Our Network: Issue #66

Coverage on PoolTogether, Nexus Mutual, UMA, and Sushiswap.

This is issue #66 of the on-chain analytics newsletter that reaches nearly 10k crypto investors every week 📈

About the editorSpencer Noon is an investor at Variant, a first-check crypto VC fund.

✨ Together with our partners:
Image 2020-11-13 at 10.54.34 AM

1inch, whose v2 offers the best rates by discovering the most efficient swapping routes across all DEXes—swap on the customizable new 1inch UI. And also Aave, where you can experience DeFi: Deposit, Earn, & Borrow on Aave.


This week our contributor analysts cover DeFi: PoolTogether, Nexus Mutual, UMA, and Sushiswap.

① PoolTogether

👥 Leighton Cusack

📈 $1.1 million of prizes in 5 weeks

👉 Jump into the next pool

  • PoolTogether is a protocol for no loss prize savings. Users deposit money to have a chance to win prizes and can withdraw their money at any time. Prizes are comprised of the interest accrued on all deposits, of which all depositors automatically receive the POOL governance token. A key metric for the protocol is total prizes awarded — with $1.2 million in prizes that have already been distributed. Recently the pace of growth has accelerated with $273,000 awarded in the last week alone.

  • Since prizes are derived from interest earned on deposited funds, total assets deposited represents an important metric. The protocol currently has $155 million in total deposits. The largest prize pool is USDC with $63 million deposited followed by Dai with $52 million deposited.

  • A portion of every prize is redeposited back into the prize pool generating a higher effective APR and larger future prizes. This was first activated by governance 3 weeks ago and amounts to an effective ~2.5% of the prize value — resulting in $30,000 of reserves being collected so far.


② Nexus Mutual

👥 Richard Chen

📈 Active cover amount is $635M, up 9.27x YTD

👉 Join the newly created Nexus Community Fund

  • Protocol cover launches on April 26, which means Nexus will expand its coverage beyond smart contract bugs to oracle failures as well as economic and governance attacks. Nexus also covers centralized exchanges and custodian hacks, with millions of dollars of coverage on Binance, BlockFi, Celsius, and others. In addition, when DeFi projects launch on layer 2 and other chains, the new Nexus cover policy will apply automatically.

  • Annualized premiums are $18.2M, with additional revenue coming from Nexus’s sell spread and investment earnings. Even with the Yearn claim payouts in Feb, Nexus has been massively profitable unlike many traditional insurance companies that lose money on their core business (premiums - claims & expenses).

  • NXM currently trades at around 1.6x book value (and even lower for wNXM). Book value is the ratio between the market cap and capital pool size. By comparison, mature traditional insurance companies trade at 3-4x book value yet have much lower growth potential.


③ UMA

👥 Vishesh Choudhry

📈 UMA has reached $174M TVL (+335% YTD)

👉 Join the UMA community

  • In Feb, UMA announced its KPI options, which is a product offering that grows in value with TVL in the protocol. Since rewards for this KPI option are locked in the protocol it also counts towards TVL. In Dec 2020, TVL was ~$40M, which has since grown to ~$174M. This is primarily held in $UMA, $WETH, $renBTC, $PERL, and $USDC collateral. The main synthetics built on this value are UMA options (uTVL-0621 and UMAc35-0421), YD-ETH and YD-BTC, and a few smaller offerings. This is a ~335% increase YTD.

  • UMA provides tools for devs to create their own synthetics contracts. In Nov 2020, they launched a program to incentivize devs to build on top of UMA. To date, 85 products have been created using UMA, many of which are still active or hold value. This growth started to uptick in March 2021.

  • UMA also offers a price oracle system upon which these synthetics contracts are built, generally used at redemption/expiry of options. Voters vote on prices to update these oracles. The protocol has seen 103 such oracle requests to date. Over time 92 different voters have contributed to these price oracles.


