Klaytn (KLAY) got off to a promising start in March 2021, reaching an impressive market cap of $11 billion upon its debut. However, investors have overstated their expectations, as the current total value of the token is $3 billion, a decline of about 70%.
Although not as well known as the top smart contract blockchains, Klaytn is still one of the top 35 tokens by cap rank. Additionally, the network has $1.2 billion in 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 strong support
Klaytn is a flexible modular network architecture created by Kakao, a publicly traded South Korean internet giant. Shares of the Asian tech group are valued at $36bn, backed by various applications in traditional markets including gaming, chat, taxi and travel, financial services and a venture arm.
Companies can customize and operate their own service-oriented blockchains built on the Klaytn architecture. These autonomously operated subnets 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) markets, social networks, collateralized loans, and gaming. For example, KlaySwap, the leading Klaytn dApp, 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 serve the gaming and metaverse sectors. Initiatives include the release of an open source tool development suite that incorporates layer 2 solutions and adds direct support for Ethereum Virtual Machine (EVM) applications. Additional services include the provision of financial and management support for projects with high potential.
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 storage. decentralized.
Klaytn smart contract deposits increased by 24%
Despite KLAY's negative 15% return over the past 30 days, the network's TVL increased 24% over the same period. For comparison, Arbitrum's scaling solution stalled at $1.7 billion and Polygon decreased to $3.35 billion from $4.65 billion on February 15.
In dollar terms, Klaytn's current TVL of $1.2B is 13% below its peak of $1.35B in January 2022. However, these numbers represent less than 2% of the aggregate TVL (excluding Ethereum). according to DeFi Llama data.
In terms of recent developments, on February 17, Klaytn United 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.
Related: Cointelegraph Research Report Analyzes GameFi Bumper for 2021 and Trends for 2022
To confirm if Klaytn's TVL growth is supported by higher adoption, DApp usage metrics should be analyzed. Some DApps, such as games and collectibles, do not require large deposits, so the TVL metric is irrelevant in those cases.
As shown by DappRadar, on March 15, the number of Klaytn network addresses interacting with decentralized applications decreased by 5% compared to 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, put up 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 proposed features of the project come to fruition, the KLAY token price is likely to hold at $1.05 for medium-term support and a decent upside.
The views and opinions expressed herein are solely those of the Author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should do your own research when making a decision.
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