DappRadar suddenly shuts down! The 7-year-old Web3 analysis platform faces financial pressures.

DappRadar, a strong force in the Web3 analytics and discovery space since 2018, will cease operations. The company stated that despite exploring alternatives, the platform has become financially unsustainable. Launched in 2018, DappRadar covered over 90 blockchains and provided near real-time metrics on DeFi, NFT, gaming, and Metaverse projects.

DappRadar founder announces closure due to financial pressure after 7 years

(Source: DappRadar)

DappRadar, a strong player in the Web3 analysis and discovery space since 2018, will cease operations. The company stated that despite exploring alternatives, the platform has become financially unsustainable. Market headwinds appear to have severely impacted the analytics company, squeezing revenue and costs, prompting DappRadar's founders to declare that shutting down the company, though difficult, is necessary.

On Monday, founders Skirmantas Januskas and Dunica Dragos stated in a message to users that they will begin gradually shutting down the website and related services in the coming days, including tracking for Blockchain and decentralized applications. They added that detailed information regarding the DAO and RADAR tokens will be announced through community channels, and relevant decisions are yet to be made, inviting the community to participate in this process.

DappRadar has grown together with the industry, accompanying millions of users through bull and bear cycles. The team states that their goal is to make this chaotic industry easier to understand and trust, and they are confident that they have made positive contributions to this field. This statement indicates that the closure of DappRadar is not due to product failure or loss of users, but rather that the business model is not sustainable in the current market environment.

The platform was launched in 2018 and is known as the world's Dapp Store, covering over 90 blockchains and providing near real-time metrics on users, transactions, and trading volumes for DeFi, NFT, gaming, and metaverse projects. DappRadar offers real-time data for DeFi, NFT, and gaming projects, becoming the industry standard reference tool. In addition to rankings and dashboards, DappRadar also provides portfolio tools for tokens and NFTs, discovery features such as missions and airdrops, and research content cited in multiple languages by developers, investors, and scholars.

The founder stated that over the past seven years, they have collaborated with hundreds of Blockchains and thousands of projects, and DappRadar's data has provided information for global newsrooms, research papers, and market analysis. This extensive influence means that the closure of DappRadar will have a significant impact on the entire Web3 industry. Many media outlets, research institutions, and investors rely on the data provided by DappRadar for decision-making, and the disappearance of this platform will leave a huge information vacuum.

7.33 million dollars in financing burned out, market cycle crushes business model

Funding has fueled the growth of DappRadar. DappRadar raised approximately $7.33 million in two rounds of financing, including a $5 million Series A round led by Prosus Ventures and Lightspeed Venture Partners in May 2021, with participation from Mastercard Lighthouse, BaltCap, Blockchain Ventures, JBIC IG Partners, and NordicNinja VC.

During the period of cryptocurrency popularity and speculative surges, these funds were used to expand data coverage and product functionality, attracting more users to use decentralized applications and enhancing the platform's ranking. The year 2021 was the peak of the cryptocurrency bull market, with the DeFi and NFT markets flourishing, leading to a peak in demand for data analysis tools. DappRadar completed its Series A funding round at this time, with both valuation and market position at their peak.

However, later on, the analysis business market environment related to economic cycles became more severe, with revenues being squeezed and costs continuously rising. The founder stated that closing the company was a difficult but necessary decision. The harsher market cycle made it more difficult to maintain the analysis models. When the cryptocurrency market entered a bear market, the trading volume of DeFi and NFT significantly shrank, and the demand for data analysis tools from users also declined.

The Three Fundamental Reasons for DappRadar's Closure

Weak revenue model: Over-reliance on advertising and subscription revenue leads to a plummet in income due to user loss during the bear market.

High Costs: Covering over 90 blockchains requires maintaining a massive data infrastructure, making it difficult to reduce technical costs.

Intensifying Competition: Free or low-cost alternatives such as DeFiLlama and Dune Analytics are emerging, squeezing market share.

DappRadar's business model mainly relies on advertising revenue, premium subscription services, and collaborations with blockchain projects. During bull markets, this model works well as a large number of users flock to the platform in search of the next hot project, and advertisers are willing to pay high advertising fees. However, during bear markets, user activity declines, advertisers cut budgets, and the technical costs of maintaining data from over 90 blockchains cannot be reduced in sync, leading to an imbalance in income and expenditure that ultimately crushes the company.

Moreover, the rise of competitors has further squeezed DappRadar's survival space. DeFiLlama offers completely free DeFi data analysis, while Dune Analytics has reduced data maintenance costs with a user-generated content (UGC) model. These emerging platforms adopt a more lightweight business model, demonstrating stronger survival capabilities in the bear market.

RADAR token's fate is uncertain, DAO handling has raised community concern

They added that detailed information regarding the DAO and RADAR tokens will be announced through community channels, and related decisions are yet to be made, inviting the community to participate in this process. This uncertainty has caused significant anxiety for RADAR token holders. RADAR is a governance token issued by DappRadar, allowing holders to participate in platform decision-making and receive profit sharing.

When DappRadar announced its closure, the price of RADAR tokens plummeted. Many investors questioned what value a governance token of a platform that is about to shut down still holds. The future of the DAO also became a focal point; if the platform shuts down, will the DAO continue to exist? How will the remaining assets be distributed? These questions await answers from the founders.

They thank the community, partners, and investors for their trust and patience, and urge others to continue building decentralized application discovery tools. With this closure, one of the most well-known data centers in Web3 has exited the stage, leaving a gap for competitors and newcomers to fill, as the industry seeks sustainable business models.

The closure of DappRadar has sounded the alarm for the entire Web3 industry. Even companies with strong brands, a large user base, and backing from top investors may not survive in a harsh market cycle. This serves as a reminder for other Web3 companies that they must establish more sustainable business models and cannot overly rely on speculative income during bull markets. The failure of DappRadar may prompt the industry to rethink the profit models of data analysis platforms and explore more diversified sources of income.

For media, research institutions, and investors that rely on DappRadar data, the closure of this platform will create a significant information gap. While alternatives such as DeFiLlama and Dune Analytics exist, they differ from DappRadar in terms of coverage and data granularity. In the short term, the market will need time to adapt to this change and seek new data sources.