The Lightning Network is on fire with the network showing growth across nearly all metrics. Notably, the network has gained popularity as the optional scaling solution for Bitcoin. It introduced private payment channels to reduce congestion, provide micro-transaction capabilities, and lower fees. While all of these options are well known, many people are surprised to learn that the Lightning Network also gave Bitcoin the capability to host Dapps.
Dapps are on Fire
Dapps are decentralized protocols designed to run on blockchains. The Ethereum network is by far the largest Dapp infrastructure in use today. Dapps are usually credited with a project's success. They are how regular users interact with cryptocurrencies. As such, the more dapps that operate on a platform and the more popular the protocol.
More than Speed and Conveniences
The Lighting Network provides more than speed and convenience. Users have taken note that the protocol has a growing Dapp infrastructure and economy. This diverse ecosystem now encompasses +100 apps. These Dapp span the gambit of the market with over 20 categories of usage.
Lighting on the Rise – Dapps on Fire
The rise of Lighting Network Dapps can be looked at in the larger scope of LN adoption. The Lightning Network’s capacity continues to expand with reports showing that payment volume increased by 410% between the start of 2021 and 2022. The total capacity of the network continues to peak as well. Today's Lightning Network holds over $100 million in total value locked.
Network Strength is Up
What's Driving this Adoption? – Dapps on Fire
This growth rate can be traced back to some particular developments in the market over the last few years. For one, the legalization of Bitcoin in El Salvador was a major move that drove LN adoption up. The country made Bitcoin legal tender and issued all citizens a Paxful Lightning Network wallet as part of their launch strategy.
Further north, the popular mobile payment processor CashApp integrated Lightning Network technology as part of their crypto strategy. The firm Block raised eyebrows when it integrated Lightning into its platform which currently has over 70 million active users.
Exchange Adoptions on the Rise
Another major force driving Lightning Network adoption is exchange integration. Exchanges have taken note that the Lightning Network can save traders on fees and improve responsiveness. As such, the number of CEXs (Centralized Exchanges) integrating the tech has ballooned. Notably, Kraken, Okcoin, and OKEx are just a few examples of high-level Lightning Network integrations that were completed successfully.
Will Lighting Give Ethereum a Run?
The Lightning Network is still very far from taking over any positioning in the Dapp market. However, the protocol has been known to make massive maneuvers. If LN developers can secure a few more major integrations, the network could find itself in the midst of a battle for supremacy in the Dapp market. For now, LN-powered Dapps are just the tip of the iceberg.