NFTs: Unit of Data Intersecting Apps and Dapps

Team Members

Team members: Michael Ashong, Issaka Adams, Saratu Abiola, Dilara Akdemir, Aleksandra Sevastianova

Designer: Andrea Benedetti (DensityDesign)

Project facilitators: Anne Helmond, Esther Weltevrede, Michael Dieter, Jason Chao

Contents

Summary of Key Findings

Apps in Android and Apple stores and Dapps on blockchain may operate on entirely different infrastructures, but NFTs are an area where both dapp and app spaces intersect in interesting ways. While most dapps are not in the app store, the most popular among them find ways to exist in both app and dapp worlds, albeit with different affordances for users. Axie Infinity, though, demonstrates the real-world impact of NFT games and perhaps shows us how these assets can be monetised in the future.

Introduction

With blockchain gaining popularity and $23 billion in Non-Fungible Tokens (NFTs) built on blockchain sold in 2021, it is clear that gaining an understanding into how Distributed Applications (Dapps) in blockchain work is key to understanding the evolution of datafication and what the future of datafication holds.

The emergence of blockchain has resulted in a split in the digital space and a further evolution in datafication. The internet we know today (Web 2.0) is controlled by a handful of companies such as Google, Facebook and Amazon that exchange our personal data for goods and services. Big data generated from these tech actors is then used to more and more accurately sell goods and services to users through ads by being able to get as much information from users as possible to more accurately determine what they like and are looking for. Other actors in the space are also able to use Big Data to better target ads of a non-commercial sort, such as political ads, or ads that seek to promote ideas to a large number of people. This state of affairs has brought several issues to the fore, including surveillance and privacy issues, as well as for targeting religious and political (mis)information.

The internet run on blockchain (web 3.0) seeks to depart from this dynamic. Blockchain is a distributed database that is not centered on any one server. Data is tabulated in a database then stored in blocks, and once a block is filled the data is then moved to a different block, thereby forming a chain. Unlike other databases, there is no one person in charge of all blocks, and each block is immutable once created because they depend on that which comes before and after it for meaning. Also, because the data is distributed, it creates redundancy that helps ensure the fidelity of the data across the various servers on which the data is contained. This decentralization is a key feature of blockchain, and seeks to build higher degrees of trust in the tools (cryptocurrencies, applications, etc) built on it. Apps can be built for blockchain, but they must be coded differently because of the distributed nature of the infrastructure. As such, these apps are called Distributed Applications, or Dapps. Through Dapps, users can do everything from gaming, join online communities, buy cryptocurrency, buy NFTs, etc.

The specific affordances of blockchain, specifically the immutability once a transaction occurs on it, allow ownership of digital assets to be easier to prove. As a result, there has been a boom in the sale of digital assets, specifically of non-fungible tokens (NFTs). NFTs are digital assets that are non-fungible one-of-a-kind digital assets that can actually be owned by one person, unlike the average photo, video or GIF on the internet for which it can be difficult to tell ownership. These NFTs allow owners to buy access to games linked to the art and even online communities.

Research Questions

We focused our research on NFT apps and dapps because of its mainstream popularity of NFTs, and with the following questions:

• What kind of dapps are being built for blockchain, given blockchain’s specific affordances?
• How do blockchain dapps interact with mobile store apps?

As we began our work, we had the following expectations:

• Because of the mainstream popularity of NFTs, we expected that there would be a lot of similar apps and dapps, so that one could compare affordances of the same platform in blockchain and non-blockchain infrastructure
• Because of the sensitivity towards privacy and decentralization in the blockchain space, we also expected that to carry over into the app space, with NFT apps in mobile app stores having less trackers and not requiring such permissions as access to users’ cameras and external storage

Initial datasets

• our database of NFT apps in Apple, Android and Dapp stores that we used to create a mapping of NFT apps and dapps https://docs.google.com/spreadsheets/d/1gJNDrYW64VO6DNOyfvwLowyfjXROyQML/edit?usp=sharing&ouid=117805146038825254699&rtpof=true&sd=true

• For our Axie Infinity case study, we created a database of clone apps using the App Store Scraper that are linked to the Axie Infinity Dapp https://docs.google.com/spreadsheets/d/1VUVTYAfxpKd_b2CySnRBlEiORVQsN3eA/edit?usp=sharing&ouid=117805146038825254699&rtpof=true&sd=true

• Having Axie Infinity clone apps database, we then imputed them into the APK Analysis to derive their trackers and permissions https://drive.google.com/file/d/18cZBDmjwF5oxXMaMoc558zFOjvDVPJmy/view?usp=sharing