④ Sushiswap

🥇 Pierre-Yves GendronAdam Cader

📈 SushiSwap is Ethereum’s second-largest DEX

👉 Join the Sushiswap community

  • Sushiswap is currently ranked as the second-largest DEX, processing weekly volumes of ~$2B from ~10k traders, second only to Uniswap which processes ~$7.5B in volume from 175k traders — This implies that traders on Sushiswap execute, on average, larger trades ($200k weekly) than those on Uniswap ($43k weekly).

  • Sushiswap's weekly protocol fees (0.05% or 1/6th of LP fees) are currently ~$1M, implying an annualized yield of 2.2% (1.3% on a fully diluted basis) for token holders. Since January yields have diminished following a decrease in trade volume, while the price of SUSHI increased in part due to the Coinbase listing in March.

  • Sushiswap's liquidity (TVL) is $4.34B, which is slightly lower than Curve's ($4.54B) and Uniswap's ($5.68B) TVL. SushiSwap's liquidity is spread across hundreds of pairs, with 49% being in the WETH/WBTC pair, 22% in WETH/Stablecoins pairs (USDC, DAI, USDT) and 10% in the WETH/SUSHI pair.

  • The correlation between Sushiswap’s TVL and the ETH gas network fees remains low at an R^2 value of only 0.013 — indicating there is essentially no correlation and that Sushiswap’s liquidity incentives are a strong protocol moat even when fees to enter pools are high.

  • Sushiswap added more than 1128 distinct new liquidity providers in just the first eight days of April. The amount of returning LP’s increased from 642 to 1951 from February to March: a 230% net change. Moreover, a stable level of returning LP’s can decrease future assumptions of pool volatility.


About the editor: Spencer Noon is an investor at Variant, a first-check crypto VC fund.

Our Network: Issue #65

Coverage on Solana, Celo, Ethereum, and Bitcoin.

This is issue #65 of the on-chain analytics newsletter that reaches nearly 10k crypto investors every week 📈

About the editorSpencer Noon is an investor at Variant, a first-check crypto VC fund.

✨ Together with our partners:
Image 2020-11-13 at 10.54.34 AM

1inch, whose v2 offers the best rates by discovering the most efficient swapping routes across all DEXes—swap on the customizable new UI. And also Aave, where you can experience DeFi: Deposit, Earn, & Borrow on Aave.


This week our contributor analysts cover Solana, Celo, Ethereum, and Bitcoin.

① Solana

🥇 Omni Analytics, Vishesh Choudhry

📈 Solana grows to 566 validators, $5.73B total stake

👉 Join the Solana community on Telegram

  • The Solana network uses an innovative Proof-of-History consensus algorithm to solve the commonly cited blockchain scalability, decentralization and security trilemma. Their multi-year efforts have culminated into a network that supports 65,000 transactions per second across blocks generated every 400ms, all facilitated by an interconnected node cluster of 566 validators. As adoption has increased, an ecosystem of over 120 partners has formed around the network to support everything from NFTs to Oracle services.

  • Using a 24 hour data pull from the Solana Beach Block Explorer, in this period, their blockchain maxed out at 2323 transactions in one block. The average block had a success rate of over 80%, included 1.1 instructions per transaction and generated .00274 SOL in fees.

  • Total stake on Solana has reached 300M SOL. At the current price of $19.10 this equals ~$5.7B staked. Solana staking is seemingly well distributed — The top 20 validators account for 130M SOL, but after that, the validator share is fairly evenly distributed among the remaining 546 addresses. Validators can set a “commission” as the % of rewards kept by the voter. 56M of stake is set at a 100% commission and 18M at zero. The vast majority of stake is concentrated at a 5-10% commission for the validator.

  • Most validators are not “delinquent” — After epoch 102 staking rewards and # of validators started to kick-off. Staking rewards continue to grow, now up 201M credits in epoch 165 (with some dips). The number of validators has grown to 566, with most validators staying “current” and continuing to stake.


