dApp.com - building a dApp guide for the world
With Kyle Lu, CEO & Founder, dapp.com
In this episode of the DeFi Download, Piers Ridyard discusses with Kyle Lu, CEO and founder of dApp.com, a cross-chain platform, where you can discover, analyse and use dApps built on blockchains such as Ethereum, EOS, TRON, WAX, and others.
DApp.com is a leading data-driven marketplace for blockchain applications and services, which provides a suite of metrics, market reports and data insights into over 4000 apps from over 16 different smart-contract platforms.
DApp.com is at the forefront of an emerging market for blockchain applications.
[00:00:58] The origins of dApp.com
[00:02:24] What Kyle considers to be the most significant milestones of the dApp market
[00:06:20] Differences between decentralised applications launched in 2017-2018 and those launched more recently
[00:09:31] Kyle’s thoughts on how ledgers are currently used. Is he noticing a substantial increase in applications other than DeFi being developed on Ethereum, as well as any significant DeFi usage on other platforms that is worth discussing?
[00:13:53] Is Kyle noticing other applications, besides DeFi, being created that may be overshadowed by DeFi’s popularity?
[00:16:00] What piques Kyle's interest in the DeFi space currently, and what are his predictions regarding its evolution?
[00:19:35] The structural problems of DeFi and the Radix approach to resolving them
[00:29:12] How to get more information about dApp.com, what you can do with it, and how to learn more if you are interested in diving into the wonderful world of decentralised applications?
SUMMARY KEYWORDS: DeFi, Ethereum, blockchain, applications, Radix, decentralised, EOS, ledger, token, Tether
SPEAKERS: Kyle, Piers
Hello, and welcome. I am Piers Ridyard, CEO of the decentralised finance protocol Radix, a public ledger entirely focused on bringing DeFi into the mainstream. This is our podcast, the DeFi Download, a show about decentralised finance and all things crypto, where we dive into the details of the projects, assets and services that are powering the DeFi revolution. Today, I'm joined by Kyle Lu, founder and CEO of dApp.com. DApp.com is a leading data-driven marketplace for blockchain apps and services, offering a suite of metrics, market reports and data insights into over 4000 apps from over 16 different smart contract platforms. DApp.com is on the bleeding edge of an emerging market for blockchain applications. Kyle, thank you so much for coming on the show.
Thank you, Piers. I'm glad to be here today.
So how did you come to start dApp.com? When did your journey start?
We started dApp.com in 2018 in around May. I believe that was at the beginning of the whole dApp-market's booming. The reason why we started it was very simple because if you remember back in 2017, there were a lot of public blockchain platforms, and then a lot of ICO projects that were launched and then most of them were happening on Ethereum. So, the idea is, the market cares a lot about the token, making profits from investment of tokens. But we also want to get more exposure of projects that were being built on different blockchain, not just Ethereum, not just ICO, but a lot of working products that were built fully decentralised. That's the reason why dApp.com was released. We started as an app store of dApps. Then we started adding a lot of functions, especially on the tracking, so you'll be able to see how many users, how many transactions, how much money that was traded in different dApps, like games, online betting platforms, decentralised exchanges, and of course, DeFi.
So, what have you seen since you guys founded the company and started to track the market to now? What have been the major milestones that we crossed that you think are exciting to talk about?
[Chuckles] Yes, these are interesting questions because we've been observing what's going on with the decentralised market, decentralised apps, and then we happen to witness a lot of different waves. There was a conversation between me and one of the VCs that were heavily invested in DeFi and then we talk about this and it actually reminds me of early— The current DeFi bull run, the launch of a lot of meme coins and all that, remind me of the beginning of 2018, right before we launch. Here is the wave. Let me explain more. So, in late 2017, the dApp market was pretty much formed by the early stage of NFT led by CryptoKitties, CryptoPunks, CryptoCountries and all these “hot potato” games. People start investing and then oh, suddenly because Ethereum's price goes up and the market gets hot a lot of people are buying at a fervour, ridiculous price for all these assets that were printed out of nowhere. Then it comes to early 2018, when there was already a working product of some decentralised exchanges, such as EtherDelta. I remember Kyber was almost launched at that time already. And then people started exploring decentralised exchanges and a lot of idle games were launched [chuckles]. Idle games are pretty much like farming games. There's a shrimp farm, crocodile farms, ant farms, and everything. That's exactly two years later, and now we have DeFi coin farming [laughs] and it shares a lot of similarity because at the time there were clone projects launching every day. Now we have Porkchop, we have Sushi, we have all different kinds of foods and all that. There are some different but at that time, a lot of these were coming up. Then it comes to June. What happens in June, it's EOS and TRON have launched their mainnet. So, when EOS was launched, especially in the Asia market, a lot of developers were building really hard into bad teams and also some Ponzi kind of project, encouraged because the transaction fee is very low and the speed is higher. This allowed transaction mining, when online casinos encourage users to play their games and then earn their tokens. It was really crazy in the markets until— Then Fomo3D was launched to get into the next level. This is pretty much of 2018 and 2019 and as a result, a lot of games, NFTs and everything were popping up a bit. It's more quiet compared to 2018. DApps also gained a pretty good growth in a lot of ways until the end of 2019, then DeFi started picking up and this year, starting in June, Compound introduced the COMP tokens. They were like a liquidity provider. It started getting good growth by offering good interests.