• Table for the manual search result of “Axie Infinity” on the App Store https://docs.google.com/spreadsheets/d/1cguxH-asxv3O43YqfuXtMzSy81gzg5IUrH0oeaw08d8/edit#gid=0

Methodology

To know the extent of how Web 2.0 differs from 3.0, we situated it in the affordances and security in contrast of the two infrastructures. We first queried for the top 50 NFT apps in both App- and Google Play Stores. These are the apps running on non-blockchain or Web 2.0. According to Statcounter statistics on global mobile operating system market share, between December 2020-December 2021, Android had 70.01% of the market share while Apple (iOS) had 29.24% (Statcounter, 2022). This shows the global dominance of the Android Operating System developed by Google. Thus querying Google and the Apple Stores captures almost all global mobile smart operating systems.The querying allowed us to obtain the tracker Ids which are needed to be used in the AppInspect software for the analysis. The purpose is to have the Android Application Package (APK) to see the permissions and trackers. However, due to privacy reasons, the Apple Store does not give out the track Ids. Thus, only the NFT apps found on the Google Play Store were analysed using the APK.

We also queried for the popular first 50 NFT apps downloaded from the section of the store of Dapps known as DappRadar. These are the apps running on blockchain or Web 3.0. We limited ourselves to those downloads within the last 30 days. We chose the last 30 days data on the DappRadar because of the ever-evolving nature of the crypto space which is highly volatile and unpredictable. Therefore, the 30 days ensured that we had somehow a long duration to capture up-to-date data on the activities on the apps. Further, we selected the DappRadar because it works as a tracking for worldwide Dapp Store. It is accurately thought of as an analytics dashboard in which it tracks and provides real time data on Dapp usages. Knowing the first 50 NFT apps allowed us to determine what kind of Dapps are being built for blockchain, given blockchain’s specific affordances. This was an integral part of our research questions. To be able to visualise the functionality of these apps, we sorted them into categories including Game, trade NFTs, make NFTs, and also the crypto currency needed for the transaction. The crypto currency needed for the transaction allowed us to refute or confirm the popular notion surrounding Web 3.0 that it is decentralised. If Web 3.0 is indeed decentralised, then we should find currencies running on different open-source blockchains that are used in transactions. If we do not find this or it turns out they are centred on a single blockchain then it means the claim of Web 3.0 being decentralised might be misleading or should be understood in a particular context.

We then copied individually the names of these apps found on the DappRadar into both the App Store and the Google Play Store to see whether they are also available or not. This is to help us see whether App and Google Play Store, which are Web 2.0 infrastructures, are different or similar to the web 3.0 DappRadar. If they are similar, then we expect to find the same apps on both infrastructures. If this is not the case, then it means they are not similar and raises the relevance to study its differences in affordances. Also, this helped us to test our hypothesis on security and privacy on NFT apps found on mobile app stores—whether NFT apps in mobile app stores have less trackers, and not requiring such permissions as access to users’ cameras and external storage or not before they are allowed to use. Further, we were also able to test our assumption that due to the mainstream popularity of NFTs, there would be a lot of similar apps and Dapps, allowing us to compare affordances of the same platform in blockchain and non-blockchain infrastructure. To dig deeper on the differences and similarities between the Dapps and apps found on the App- and Google Play Store, we took the number one NFT on the DappRadar — “Axie Infinity”, in both the stores. This is to allow us to see the point of in-depth intersection between the Dapps and regular or apps found on the App- and Google Play Store. Knowing the point of intersection allowed us to provide an answer to the research question on how blockchain Dapps interact with Google and Apple store apps.

Findings

Differences in the NFT landscape in App Store and the DappRadar

The makeup of the apps and dapps concerning NFTs hint at larger differences in the way users are engaging with blockchain-based apps. Where more of the dapps can be classified as for NFT gaming and collecting, most NFT apps are more for viewing and collecting. In our analysis, we categorized the apps as follows:

• NFT Marketplace - Marketplace apps where NFTs can be traded alongside other cryptocurrencies

• Make NFTs - Applications where users can mint (create) NFTs

• Trade NFTs - Apps which enable buying, selling, publishing NFTs

• Learn NFTs - Apps providing guides and instructions on various aspects of NFT - creating, collecting, trading etc.