② Celo

👥 Claire Belmont

📈 Celo Accounts Grow to 180k Fueled by UBI Adoption

👉 Join the Celo community on Discord

  • The number of addresses grew 600% to 181,000 in Q1 2021. Part of the growth seems to be driven by impactMarket, a mobile-first Universal Basic Income dApp that gives $0.53/day to those in need. Today 13,000 beneficiaries across 64 communities are receiving cUSD, making it one of the largest UBI projects in the world. Data suggests beneficiaries are then staying in the Celo ecosystem because they can earn rewards and pay local merchants. If you like this project consider donating to impactmarket.com.

  • The number of transactions on Celo grew 300% from 6,800 to 31,600 in Q1 2021 totaling ~3.5m transactions over the past year, which is more than Polkadot and NEAR combined. The activity appears to be driven by 132 active developers building projects on Celo.

  • The amount of cUSD on the network grew >250% from 15m to 43m in Q1 2021. It’s backed by $670m worth of crypto assets (CELO, BTC, ETH, DAI) corresponding to a 1595% ratio. Since mainnet launch cUSD consistently maintained its algorithmically-stabilized value, deviating no more than 0.8% from 1 USD.


③ Bitcoin

👥 Nate Maddrey

📈 BTC Holding Is On The Rise

👉 Join the Bitcoin community

  • After growing throughout 2020, the percent of BTC supply held for at least a year has dropped from 59% to 55% in 2021. During rapid price increases this metric tends to decline as long-term holders move to sell their BTC — but something interesting happened on March 12th, 2021: the percent of BTC held for at least a year started to increase again. A year to the day after the March 2020 crash, this increase indicates that many who bought BTC in the wake of the crash have been holding ever since.

  • The percent of BTC held for at least 30 days also declined to start the year. Historically this metric drops during periods of market frenzy, like Aug. 2017 and Jan. 2018; However, after falling to a two-year low of 80%, it has since rebounded to 89%, another sign of increased holding going into Q2.

  • The number of addresses holding BTC is increasing at a relatively fast rate in 2021. The number of addresses holding at least 0.001 BTC has grown from 16.69M on Jan. 1st to 18.26M on Mar. 31st, a gain of 1.57M addresses. For context, the number of addresses holding at least 0.001 BTC grew by 2.07M in 2020.


④ Ethereum

👥 Alex Gedevani

📈 22% of ETH supply in smart contracts

👉 Explore Ethereum

  • The exodus of ETH from centralized exchanges continues with a 27% drawdown and counting since late August. With the % ETH supply in smart contracts rising to 22%, utility of ETH is demonstrated as it’s being used across various functions within DeFi — currently with a TVL of 9.7m ETH driven by Maker (with 2.9m ETH) and Compound (with 1.8m ETH). (Source: DeFi Pulse).

  • Network usage exhibits healthy growth as demonstrated by a steady increase over time in transactions per day to a recent ATH of 1.3 million transactions. Lower avg. transaction sizes indicate broader utility in Ethereum and more retail participation, vs the short-lived and whale driven ’17 cycle.

  • In March, 47% of miners’ revenues came from transaction fees, which were down 10% M/M to $648m. Although fees are healthy for long term sustainability, Ethereum is overpaying for security at the expense of users. EIP-1559 (ETA July) brings deflationary pressures as base fees will be burned.


About the editorSpencer Noon is an investor at Variant, a first-check crypto VC fund.

Our Network: Issue #64

Coverage on Emerging Networks.

Earn up to $5000 by participating in our new $COMP bounty program.

This is issue #64 of the on-chain analytics newsletter that reaches nearly 10k crypto investors every week 📈

About the editorSpencer Noon is an investor at Variant, a first-check crypto VC fund.

✨ Together with our partners:
Image 2020-11-13 at 10.54.34 AM

1inch, whose v2 offers the best rates by discovering the most efficient swapping routes across all DEXes—swap on the customizable new UI. And also Aave, where you can experience DeFi: Deposit, Earn, & Borrow on Aave.


This week our contributor analysts cover emerging networks: NEAR and bloxRoute.

