Blockchain Market Overview 

Jul 19, 2021

The blockchain market is becoming ever more crowded and complex, with many platforms offering variations of the same and many others offering something different. Hence, it is difficult to distinguish which chain is the dominant or the growing chain and what the sector will look like in terms of market share over the next few years.

Below is a summary of the current blockchain landscape and future projections.

Overview of the blockchain market

Overview of the blockchain market

Blockchains grow almost at the speed of cryptocurrencies. There are currently blockchains for decentralized finance (DeFi), decentralized exchanges, smart contracts, non-fungible tokens (NFTs), video content, for cloud computing, the game market and who knows what else.

The blockchain market / sector is largely defined by Ethereum-style (ETH) platforms that support smart contracts and dapps.

“According to our observations, the current chains show similar patterns; However, we can still expect a lot of diversity in terms of nature. While most aim to solve the ETH scalability problem, some focus on interoperability and security, ”said Lennix Lai, financial markets director at OKEx.

Other industry watchers agree that most chains are vying with Ethereum for the shared smart contract / Dapp space, which is arguably the heart of the non-money-centric crypto ecosystem.

“Smart contracts and dapps are core features of several notable blockchains, and while there is certainly some overlap, we don’t,” said Simon Peters, eToro’s crypto market analyst.

Unsurprisingly, Ethereum is the dominant platform when it comes to this core area of ​​the blockchain market. According to the data compiled by DeBank, it accounts for about 73% of the total value blocked across all DeFi platforms, with Binance Smart Chain (its closest competitor) now accounting for 17%.

“Ethereum is currently the main platform for Dapps, Smart Contracts and NFTs. Over time, it hopes to use planned upgrades (like ETH 2.0) to address the scalability issues and high transaction fees that are currently incurred, ”said Peters.

Despite Ethereum’s dominance in the core blockchain market, Peters doubts that other competitors could begin to capture its market share.

“However, Cardano (ADA) and Tezos (XTZ) – both platforms for creating tokens, smart contracts and dapps – could also compete with Ethereum for market share in the future,” he added. (However, Cardano does not yet support smart contracts.)

In addition to Cardano, Tezos and Binance Smart Chain, EOS, Tron (TRX), Solana (SOL), Algorand (ALGO), NEO and Avalanche (AVAX) are other smart co-platforms / dapps of the Ethereum rivals.

And in addition to the platform that is supposed to be a blockchain dapp / smart coin, we are now also certifying a larger number of chain additions / backends in order to equip the larger ecosystem with functions, capabilities and additional capabilities.

“Among the more unique scaling features, we have examples like Chainlink (LINK), the main decentralized oracle network to provide execution world data for smart contracts and blockchains, shall we say in general. And Polkadot (DOT) provides interoperable blockchain aggregators so that independent blockchains can trustfully exchange information and transactions, ”said Peters.

Off-chain operations as companions to the “core” chain include Polygon (MATIC) (a Layer 2 scaling solution for Ethereum), Cosmos (ATOM) (a platform for linking other blockchains), and Kusama (KSM) (an experimental blockchain for polka dots).

Then there are projects with specific, sometimes collaborative applications such as Iota (MIOTA) (no blockchain), Filecoin (FIL), Theta Network (THETA) and VeChain (VET). This underscores the fact that even if part of the blockchain eventually becomes a Dapp system value / smart contract platform, there will always be a peripheral ecosystem of other chains providing use cases for the target object.

Overview of the blockchain marketCapital and revenue

The interesting thing about the blockchain market is that it is increasingly being run like a traditional industry. This means that a growing number of them are privately ventured with the expectation of some sort of bankable return.

“Venture capital remains an important source of funding for blockchain platforms. It helps platforms or projects grow quickly; However, this is not a guaranteed success, ”said Lennix Lai.

He added that OKEx has advised many new blockchain projects, although planning for a significant part of them is usually in the “very early stages”.

“It’s very dangerous because money comes on ropes; Every decision should be strategic, otherwise scaling too fast can lead to failure, ”he said.

These days, funding is often hybrid, with some variations of token sales complementing traditional VC funding, said Wilson Withiam, senior research analyst at Messari.

“Almost every new Class 1 project has already brought up a private VC round. Some (not all) also held a public token sale at launch or in advance of the mainnet launch to raise more capital and improve initial token distribution. “He told

Withiam also noted that most blockchain projects these days are starting a platform that oversees the distribution of funds raised to support development initiatives.

“These platforms also often receive token grants that they regularly sell in private sales to fund long-term development and rollout initiatives. Examples are the Celo Foundation, Solana Foundation, and Ava Labs, ”he said.

In terms of revenue, there is little data on whether venture-funded blockchain projects are earning what could be described as “profitable”. Meanwhile, the picture is further complicated by the fact that some blockchain networks are more decentralized (e.g.

This could undermine efforts by new and existing projects to attract significant venture capital. However, since successful blockchains are likely to see significant appreciation in their native tokens, this could be enough to offset the fact that blockchains don’t have a traditional source of income. .

Overview of the Blockchain Market in the Future

The blockchain market may take some time to consolidate the way the dotcom bubble consolidated into several major conglomerates after 2001.

“In the short to medium term we will see an explosion of application chains and specific application chains on new platforms,” ​​said Withiam.

While he admits that most new platforms are not fully featured and not yet mature enough to be launched at the Ethereum level, he also believes that too many upgrades and catalysts are on the horizon to allow believe that they will not develop in the future.

“Cosmos and Polkadot have the two largest developer communities outside of Ethereum, and each has upcoming network defining upgrades that will encourage developers and users to explore opportunities within the ecosystem. Solana has a growing app ecosystem that may be lacking in tools but that may have enough momentum to overcome short-term hurdles, “he said, noting that Terra (LUNA) and THORChain (RUNE) were proving to be a chain-specific application have that create and add significant added value.

However, industry observers suspect that soon

Be the first to know about Crypto news everyday

Get crypto analysis, news and updates right to your inbox! Sign up here so you don't miss a single newsletter.

© 2021 COINCU Financial Group Inc. Address: Road Town, Tortola, British Virgin Islands (BVI).

Email us: [email protected]