I aimed to characterize the health of the crypto ecosystem at the most basic level. For example, quantifying the number of active wallets, the population of active developers, & other dynamics within the ecosystem.
The slides are embedded here with summary commentary below and linked here.
My Top 15 Observations from the Data:
- 2.5m wallets are active daily across web3. Flat wallet count likely means relatively constant GDP in the ecosystem. We need more products to attract new users to bring in more GDP.
- Binance, Solana, Polygon, & Ethereum wallets represent more than 80% of those daily active users.
- Centralized exchanges manage roughly 100m total active wallets.
- Trading volumes are down 60% which is mostly driven by asset price reductions. DEX average transaction size declined from $8k to $1.4k.
- Centralized & decentralized exchanges trade at the same multiple & move in lock step.
- NFT buyers outnumber DEX traders about 35:1 over the last 6 months but the traded volume is roughly equal between the two groups.
- NFT trading volumes have fallen 97% from the top.
- 40% of NFT buyers use Solana. Because the average Solana NFT is worth 10% of the average Ethereum NFT, Ethereum retains 90% of NFT traded value.
- L2s (Arbitrum & Optimism) account for 30-40% of all transactions on Ethereum, but consume only 2% of the total gas, cementing their value.
- About $250m flows into L2s each month.
- MEV (maximum or miner extracted value) has tapered off due to FlashBots’ searchers. Lower MEV means users pay lower fees when they trade because the market is more efficient.
- Developers push about 300,000 smart contracts to Ethereum every month, a figure that has been flat for the last five months.
- Roughly 5,000 developers push code to web3 every week, down 20% from the beginning of the year. This number needs to increase significantly for the ecosystem to thrive.
- Web3 companies (aside from L1s) have begun to trade at similar multiples to their web2 counterparts.
- Web3 multiples are increasingly correlated to revenue. The investor community has matured its understanding of how to value a web3 company. This milestone will begin to shift the early & late stage private markets’ valuations. This is why marketing will become so critical in the next 12 months.
Overall, the crypto ecosystem finds itself in a winter. I see it as the coiling of a spring. So much innovation has been unleashed in the last few years, most of us are still absorbing the implications & working to identify the best applications of the 4 fundamental innovations of web3.
A few notes about the data:
- web3 data is fuzzy. None of these numbers have the precision or accuracy of a publicly traded stock whose figures have been audited and are governed by accounting standards. I share these figures as directional data, not hermetic evidence of a Higgs boson hidden within a blockchain.
- the data is collected primarily from Dune, but it includes data from others like gokustats.xyz & tokenterminal.com
- many of the queries in Dune are linked in the dashboard. I’d appreciate any help, pointers, guidance to improve them. My goal is to improve accuracy & precision over time.