① NEAR

🥇 Vishesh Choudhry (Bounty Winner)

📈 NEAR has processed nearly 2b transactions to date

👉 Join the NEAR community on Discord

  • NEAR Protocol is (as of writing) on blockheight 33,012,780 with 181 online nodes (60 validating). NEAR processed an avg of 15,734 transactions in the past 14 days with blocks being validated in ~1s. Transaction volume picked up October 2020 and has been sustained (spikes excluded) with a slight uptick in March 2021.

    Gas paid for transactions broadly mirrors this trend (except with the majority of transactions being low-cost). A large chunk of March volume has come from NEAR’s bridge relayer.

  • The number of daily active accounts on NEAR has been rising since launch (up to ~1000 now) and active contracts have hovered around 300. NEAR recently announced a few integrations, particularly NFT applications and standards. Additionally the project announced the launch of its Rainbow Bridge this week.

  • Reported circulating supply (of total 1b NEAR) is ~330M, with up to 5% in annual inflation and with 70% of transaction fees burned. However, transaction fees to-date (denominated in NEAR) have been negligible. Current stake volume is ~400m (staking locked NEAR), with 25% from the top 5 validators.


② NEAR (cont.)

👥 Adam Cader

📈 New NEAR Accounts Surge 310% 2021

  • The amount of new NEAR Protocol contracts deployed on its mainnet increased by 6,116 over the past 5 months. This represents a net growth of ~320% since September. As NEAR aims to be competitive in the smart contract landscape, the relatively large smart contract growth is key. The percent increase has stabilized into a more linear function against time, needing further catalyst for exponentially modeled growth.

  • The total amount of NEAR accounts has increased ~310% since January. This appears to be in the early stages of an adoption s-curve, with no clear point in the chart where the growth has reached an inflection point.

  • NEAR’s Github activity indicates robust commitment from the development team to refine the protocol. 68% of commits to the Near repository were in the past 90 days, and 54% of additional development occurred in this time period as well.


③ bloXroute

👥 Aleksandar Kuzmanovic

📈 Blockchain Scaling vs. Cost Perspective

👉 Join the bloXroute community on Discord

  • bloXroute Labs is building the crucial network infrastructure, aimed at scaling all blockchains, by enabling a fast blockchain network layer. It is currently considered the fastest Ethereum mempool service provider.

    The average delay a transaction experiences to get on-chain is ~ 1/(μ-λ) where μ is the TPS the blockchain can sustain and λ is the average transactions arrival rate. The figure shows normalized λ/μ for several blockchains that are known to have very low fees.

  • In Ethereum, μE is controlled by the gas limit parameter, while λE is gas used in a block. Hence, μE-λE is the unused gas in a block. The figure illustrates its effect on fees, for two weeks (blue vs red). When the system operates at low “unused gas” range, the cost substantially increases.

  • For a fixed λE, a larger μE reduces transaction fees. When the gas limit μE decreases by 20%, the transaction fees double. Projecting this to a scenario where the gas limit would have been increased from 12.5M to 15M, the figure shows the expected daily reduction in transaction fees in a period.


About the editorSpencer Noon is an investor at Variant, a first-check crypto VC fund.

Our Network: Issue #63

Coverage on Flashbots, OpenSea, CryptoPunks, and Reflexer.

Our Network is hiring—click here to see our current job openings.

This is issue #63 of the on-chain analytics newsletter that reaches nearly 10k crypto investors every week 📈

About the editorSpencer Noon 🕛 is an investor at Variant, a first-check crypto VC fund.

✨ Together with our partners:
Image 2020-11-13 at 10.54.34 AM

1inch, whose v2 offers the best rates by discovering the most efficient swapping routes across all DEXes—swap on the customizable new UI. And also Aave, where you can experience DeFi: Deposit, Earn, & Borrow on Aave.


This week our contributor analysts cover Emerging Networks / Themes: Flashbots, OpenSea, CryptoPunks, and Reflexer.