• NFT Collectibles - Apps containing NFT galleries available to artists and collectors

• NFT Facilitator - Apps enabling users to connect to decentralized nets

• NFT Wallet - Cryptocurrency wallets supporting NFTs

• NFT Community - Social media apps to bring together those interested in NFTs

• NFT Alerts - NFT news, alerts, and notifications helping users to find and trade NFTs

• Game - Apps enabling users to create, collect, and trade NFTs in a form of a mobile game

The one category of apps that are not in the dapp store are the apps that allow one to learn about NFTs.

Figure 1: Categorisation of apps on the App Store, Google Play Store, and the Dappstore/Radar

The graphic demonstrates clearly the differences between regular app stores and dapps stores, specifically the proliferation of gaming dapps. While Apple and Android apps mostly allow users to make art that can be sold as NFTs, view NFT collections, store NFTs in their online wallets and even to save NFTs for potential trade (buy or sell), NFTs themselves cannot be minted on Ethereum or bought in the app space. Because these dapps are unlike games in web 2.0 that trade in access to personal information and can load trackers onto your phone to enable them commodify their access to user information, blockchain dapps instead make money by having users pay for digital assets like NFTs, and leverage on these assets for access to games and online communities. This is why there are markedly more games in the dapp space than in the app space. As such, NFTs point to an evolving means of money-making in the digital space.

It is worth noting that some platforms may be in both Dapp and App stores, but have different affordances. OpenSea, the popular NFT marketplace responsible for $3 billion of the $4 billion made from NFTs in January so far (Hum, 2022), allows users to connect to their profile, discover new work, save favorite NFTs, search and view collections. However, one can neither create a new profile nor actually buy an NFT using the OpenSea app. To do this, one would need to access OpenSea ’s dapp built on ethereum. Rarible, an NFT marketplace built on the blockchain protocol Rari, also has an app that lets users view and save favorite NFTs for potential future buying, but only allows one to mint NFTs and buy in the dapp.

Case Study: Axie Infinity and Its Third Party Support Apps

To answer the research question “How do blockchain dapps interact with mobile store apps?,” we took the most popular NFT app downloaded from DappRadar within the last 30 days as a case study. We searched it on the App Store and Google Play Store to find out whether the same apps are available.

Axie Infinity is the most popular NTF dapp we found with 660,000 active users. It was developed by Vietnamese studio Sky Mavis in 2018 and is now valued at $3 billion. In this game, players earn money training and fighting the Axie versions of Pokemon (Naavik, 2021). Interestingly, 40 percent of Axie players are reportedly based in the Philippines (Naavik, 2021). The developer says 25 percent of its players have never had a bank account before, so their Axie wallets are the first financial services they’ve ever been able to access (Naavik, 2021). In some places in the Philippines, people are paying their rent with the game’s SLP token. That helps explain how Axie’s total trading volume now exceeds $2.4 billion (Naavik, 2021).

Our findings suggest clear links between the App stores for Apple and Google Play and DappRadar. Even though the App Store only had 10 search results for the app Axie Infinity when searching it manually from the computer, the apps suggested can be considered third party support apps for the original dapp Axie Infinity. This is because the apps’ features allow for a relation to the original dapp. For instance, the first search result suggests the app called Axie Infinity Marketplace, which can be considered a third-party support app because allows you to save your favourite axies, lands, items and bundles and share them with friends. Moreover, users of the app can directly open a version of the official Axie Marketplace, which allows access to the original Axie Infinity dapp even though it is not available on the App Store.

Even though there are apps available on the App Store that have relations to the original dapps, there are also apps on the App Store that seem to but certainly do not. The increasing popularity of NFTs, how people are only just beginning to understand it, and dapps’ exclusiveness on dapp stores is leading some app developers to publish their own version of popular dapps or outrightly attempt to clone popular dapps.

Figure 2: Axie Infinity search results on the App Store

After examining the App Store, we searched for “Axie Infinity” on the Google Play Store. As illustrated in Figure 2, similar results as in the App Store can be found. We find a plethora of apps using the name “Axie Infinity” pretending to be the same game, so much so that conned users have complained about the falsehood. Putting the top ten results for Axei Infinity in the App Store Scraper, we got a list of these ‘fake’ Axie Infinity apps and copied the app IDs for analysis in the APK scraper. While some of these apps do not have too many permissions requested of a user (less than 10), there are some that have as many as 30.

