Klaytn (KLAY) got off to a promising start in March 2021, reaching an impressive $11 billion market cap upon its debut. However, investors have exaggerated their expectations, as the current total value of the token is USD 3,000 million, which represents a decrease of approximately 70%.
Although not as well known as the major smart contract blockchain networks, Klaytn remains one of the top 35 tokens by market cap. Additionally, the network has $1.2 billion worth of deposits locked in smart contracts. The capital locked in smart contracts is known in the industry as total value locked, or TVL.
Real use cases and solid support
Klaytn is a flexible modular network architecture created by Kakao, a publicly traded internet giant. The Asian tech group’s shares are valued at $36 billion, backed by various applications in traditional markets, such as gaming, chat, taxi and travel, financial services and a venture capital arm.
Companies can customize and operate their own service-oriented blockchain networks, built on the Klaytn architecture. These autonomously operated subnets are called Service Chains and are fully customizable.
The network is fully operational and offers decentralized applications (dApps) ranging from DEXs, non-fungible token (NFT) markets, social media, collateralized loans, and gaming. For example, Klaytn’s main dApp, KlaySwap, has $746 million in TVL and 19,840 active addresses in the last week.
According to Klaytn’s blog, the network is preparing its infrastructure to offer services to the video game and metaverse sectors. Initiatives include the release of an open source developer toolkit that incorporates layer 2 solutions and adds direct support for Ethereum Virtual Machine (EVM) applications. Other additional services include the provision of financial and management support to projects with great potential.
Klaytn’s roadmap includes increased scalability by leveraging layer 2 service chains, additional bridges of interoperability with other blockchains, and the integration of an Interplanetary File System (IPFS) gateway for decentralized storage.
Deposits in Klaytn smart contracts skyrocketed 24%
Despite KLAY’s negative 15% price return in the last 30 days, the network’s TVL increased by 24% in the same period. For comparison, Arbitrum’s scaling solution stalled at $1.7 billion, and Polygon dropped to $3.35 billion from $4.65 billion on February 15.
In dollar terms, Klaytn’s current TVL of $1.2 billion is 13% below its January 2022 peak of $1.35 billion. However, these figures represent less than 2% of the aggregate TVL (excluding Ethereum), according to data from DeFi Llama.
As for the latest events, On February 17, Klaytn joined the Blockchain Game Alliance, which encourages the development of standards and the exchange of best practices in the decentralized gaming sector. The initiative also aims to increase public understanding and awareness of blockchain gaming.
To confirm whether Klaytn’s TVL growth is supported by increased adoption, DApp usage metrics would need to be analyzed. Some DApps, such as games and collectibles, do not require large deposits, so the TVL metric is irrelevant in those cases.
As DappRadar shows, On March 15, the number of Klaytn network addresses that interact with decentralized applications decreased by 5% from the previous month.
Although 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, submitted a decent 39,090 active addresses in the last 30 days.
The above data suggests that Klaytn has found a niche within the decentralized application segment. If the features proposed by the project come to fruition, the KLAY token price will probably hold the $1.05 level as medium-term support and post a decent rally.
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