① Flashbots

👥 Robert Miller

📈 Miners collected 174 ETH in Flashbots fees in Feb

👉 Join the Flashbots community Discord

  • Flashbots is an R&D organization working on mitigating the negative externalities of Ethereum MEV. Today 5 mining pools are running its MEV-geth software, which in total account for >12% of the Ethereum hashrate.

    Miners running MEV-geth have seen an average increase in income of 0.13 ETH per block so far in March, which is also a ~3x increase MoM. In total, miners collected 174 ETH in Flashbots fees in February, up by more than 6x the amount collected in January.

  • Total extracted MEV (including non-Flashbot extracted MEV) has grown significantly. In January 2021 a total extracted MEV of $57M (47.6k ETH) was recorded, a year over year increase of 316x in absolute dollar amounts (43x in ETH).

  • Finally, the number of unique Searchers who have landed a bundle has continued to climb and is on track to increase 3x in March. Searchers are users that submit transactions to be prioritized through Flashbots. After the removal of API keys the growth of searchers is expected to accelerate.


② OpenSea

👥 Vishesh Choudhry

📈 OpenSea trading volume has increased 200x+ YoY

👉 Join the OpenSea community Discord

  • OpenSea’s daily trading volume in March 2020 was around $27k. As of March 2021, volume has risen to about $5.8M, an increase of 21,500%, showing an exponential rate of growth during the NFT-spring. Trading volume YTD is ~$200M, which would put it on pace to total ~$800M by the end of the year.

  • Since launch, the number of unique monthly active users has been steadily growing, as has monthly transaction (txn) volume. In Jan. 2021, this pace accelerated to over 30k users per month with ~1.3 txns per user per day. With the uptick in activity, median txn size also increased from ~$65 in Dec 2020 to ~$700 in Feb 2021.

  • Increased activity on OpenSea is partly due to new creators & sellers but also due to the resurgence in popularity of some older art/collectibles. In particular, CryptoPunks and Mooncats accounted for ~20k ETH in volume this past week. A handful of artists/collections have tended to dominate volume in 2021.


③ CryptoPunks

👥 Geebz

📈 CryptoPunks now a leading ‘bluechip’ NFT collectible

💰 Explore/buy/sell CryptoPunks

  • There are 10,000 punks and 1,834 unique wallets that hold punks, with 1,593 wallets owning 5 or less punks. The number of unique wallets has been steadily increasing as investors and collectors have realized the long-term value of owning a CryptoPunk.

  • The total value of punks sold over the last year was $192M. The forecast for the market if current conditions remain consistent has the following breakdown:

    • (a) Past month sales equaled around 1.8k punks

    • (b) Average floor sale price for the past month was ~20 Eth

    • (c) Total sales for the next 12 months at the floor price would be around $767M

    This doesn't factor in mid/high-grade punks, which would raise total sales to $1B+.

  • Since January 21st, the floor price for Punks has increased by 450% to ~22 Eth, with the # of Punks for sale increasing 70% to over 1,200. While some NFTs have seen their prices drop as supply increased or new projects emerged, CryptoPunks have been resilient to this trend. This is a primary case for Punks as a bluechip NFT.

Note: Punk Mafia contributed to this post as well with insights and edits.


④ Reflexer

👥 Stefan Ionescu

📈 RAI market cap soared to $140M+ in 4 weeks

👉 Join the Reflexer community Discord

  • In the first month post-launch, the RAI TVL soared to $350M+ and the RAI supply grew to 48M+. Currently there are more than 1K positions with RAI debt.

  • The PI controller managing RAI pulled its moving peg (aka redemption price) down in response to high market demand. The system found a new equilibrium around $3.014.

  • There are more than 1K positions with RAI debt and with an average collateralization ratio of 250%.


About the editorSpencer Noon 🕛 is an investor at Variant, a first-check crypto VC fund.

Our Network: Issue #62

Coverage on MakerDAO, Curve, Terra, and Alpha Finance.

Our Network is hiring—click here to see our current job openings.