What do you think is the difference between— you're talking about similarities between 2018 and now. It's interesting, I always talk about this being like 2017, because for me, 2018, the market was already cooling. It was that run-up to Christmas that 2017 saw the biggest part of the bull run. That's where the peak of— I think it was just over Christmas— so just before Christmas that Ethereum peaked at $1,200 an ETH. I feel like we're earlier than 2018. But it's interesting if the data from dApp usage looks more like 2018-2019. That's really interesting. So, what do you see is the difference between the kinds of applications that were being launched in 2017 and 2018 versus the kinds of applications that are being built now? Do you think that the applications that are being built now have more validity or are more real than the ones that were being built in 2017 or 2018? Or do you still think that they are still much the same market dynamics at play?
I think they share a lot of similarities. I would say, just now we compare 2017 to current. I mean, for me, yes. Because the token level is on the crypto trading market level. But on the project level, it shares similarity with 2018. Because in 2018, that was when a lot of people started to realise, oh, there were a lot of ways to build a dApp and there was a lot of interest, a lot of attention from the market, if I built a dApp and then people started building something that other people had never seen. That led to a new innovation. At that time, in 2018, having an idle game that had yield farming in a dApp was new. That's why at the time, we saw those kinds of products launching every day. We received like 10 to 20, up to 30 applications per day. A lot of products had a lot of similarities. Now we also see DeFi concept projects. Maybe they're not real DeFi, or it might be a clone or maybe a copycat from other projects, but they were launching every day. That's the similarity with 2018. But if we look at that, it takes more effort to build DeFi projects nowadays compared to 2018. Because at the time, as long as you printed something people went in, but right now, we’ve already seen so many security issues of smart contracts, and the public is more aggregated than before. People look at it in a more serious way. It’s not just having fun, but it's taking it more seriously, asset management level. So, a project tends to be more legit, even though it might be a copy from somewhere, the level is different from 2018.
What are you seeing in terms of the ways in which the ledgers are being used? You say that you track 16 different smart contracts platforms, so everyone talks about DeFi on Ethereum. Are you seeing a big growth in things other than DeFi being built on Ethereum right now and are you seeing DeFi, any kind of DeFi use on other platforms that is significant, so worth talking about?
Yes, definitely. So, of course, Ethereum is the one who leads everything because the ground is there. Basically, if we look at these two years, three years since ICO, all the innovation actually comes from Ethereum, and then the others follow, there is not much argument about that. Recently, we also looked at a lot of what's happening outside of Ethereum. The most comparable was EOS and sometimes there was TRON coming into the discussion as well. One thing that’s interesting about EOS is that the way of doing a transaction is way better than Ethereum. Right now, the gas fee is so high already it's hard for a regular user to try out DeFi products and all that. But on EOS, it’s a different story. Because the transition was so smooth, the difficulty would happen on having an EOS account. So, there are a few interesting stats that I want to point out. One is EOS is one of the top blockchains in terms of the funds that they raised, the influences that they have. But if you look at Tether, USDt, it has less than 1 billion USDt that were released on EOS. They only have a few, less than 20 million. Since recently, there were some DeFi projects on EOS, there were some called Defibox, DeFis Network, those products were launched, and actually forced Tether to print more USDt on EOS because there was not enough Tether there because people were staking the token. This is one interesting thing to look at.
What are they staking it for? What's the application on EOS that people are wanting to use USDt for?
