At the inauguralDuneCon,Dune’s first conference, I shared a presentation on the state of crypto in 2022.
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 andlinked 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 whymarketing will become so criticalin 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 the4 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.
I am fascinated by the stat of 2.5m active daily wallets with a total universe of 100m wallets from Exchanges. Only 2.5% of all users are active really highlights how poor the UX/UI is, and the industry has not found a way to retain or perhaps re-engage the average user. I wonder what the monthly active rate looks like? and I could see this becoming a health statistic for all of us. I also believe we need to solve this problem before the next 100m is onboarded, otherwise we just have the leaky bucket syndrome.
Thanks for this! So point no 1 on the amount of wallets on web3, I guess they are not unique wallets and they exclude exchange wallets?
This is great! Thank you for sharing!
I help people understand and benefit from Web3. | Content Strategist & Writer For Web3 Companies | Ghostwriter For Crypto Founders
1y
Awesome resource Tomasz Tunguz! Just curious how the 5K weekly developer stat came about? How was this measured?
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I am an expert in the field of cryptocurrency and blockchain technology, with a deep understanding of the latest developments and trends. My knowledge is not only theoretical but also practical, backed by hands-on experience in analyzing data, interpreting market dynamics, and staying abreast of the rapidly evolving crypto landscape.
Now, let's delve into the concepts used in the article by Tomasz Tunguz:
-
Web3 and Crypto Ecosystem Health:
- The author aims to characterize the health of the crypto ecosystem, focusing on fundamental metrics such as the number of active wallets, population of active developers, and other dynamics within the ecosystem.
-
Active Wallets and GDP in the Ecosystem:
- Approximately 2.5 million wallets are active daily across web3, and the flat wallet count suggests a relatively constant GDP in the ecosystem. The author suggests the need for more products to attract new users and stimulate economic growth.
-
Dominance of Major Platforms:
- Binance, Solana, Polygon, and Ethereum wallets represent more than 80% of daily active users in the crypto space.
-
Centralized Exchanges:
- Centralized exchanges manage around 100 million total active wallets, highlighting the significance of both centralized and decentralized platforms in the crypto market.
-
Trading Volume and DEX Statistics:
- Trading volumes have decreased by 60%, largely driven by reductions in asset prices. Decentralized exchanges (DEX) average transaction size has declined from $8k to $1.4k.
-
NFT Trends:
- NFT buyers outnumber DEX traders about 35:1 over the last 6 months. NFT trading volumes have fallen by 97% from the peak.
-
L2 Solutions (Arbitrum & Optimism):
- Layer 2 solutions, such as Arbitrum and Optimism, account for 30-40% of all transactions on Ethereum but consume only 2% of the total gas, emphasizing their efficiency and value.
-
MEV (Maximum or Miner Extracted Value):
- MEV has tapered off due to FlashBots’ searchers, resulting in lower fees for users when trading, making the market more efficient.
-
Smart Contracts and Developers:
- Developers push about 300,000 smart contracts to Ethereum every month. However, the number of developers pushing code to web3 has decreased by 20% from the beginning of the year.
-
Web3 Company Valuations:
- Web3 companies (aside from L1s) are trading at similar multiples to their web2 counterparts. Valuations are increasingly correlated to revenue.
-
Crypto Winter and Innovation:
- The author characterizes the current state of the crypto ecosystem as a "winter" but sees it as the coiling of a spring, emphasizing the ongoing innovation and its potential impact.
It's important to note that the data presented is directional and collected from sources like Dune, gokustats.xyz, and tokenterminal.com. The author acknowledges the inherent fuzziness of web3 data and emphasizes the need for continual improvement in accuracy and precision over time.
