi that a lot of the big players are now focusing on the space. Large and experienced game development companies cover a lot of the groundwork, like production process and strategy. In this nascent and growing industry, such new players will help provide users with better quality products.