I think it’s similar to Compound or yield farming because there are some products that allow token swap. A lot of these tokens were staked into the liquidity pool to earn interest because they are a trading pair. Then there was also a lending platform, where people would offer to stake their USDt for other people to lend out.
Do you know what the application is called?
There were a few. Let me pull it up really quickly. So, they were the DeFis Network, and Vigor, and Pizza, and EOSDT as well. These are some interesting, rather new application platforms.
Yes, I think EOS is a really interesting case, for lots of reasons. I mean, it raised so much money and has managed to get so little traction for [unintelligible]. In addition, I'd be really curious as to how many of these applications that are being built on EOS are directly funded or assisted by the EOS Foundation. I know of EOSDT. I haven't heard of the others. So, you're saying that now Tether is starting to get more adoption on top of the EOS platform?
Yes, I think yesterday, it was [unintelligible] 10 million on the EOS platform. I mean, compared to the one that they had on TRON and Ethereum, it is a small amount, right? But among the EOS community, people see it as Block.one is not doing any [chuckles] stuff to push it through. Then the community actually built a lot of products to get more attention from Tether [chuckles] for EOS. And all these projects that I mentioned were built by the community. I don't think they were— I mean, they might have received some grants from the EOS US VC, but most of them, I think, are community-based projects.
Okay, that's good. That's good. And outside of things like DeFi, what other applications are you seeing the growth of? Is it mainly DeFi or are there other things as well that we're not hearing about because there's just too much noise around the DeFi space?
Yes, I'll say there is just too much noise around DeFi right now. It just took everything away from the other projects. If you look at - because we release quarterly reports about what's going on with the dApp market, and definitely DeFi is part of the dApp market – so, if you look at Q2, Ethereum as an example, you see all this daily volume that were— We can use a trail or daily warning that will run through all the dApps, you see 95% or even more, were for DeFi. It's either finance or decentralised exchanges. So, it’s just taking it everywhere. But then we're also looking at NFTs because there are a lot of people super active on NFTs, there are a lot of artists that start bringing their products, their pieces of art into the Ethereum networks. There is also an interesting project called NFTfi with which you could state your NFT to get a loan. That has had a lot of traction recently as well because two months ago it launched, there were a lot of people who staked, overall, their NFT but they were not receiving any offers. Then I tried to list some of the NFTs there as well. Then recently, I think last week, I received four or five different offers from people that are willing to lend me their Ether or Dai and then to get my NFT. So, I think DeFi also brought traction into other territories that might have a relationship with them.
What excites you at the moment about the space? Where do you think we're going next?
I think for us because we are a platform, so if you see us as the Apple App Store, the Apple App Store became so big because there are a lot of developers that are building on iOS, the system. So, for us, what we're excited about would be if more and more people started building on the blockchain. I think one good thing about the current bull run of DeFi is it brings in a lot of attraction from external developers. The difference between now and 2017 is you have to be an actual project now to make tractions. But back in 2017, you needed to get a very nice-looking white paper to do it. So, the people that we attract now are different. 2017 attracted a lot of business people. Now it sure attracts a lot of developers, a lot of people who are eager to do some innovation here on the blockchain.
That's a really interesting observation. I think it's true as well. To participate in the DeFi market today, you have to be technical. It's no longer just a, “oh, you just need a token contract and that's it”. You have to build even something like— oh well, something like Compound or Aave is immensely complicated. It requires a real development team; it requires real work. Even something like YAM is far beyond the ability of most casual people in the space. That goes to the users as well as the developers. Then stuff like Uniswap, a very, very simple idea in principle, but actually, to get it right, you know, Uniswap V2 is sizably more complicated than Uniswap V1 because of all the extra stuff you need to build around it to make it work like a more efficient market. So yes, that's a really interesting observation. And I think, for me, that's one of the reasons that I feel that this generation of applications and innovation is far more sustainable and interesting, than what happened in 2017 and 2018 because it is actually pushing forward the space. We're building things like flash loans. We're building things like yield farming. All of this stuff does have some negative components to it, like flash loans, in terms of how it allows you to move money incredibly quickly without actually putting any collateral up in the first place, or like yield farming, where it encourages people to substantially leverage up risk in the system. But at the same time, these things are allowing two really important components as well. The first is getting rid of block time. Flash loans are fundamentally getting rid of block time and being able to execute a trade or transaction, which is incredibly exciting. Yield farming increases liquidity on ledger by allowing people to move between applications and products to increase the depth of the market, which means it makes it better for buyers and sellers and creates a better market price for them. We've obviously still got lots of problems, like scalability and security, which is stuff that we built Radix to address for the DeFi marketplace, but fundamentally, I think you're right. This is a developer-led wave, unlike the previous wave.
