On-chain analytics to measure dApps performance

As the crypto-asset industry keeps maturing, usage and adoption metrics are progressively becoming more important than price and market capitalization indicators to compare assets between each other.

With the release of our top DeFi dashboard, Nyctale’s users now have the ability to deeply analyze the usage modalities of major assets in the DeFi area. As every project has its own history and development path, their specificities are well highlighted in our on-chain KPIs which drive our understanding regarding their respective growth potential.

During the last month, the DeFi market has experienced a bearish trend that is well displayed on our comparative dashboard through the monthly view, with negative growth rates for several on-chain metrics (such as the total number of wallets, the number of active wallets, and the overall on-chain volume). Major DeFi assets have reacted very differently to this new market condition:

  • As the exception that proves the rule, Aave had incredible growth in these troubling times, with the 3 on-chain indicators being up between 100% and 200%! But it might be mainly due to the migration phase from LEND to AAVE tokens.
  • Maker and Compound have also experienced an interesting growth in terms of active wallets (+70% and +100%), despite a decreasing on-chain volume (-20%  and -60%)
  • Chainlink, 0x, and Kyber have shown a nice resiliency, with most of their on-chain indicators being relatively stable.
  • But Uniswap, UMA, and BAT have been significantly affected, with a -60% to -80% decrease regarding their on-chain volume.

For a few days now, the DeFi market seems to have bounced back from its recent lows, well highlighted with the weekly view. We can once more retrace very different recovery efficiencies for the major DeFi tokens:

  • Aave and Uniswap have been the biggest gainers - especially, on-chain volume for Uniswap (+141.7%) and all major on-chain indicators for Aave saw high growth in the past week,
  • Compound and BAT’s on-chain volume also had quite an interesting increase - +50.1% and 67.1%, respectively,
  • Chainlink, Maker, UMA, and 0x are displaying reasonable growth - on-chain volume growth around or above 20%,
  • Kyber is the only one with a decreasing on-chain volume, pointing to the fact that this token did not recover the bearish month before.

Looking at these monthly and weekly indicators, Aave showed to be most resilient and had a better bounce back than some of the other top DeFi tokens. Compound also had a notable on-chain growth, while the other assets appear to be more sensitive to these turbulent periods.

A quick look at the daily growth rates provides new insights on the short-term DeFi growth potential, with UMA, Compound, and 0x experiencing an impressive on-chain volume increase (474%, 661%, 550% daily growth, respectively). Aave, Uniswap, and Maker also have quite positive metrics, while Chainlink, BAT, and Kyber land on the bottom of the chart in terms of daily growth.

These metrics might indicate that Aave and Compound are promising better/faster recovery, while Chainlink and Maker also appear as a ”safe bet”. Uniswap and UMA seem to be more uncertain (with negative monthly growth rates), while the situation might be less promising for 0x, Kyber, and BAT.

Digging deeper, let’s have a look at the detailed token dashboards for further analysis. An asset’s behavioral footprints can effectively infer the maturity level of the associated projects. The resiliency and growth capacity of these tokens are highly dependent on the structure of their investors’ community.

Aave and Compound: the leading decentralized neo-banks

During the last few weeks, Aave and Compound experienced strong growth in terms of on-chain engagement within their respective investor base. They are both characterized by significant growth in terms of the number of holders and incoming investors, in parallel with increasing speculative activity. While the price of these assets was decreasing, their investor community has been consolidating.

It’s also interesting to look at the evolution of their wealth concentration, as their respective evolution is totally different. In the case of Aave, we noticed a positive evolution of this indicator, with a decreasing concentration (more wallets hold 99% of the total supply). In the case of Compound, the wealth concentration is increasing (fewer wallets hold 99% of total supply), which could mean that existing investors keep consolidating their position during the recent price evolution. And Compound network is by far more centralized than Aave, with 0.06% of wallets holding 99% of COMP’s network value, and 4% of Aave’s overall community!

Aave charts

Investment behavioral groups, Aave network - Nyctale’s chart
Number of incoming investors, Aave network - Nyctale's chart
99%-wealth concentration, Aave network - Nyctale’s chart‌‌

Compound charts

Investment behavioral groups, Compound network - Nyctale's chart
Number of incoming investors, Compound network - Nyctale's chart
99%-wealth concentration, Compound network - Nyctale's chart

Looking at the behavioral footprint of these two assets, we can quickly identify the robustness of their investor communities and their continuous growth over the last few weeks and months. These communities are large with strong long-term investors growth.

In the end, Maker is the one that experienced stronger growth lately, with Chainlink following closely. But Maker is also the more centralized one, with 2% of wallets holding 99% of the network value, in comparison to 4% for Chainlink.

Investment behavioral groups, Chainlink network - Nyctale's chart
Number of incoming investors, Chainlink network - Nyctale's chart
99%-wealth concentration, Chainlink network - Nyctale's chart

Maker charts

Investment behavioral groups, Maker network - Nyctale's chart
Number of incoming investors, Maker network - Nyctale's chart
99%-wealth concentration, Maker network - Nyctale's chart

Uniswap and UMA: uncertain perspectives after a promising investor flow

With its initial airdrop, Uniswap has reached out to more than 250k wallets. However, only 40% of these have kept their freshly earned tokens, which is creating a very specific pattern in terms of investment behaviors. New wallets keep entering the network, but at a pace which doesn’t represent a significant growth due to the large initial airdrop.

Investment behavioral groups, Uniswap network - Nyctale's chart
Number of incoming investors, Uniswap network - Nyctale's chart

For different reasons, UMA is displaying a somewhat similar pattern. The network had a growth spike in September which ended with a more stabilizing period during the last few weeks, in parallel with its price decrease. The sudden activity spike in early September might have created a larger investor community looking for new growth drivers.

Investment behavioral groups, UMA network - Nyctale's chart
Number of incoming investors, UMA network - Nyctale's chart

The trends of the next few weeks might be of great importance to define a clearer growth pattern for the future.

0x, Kyber, and BAT: the DeFi elders looking for a second breath

These three old-established decentralized applications have slightly lost their previous growth dynamic all along the last few months, hitting a plateau in terms of investor size and activity. 0x and Kyber are notably challenged by the Uniswap success, and Brave browser might have reached a turning point on its early-development journey.

0x charts

Investment behavioral groups, 0x network - Nyctale's chart
Number of incoming investors, 0x network - Nyctale's chart

Kyber charts

Investment behavioral groups, Kyber network - Nyctale's chart
Number of incoming investors, Kyber network - Nyctale's chart

BAT charts

Investment behavioral groups, BAT network - Nyctale's chart
Number of incoming investors, BAT network - Nyctale's chart

Being a step ahead of the price volatility with on-chain metrics

Within the last few weeks and months, we had quite similar patterns for token price evolutions and trading volume around them. But when we look at on-chain metrics, we understand their investor communities are structured and acting in very different ways, inferring different levels of maturity and concrete usages for these networks. Looking at on-chain metrics regarding growth performance enables you to be a step ahead of the price volatility. Thanks to these sophisticated indicators, crypto-assets investors are able to make smart investment decisions, without letting the price volatility affect their decision process.