Evaluating the Impact of Cross-Chain Deployment on Dapps' Market Performance in Web3 Ecosystems

Abstract

This paper investigates the impact of cross-chain deployment on the market performance of decentralized applications (Dapps) within the evolving multichain Web3 ecosystem. While cross-chain Dapps benefit from broader user reach, improved scalability, and enhanced resilience, they also face significant challenges, including technical complexities, security risks, and fragmented liquidity. This paper analyses how Dapps' transaction distribution across multiple blockchains influences their market performance. Preliminary findings reveal that Dapps operating on multiple chains tend to underperform in terms of market capitalization, token price, and transaction volume compared to those concentrated on a single or few chains. These results highlight critical concerns about the effectiveness of cross-chain strategies.