Yes. Speaking of Radix, I've been following you guys and you have recently made a lot of partnerships and all this stuff. How do you position Radix, Piers? I mean, we allow different blockchains, right? They specialize in different— like, for example, there were blockchains that were leading the whole local markets because they had a lot of resources and then they were the early adopter in that market, so that they had the potential to grow really big into a local market. And then there were some that had a strong community or maybe they were backed by super huge VCs and all that. Then, say, for example, WAX, has a lot of resources in the games industry so that they could specialise in games and NFT. What about Radix? What was the plan?
Sure. So, the problem that DeFi is facing right now are structural problems that have to do with how the technology is built, and with how applications are supposed to be built on top of them. So, there's this really important concept in DeFi, which is atomic composability. That's the thing that makes things like flash loans possible, but it's basically that I can call two applications at the same time, and have both of them execute or neither execute. This is fundamentally what's driving the liquidity and the adoption and the attraction of DeFi on Ethereum. The problem is that it's also what's causing all of the congestion. So Ethereum is groaning under this weight of congestion, and then all of these solutions to solve that, Polkadot, Cosmos, NEAR, Ethereum 2.0, Avalanche, all of these solutions fundamentally break this concept of atomic composability. This inter-application communication breaks down and becomes much slower, much more difficult as soon as you start sharding the blockchain in the way that all of these projects are. And the reason that these projects are coming out now is they're addressing a problem they saw in 2017, which was the CryptoKitties problem. But that was a user-to-application problem, not an application-to-application problem. The thing that Radix has been doing for years is building scalable technology, but not trying to build it from the point of view of a blockchain, just trying to build it from the point of view of how do you build a trustless decentralised ledger that can scale to everyone in the world, but can still do it in a way that actually makes sense for the products that are being built on top of these ledgers. What most people are taking the view of is, “Oh, this technology has a general purpose. So, we should make it equally suitable for Twitter and IoT, as it is for decentralised finance.” Our view is basically that well, that's not true, because decentralised finance is actually a really specialist area that you need, you want people to build financial applications in a fundamentally different way to the way that they build social media applications. You also need the technology to work in a different way because you care about things like safety and lightness, and you care about things like finality, and you care about things like applications fundamentally being able to be composed together. So, all these are all of the things that Radix solved over the course of a long period of research and development. We've collaborated with people like the University of California, Davis, to validate all of our consensus and all the ways in which we approached. That ultimately lends us towards creating an application specific platform, a platform that is suitable for decentralised finance that doesn't break decentralised finance in the same way that Polkadot and EOS and Ethereum 2.0 and Algorand, and all these platforms are going to break DeFi with their scalability solutions, and then, also crucially, and you've touched on this, this problem of hacking, and often, you can get a decentralised finance application that gets picked up very, very quickly. A great example of this is YAM's, where $500 million flowed into it one day after launching and then two days after launching, there was an error, which meant that the value of YAM dropped off a cliff. And that's fundamentally to do with, again, the way in which smart contracts are built, like Ethereum and Solidity because Ethereum was the first programmable ledger, Solidity came along, and everyone adopted the Solidity standard. The problem with Solidity is that it's really difficult to build secure applications with. If you're building stuff like gaming, that's okay. Like NFTs, if you have an error, it's not fatal. But for things like money, it can be millions and millions and millions and millions of dollars, and soon to be billions of dollars that are at risk for things like software errors and software bugs. So, when we built Radix, we decided that we were going to build a fundamentally safer environment for building decentralised finance. And that's where the Radix engine comes in as this programmable finite state machine, rather than a Turing complete VM that allows you to much more securely specify what you want the application to do, whilst also ensuring that you have a much lower potential of having hacks or errors. Then the last part that’s really important about your community is we spent a long time looking at: How does a community build up around a public decentralised ledger? What lessons can we learn from things like Ethereum, what lessons can we learn from things like EOS and Hashgraph as well and people like this? How can we make sure that you are incentivising the right kind of building in your community that is additive, that's there to help support the community, rather than this mercenary "I am here because I'm getting paid, and if the money dries up, I'm not going to be building here anymore, and I'm going to be building this really specific thing, it doesn't help anyone else, it just helps me, and if I make some money from it, great, and