Wasn’t it just last December when people were buying digital cats for over $100,000? That time feels like eons ago today as CryptoKitties, a collectibles site that was supposed to be the vanguard of a new type of app, watches its user base shrivel to almost nothing.
According to research site Diar, the number of daily visitors to CryptoKitties in August was 510, which is a 96% drop from its peak a few months ago.
CryptoKitties, which is backed by the prominent Silicon Valley venture capital firm Andreessen Horowitz, attracted widespread media buzz in December when collectors bought unique digital cats on the platform for up to $140,000. Today, it’s unlikely anyone would pay a fraction of that.
CryptoKitties are the most prominent example of decentralized app, commonly known as “DApps,” a term that describes games and other applications hosted on a blockchain network across multiple computers rather on a central server.
Diar’s findings are even more grim when it comes to other prominent decentralized apps.
One example is Augur, a new type of prediction service that lets people wager on future events. After raising $5 million in 2015, Augur finally launched in July—but now counts fewer than 50 users, according to Diar.
Meanwhile, a decentralized banking app known as Bancor, which raised an eye-popping $153 million last year, now reportedly counts only 457 daily users—meaning its investors, which include Blockchain Capital, paid around $335,000 for every active user.
DApp projects like Bancor were able to quickly raise large sums of money in part because they pre-sold digital tokens on the Internet. The purpose of such tokens is nominally to access the application, but most got snapped up in advance by speculators who bought them in the hope their value would soar once people began using the DApp.
Now that a growing number of DApps have gone live, it’s apparent there’s an enormous gulf between speculative and real world interest in these projects.
In response to the minuscule adoption rates, the co-founder of Augur, Joey Krug, has been sanguine, telling Diar that the costs and difficulty of using the service mean it has a hard sell for ordinary people.
“I always used to say that when Augur launched it’d be expensive, slow, and difficult to use but hopefully it works at a core level. It does work at a fundamental level now,” Krug said.
Krug’s comments underscore how distributed applications remain a novel technology that is impressive in theory but hard to put into practice. This is likely to change as companies shift from proof-of-concept projects into building interfaces that make DApps accessible to ordinary consumers.