Availability of the DappRadar App “Axie Infinity” on the App- and Google Play Store

To further research the case study of the App Axie Infinity from the DappRadar we examined the top 50 results found in both App- and Google Play Store to get a greater overview of the games accessible on the Web 2.0. Figure 3. shows what kinds of Axie Infinity Apps exist in the App and Google Play Store, while the clusters show the groups of apps that tend to be related with each other in the app stores. There are guides to assist players learning the game, price tracking of the game’s crypto-token, clones from other developers trying to parasite on the trend, gameplay managers and even training simulators. There are significantly more support apps on GooglePlay, which may relate to the larger user base for Android in South East Asia as explained above. One type of support app worth drawing attention to is the scholarship manager apps. Due to the high cost of entry into the game, more established players have begun lending new players crypto to play, but then take a cut from any winnings in return. This is called granting them a scholarship. It essentially turns some users into assets or sources of rent - they become assetized - revealing another aspect of the hyper-financial character of dapps, but one that spans both blockchain and mobile app infrastructures.

Figure 3: The top 50 search results for Axie Infinity on the App- and Google Play Store categories in its affordances

6. Discussion

Via our research we were able to explore the relations between blockchain built decentralised applications that are referred to as Dapps and traditional applications for mobile platforms like Google Android and Apple iOS. To conduct our query we decided to refine the premise of our research to strictly NFTs in both the dapp and app stores. The dashboard presented on the dapp store differentiates itself from the traditional app data as it sets emphasis on alternative metrics such as Users, transactions etc.. This data is then categorised in time periods of hours, days and all time. To conduct this study, we searched for NFT apps in GooglePlay, Apple App Store and DappRadar and analysed the different stores' results. We visualised our results to accentuate the nuance of NFTs in both of the market space, we were able to detect fraudulent software, help guides, news etc.

Our research showed us that there is no correlation between the blockchain based applications and the traditional application. But there is a clear distinction in the delegation of the new technology. Upon more detailed research into “Axie Infinity”, we learned that the NFT game has transcended virtual reality and has tangible implications. The extent to which datafication is applied within the afforded infrastructures of the game allows the users to in essence gamble their financial and residential existence in Axie Infinity. An acute exploitation of new players is a fundamental aspect within the dynamic. Activities based on the NFTs have become ubiquitous within media spaces. For instance, Opensea is currently the most prominent marketplace for this. The site showcases the popularity of Ethereum for digital assets as well as NFTs. Nevertheless, the dynamic established between the polarising marketplace and its user raises questions if the centralisation of a market paradoxically resides within the decentralised economy. Does it mimic some of the imminent platform infrastructures that we observe of Facebook and Google? Is it possible that the monopoly structures will also be present in the decentralised economy?

7. Conclusions

To conclude, this research aimed to investigate what kind of dapps are being built for blockchain, given blockchain’s specific affordances? Moreover, it examined how blockchain dapps interact with mobile store apps, using the case study Axie Infinity. Our study demonstrates that although Blockchain dapps operate in a different landscape from the Google Play Store or the App Store, there are currently apps that act as portals between both landscapes. This can be seen by the many third-party support apps whose affordances allow to have relations with the original dapps. Additionally, our research emphasises the ways in which the emergence of digital assets such as NFTs have an impact on digital and non-digital economies. The implications of this Web 2.0 and Web 3.0 split is that there is an evolution in the digital economy. Even if NFTs as an asset class do not remain popular, they demonstrate that digital assets can gain ground and can make an impact on national economies. Nevertheless, with our study we were able to detect intriguing similarities that may contradict the foundation of Web 3.0. Market leaders Opeansea are a centralised hub for news about NFTs, whether that is based on their innovation or their audience's preference is not clear. However, one must remain vigilant during the fruition of the decentralised economy lest it is the same structure with new technology.

8. References

(January 5, 2022) Mobile Operating System Market Share Worldwide. Dec 2020 - Dec 2021. Statcounter. https://gs.statcounter.com/os-market-share/mobile/worldwide

Naavik. (2021, November 23). Axie Infinity: Infinite opportunity or infinite peril? Naavik. Retrieved January 14, 2022, from https://naavik.co/business-breakdowns/axie-infinity/#axie-decon=

Hum, T. (2022, December 12). As NFT sales top $4 billion, what’s in store for 2022? Yahoo. Retrieved December 14, 2022, from https://finance.yahoo.com/news/as-nft-sales-top-4-billion-whats-in-store-for-2022-210612228.html

Howcroft, E. (2022, January 11). NFT sales hit $25 billion in 2021, but growth shows signs of slowing. Reuters. https://www.reuters.com/markets/europe/nft-sales-hit-25-billion-2021-growth-shows-signs-slowing-2022-01-10/