Unraveling Peer Influence in DApp Adoption: An Empirical Study Using Lifetime Data from the Ethereum Platform

Abstract

Decentralized applications (DApps) – digital applications that operate on blockchain and smart contract technologies – have proliferated across diverse industrial sectors. With the recent surge in DApp adoption, we have yet to understand the impetus behind this rapid expansion. Our research aims to bridge this gap by examining the role and extent of peer influence on individual decisions to adopt DApps. Given the inherently peer-to-peer nature of blockchain and the robust sense of community amongst users, this influence is expected to be significant. To identify evidence, we empirically study Ethereum, the world's largest DApp platform. We utilize an unprecedented dataset encompassing the entire lifetime of Ethereum, from inception to the present day. Our findings reveal a positive correlation between DApp adoption and the decisions of proximate peers. We further uncover that the magnitude of peer influence varies depending on network structure characteristics, including network size, density, and the degree of decentralization. These results substantiate the powerful role of peer influence in driving the diffusion of DApps, operating through a variety of mechanisms. Such insights could offer valuable guidance for industry practitioners to devise targeted marketing strategies that capitalize on this peer influence to optimize DApp adoption rates.

Keywords: blockchain, decentralized application, technology adoption, technology diffusion, peer influence