Klaytn (KLAY) had a promising start in March 2021, reaching an impressive market cap of $11 billion after its debut. However, investors have exaggerated their expectations as the current total value of the token is $3 billion, down about 70%.
KLAY/USD on Binance. Source: TradingView
While not as well known as the leading smart contract blockchains, Klaytn remains a top-35 token by capitalization. In addition, the network holds $1.2 billion in deposits on smart contracts. Capital locked on smart contracts is known in the industry as total value locked or TVL.
Real use cases and strong support
Klaytn is a flexible modular network architecture created by Kakao, a publicly traded South Korean internet giant. Shares of the Asian technology group are valued at $36 billion, supported by a variety of applications in traditional markets, including games, chat, taxis and rides, financial services and a venture arm.
Companies can customize and use their own service-oriented blockchains built on top of the Klaytn architecture. These autonomously operating sub-networks are called Service Chains and are fully customizable.
The network is fully functional and offers decentralized applications (dApp) ranging from DEX exchanges, non-fungible token (NFT) marketplaces, social networks, collateralized loans and games. For example, KlaySwap, Klaytn’s leading dApp, last week owned $746 million worth of TVL and 19,840 active addresses.
According to Klaytn’s blog, the network is prepare its infrastructure to provide services to the gaming and metaverse sectors. Initiatives include the launch of an open-source tool developer package that includes layer 2 solutions and direct support for Ethereum Virtual Machine (EVM) applications. Additional services include providing management and financial support for high potential projects.
Klaytn’s roadmap includes increased scalability by leveraging layer 2 service chains, additional interoperability bridges with other blockchains, and the integration of an Interplanetary File System (IPFS) gateway for decentralized storage.
Klaytn smart contracts deposits up 24%
Despite KLAY’s negative performance of 15% over the past 30 days, the network’s TVL increased 24% over the same period. In comparison, Arbitrum’s scaling solution was stuck at $1.7 billion and Polygon fell from $4.65 billion on Feb. 15 to $3.35 billion.
Klaytn Total value locked, USD. Source: DefiLlama
In dollar terms, Klaytn’s current TVL of $1.2 billion is 13% lower than its peak of $1.35 billion in January 2022. Yet these figures represent less than 2% of total TVL (excluding Ethereum), according to to DeFi Llama data.
In terms of recent developments, on February 17, Klaytn joined the Blockchain Game Alliance, which encourages the development of standards and the sharing of best practices in the decentralizing gaming sector. The initiative also aims to increase public understanding and awareness of blockchain games.
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To confirm whether Klaytn’s TVL growth is supported by greater adoption, one needs to analyze DApp usage stats. Some DApps, such as games and collectibles, do not require large deposits, so the TVL stat is irrelevant in those cases.
Klaytn DApps 30-day usage statistics. Source: DappRadar
As shown by DappRadar, on March 15, the number of Klaytn network addresses interacting with decentralized applications decreased by 5% from the previous month.
While Klaytn’s TVL is up 24%, the network lacks more substantial user base growth to support further KLAY token price momentum. Still, KLAYswap, the leading Dapp, presented a decent 39,090 active addresses in the past 30 days.
The above data suggests that Klaytn has found a niche within the decentralized application segment. If the project’s proposed features come to fruition, KLAY’s token price is likely to hold $1.05 as a medium-term support and provide quite a bit of benefit.
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