then once that money is no longer there, I'm just going to leave," which is largely what's happened in things like EOS? But look at Ethereum, what happened. A lot of tooling was developed early by developers who were super passionate about what Ethereum was doing, and created things like the ERC-20 standard and ERC-71 standard and things like the EIP 1559, as it's currently being proposed, that creates burden for Ethereum. All of these things are coming from the community and they're coming as open-source code that's being proposed and then adopted. We think that's a beautiful way of doing things. But because a public ledger is essentially a ledger of value, there's no reason that you can't actually give incentives directly to developers who create useful things for the community that pays people back as its use. The last key part of the Radix ecosystem was this developer royalty system, which allows developers, if they've created a really useful component, to add it to the on-ledger component library in Radix, which is, say you've created a continuous function market maker function, or a shares and pools-and-shares function, or a library that allows you to pull data from an oracle and do something with it. All of those components can be developed by individual developers, so they don't have to take on the risks of building an entire DeFi project, they can just build a useful component of it. That gets pushed into the right component library and then because of how you build in Radix, you compose things together, you bring these components together a little bit like an on-ledger git repository. These are able to call some different components to string together your application. Then, if that application is successful, those developers also receive a royalty payment from the use of that on-ledger application. Then what that does is it incentivises a community to help each other. The more that the individual developers are able to develop useful tools for being able to create great decentralised finance applications, the more that application developers are going to want to come across and build decentralised finance applications on top of Radix, which will in turn, help attract users, which will in turn pay both the projects and the community of developers who are trying to build these useful components on top of Radix. So that, fundamentally, is how we're attacking this. First, from the point of view of scalability and making scalability work for DeFi. Second, from the point of view of security, and making it fundamentally more secure to build DeFi and thirdly, from the point of view of incentivising the community in the right way, they are self-incentivised and self-supporting of the kind of applications that you want built on top of these public ledgers.
Got it. Got it. I think, yes. I think the third part is really important, especially when we see a lot of layer 1 chains that had given a lot of incentives out to the community, and then they ended up losing the community because of the way that they do incentives.
Nothing keeps them, right?
Yes, yes. So yes, I think, since you have figured it out very well, this will be a favourite great strength of Radix, once you have launched your mainnet and then start getting a lot of dApps, a lot of DeFi products that will be building on top of the blockchain.
Thank you. That's what we hope anyway. If people want to find out more about dApp.com, or what kinds of things can people do with dApp.com, and how should they learn more if they want to start diving into the wonderful world of decentralised applications?
So right now, they can join, go and visit dApp.com anytime and then they will be able to find what's the latest product that we've launched or how people are using it. A lot of comments, a lot of discussion around the community are making every day and towards Q4 I think we'll be having, super excited, a product that will be released. We are actually transforming dApp.com for a marketplace to a product distribution network for blockchain apps. So, meaning to say in the future, in the coming months, people will be able to be a distributor of dApps in whatever format they want to be. The idea is to get everyone, like what you mentioned as well, get the community involved with pushing more usage of blockchain apps and services. So, this will happen in upcoming months. And, of course, because we were the largest dApp marketplace as well we have established a lot of partnerships with different leading wallets, for example, the Opera browser, as well. So, use it like— who uses Opera, I know, Opera is very big in Europe as well. So, when people wherever they use Opera browser, they can activate their crypto wallets within the browser and then they could explore a dApp marketplace that is powered by dApp.com as well.
Oh, that's really cool. That's really awesome. So, when does that go live?
The Opera is live already. Yes, we're already serving over 200,000 users every month on Opera. I believe that the number will be increasing as well. The distribution network will launch in Q4 and then people, the community, could start making money from being a distributor of blockchain apps.
That's really cool. So, if they want to jump into the dApp community, they just need to go to dApp.com. Do you guys have a community on Telegram or WeChat, or Twitter? Where else do you hang out?
We hang out on Twitter; we hang out on Telegram. We have a super active Telegram community for around 30K or 40k members there. So yes, the name is easy to find [laughter]. DApp.com and then, last thing is, if you want to know more about dApps and DeFi, what's going on in the market, you have to visit dApp.com.
Awesome. Well Kyle, thank you so much for coming on. It's been such a pleasure talking with you. Hope to catch you soon.
Thank you. Thank you, Piers.