This is issue #62 of the on-chain analytics newsletter that reaches nearly 10k crypto investors every week 📈

About the editor: Spencer Noon 🕛 is an investor at Variant, a first-check crypto VC fund.

✨ Together with our partners:
Image 2020-11-13 at 10.54.34 AM

1inch, whose v2 offers the best rates by discovering the most efficient swapping routes across all DEXes—swap on the customizable new UI. And also Aave, where you can experience DeFi: Deposit, Earn, & Borrow on Aave.


This week our contributor analysts cover DeFi: Alpha Finance, Terra, Maker, and Curve.

① Terra

👥 Christopher Heymann

📈 Stablecoin supply increases by 2000 %

👉 Join Terra Discord

💰 Stake your LUNA and earn transaction fees

  • Since the launch of Mirror in early December, Terra's overall stablecoin supply has increased by 2000%. The UST supply catapulted from a few thousand to almost 900 million in just 3.5 months, surpassing long-established stablecoins like Gemini Dollar, sUSD, TrueUSD, and Paxos along the way.

  • With such a dramatic increase in supply, the peg of any stablecoin comes under enormous pressure. That said, aside from a few days in early February where UST was trading at up to a 4% premium, Terra's stability mechanism returned UST to the peg quickly and gracefully.

  • Terra achieves stability by having LUNA absorb UST’s volatility. This means that it can be profitable for arbitrageurs to buy and burn LUNA to mint UST. Looking at the LUNA supply over the same time horizon as the UST supply increase shows that this mechanic has worked well so far.


② Alpha Finance

👥 Tascha

📈 Alpha Homora v1 has originated $2.29B+ in loans

💰 Lend ETH or open leveraged yield farming positions

  • Since launching in October 2020 (5 months ago), Alpha Homora has originated more than $2.29 Billion in loans (1.26M ETH). Loan origination is an important metric that correlates directly with the protocol fees collected, as fees are extracted based on borrow volume.

  • In November 2020, Alpha Homora was responsible for just 0.5% of the lending market share based on TVL. In Dec 2020, it gained 4%. In Jan 2021, it gained 8%, and in Feb 2021, it gained 12%. While TVL is important, TVL retention is crucial to understand product-market fit and the value the product brings to the market.

  • The ETH utilization rate on Alpha Homora is usually around 80-95% and the typical yield on ETH on Alpha Homora is 7-10%. Many protocols can attract supply through incentives, but utilization (% of the assets supplied that are borrowed) shows how sustainable it is to generate high yields to lenders.


③ MakerDAO

👥 Pierre-Yves Gendron

📈 Dai usage growing at 33% CMGR, MKR at ~28 P/E

👉 Join the Maker community Telegram

  • MKR monthly net income increased 1700% YoY to $6.6M. Based on current run rates, this implies an annualized net income of ~$80M ($97M-$17M core unit expenses) for a current P/E ~28. (Note: this figure excludes net PSM revenues, net liquidation revenues & assumes no growth.)

  • DAI is increasing its market share in the growing stablecoin market. DAI supply has increased at a compound monthly growth rate (CMGR) of 33% over the last twelve months, while the overall stablecoin market increased at a CMGR of 17%. Over that period, DAI market share increased from 3% to 7%.

  • Finally, although DAI represents only 7% of the overall stablecoin market, it accounted for 13.5% of all transfer volume in the past 30 days. DAI also has the highest velocity of all stablecoins, in part due to its smaller size.


④ Curve

👥 Michael Egorov

📈 Curve DAO earns more fees as DeFi grows

👉 Join the Curve community on Telegram

  • Curve DAO forwards 50% of all fees charged for swaps to participants in governance who lock CRV. The weekly amount of those fees grew up 3x in 3 months (on average).

  • The amount of CRV locked for governance (to be able to vote and receive the mentioned above admin fees) now exceeds 100 million CRV (~$200M).

  • Gini coefficient is used to measure the decentralization of voting power. For Curve, the coefficient is hovering around 0.83.


About the editor: Spencer Noon 🕛 is an investor at Variant, a first-check crypto VC fund.

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