0xham3d.eth

Flow vs Other L1s — A cohort analysis

0xham3d@newsletter.paragraph.com (0xham3d.eth) — Fri, 26 May 2023 12:56:03 GMT

What is Retention?

User retention refers to the ongoing utilization of a product or feature. To assess overall retention, it is crucial to establish clear criteria for what constitutes user engagement, such as logging in, accessing a specific page, or performing essential actions. When measuring the retention of a particular feature, it is helpful to consider individuals who have used it at least once. The metrics used in this analysis aim to determine if the feature successfully retains these users. User retention is a reliable and unbiased measure of user behavior, making it a trustworthy and valid indicator.

Introduction

Cohort analysis is a powerful tool for measuring user retention by categorizing data into groups with shared characteristics before conducting analysis. It helps organizations isolate, analyze, and identify patterns in the user lifecycle, ultimately improving user retention and gaining a deeper understanding of user behavior within specific cohorts.

To better illustrate how cohort analysis works, let's consider an example from Bill Su:

Imagine you have a customer named Bob who discovered your online store four months ago when you offered a 50% discount. Bob browsed through your products and purchased a small trial set of avocado cosmetics [1].

As a business owner, you naturally wonder if customers like Bob return to your store as a result of their initial trial set purchase. To answer this question, you instruct your store attendant (named "Cookie") to track the behavior of customers similar to Bob and monitor whether they come back and make subsequent purchases, as well as the frequency of their returns.

In this scenario, the group of customers attracted by the 50% discount, including Bob, forms a cohort. The objective is to analyze whether these customers continue to revisit the store on a monthly basis.

Here's a real-world example of how cohort analysis can be used: Suppose you have an app, and you want to measure the number of users who initially launch the app and then revisit it within the next 10 days. By employing cohort analysis, you can track and analyze this specific behavior to gain insights into user retention and engagement patterns.

Cohort analysis enables businesses to assess the effectiveness of various acquisition strategies, evaluate the impact of specific events or promotions on user behavior, and make data-driven decisions to optimize user retention efforts.

Fig 1: Cohort Analyze Example

From the above retention table — Triangular chart, we can infer the following

1358 users launched an app on Jan 26. Day 1 retention was 31.1%, day 7 retention was 12.9%, and day 9 retention was 11.3%. So on the 7th day after using the app, 1 in 8 users who launched an app on Jan 26 were still active users on the app.
Out of all of the new users during this time range (13,487 users), 27% users are retained on day 1, 12.5% on day 7, and 12.1% on day 10.

Cohort Analyze in Blockchain

The blockchain industry boasts an abundance of blockchains and decentralized applications (dApps). Nowadays, with the prevalence of EVM compatible Layer 1 (L1) blockchains, one can observe the widespread deployment of similar dApps across multiple platforms. Consequently, the growth of an L1 blockchain is contingent not only upon attracting users but also on their sustained retention month after month. To achieve continuous expansion and success, L1 blockchains must prioritize strategies that focus on retaining users throughout extended periods.

Methodology

What is a cohort? — In this analysis, I’m considering the users who joined in a particular month (i.e. the month in which the first transaction was done) as part of the same cohort. Then, I calculate how many of these users are transacting again in the next months.

What does the cohort size show? — The cohort size for each month shows how many new users joined that L1 in that month.

How to read the tables? — To read the tables, start with the month name in the “Cohort” column and then add the month number in the “Month 1, 2, 3 …” columns. E.g. Cohort of April ‘22 will have June ’22 as Month 2.

Flow

Let's dive into the data for Flow, specifically focusing on the period starting from January 2022, as captured in Flipside's tables.

In January, an analysis reveals that 37% of the users from that cohort continued to use Flow in February. However, as we progress beyond February, the retention rate experiences a decline, dropping to 29%. This downward trend persists, and by the end of 12 months, only 12% of the initial users from January remain actively engaged with the platform.
Shifting our attention to the February cohort, we observe a similar pattern. Only 60% of the users from this cohort were retained in the subsequent month, with the retention rate dwindling to a mere 12% after 12 months.
June was a weird month for Flow, so that five months later, 80% of users returned to Flow, while one month later, only 1% of them stayed with Flow.
In November, something changed, while a huge number of new users came to Flow, only one percent of them came from the previous month.

These findings highlight a significant decrease in user retention for both cohorts as time progresses.

Fig 2: Flow User Retention

Ethereum

Let's shift our focus to Ethereum and explore a similar time period as we did with Flow.

The January cohort stands out as the largest, comprising 5.4 million wallets. Over the course of 12 months, the cohort remains relatively stable, with approximately 5.1 million wallets still active from the January cohort.
When it comes to retention rates, Ethereum demonstrates a lower level compared to Flow. In the first two months, only 33% of the January and February cohorts are retained. By the sixth month, the retention rate drops to nearly 19%, and after 12 months, it reaches 10%.
As we examine the March cohort, the retention rate declines further to 12% in the ninth month and eventually settles in the high single digits in the subsequent months.

While Ethereum's initial retention is a little lower compared to Flow, the retention levels has experienced lower volatility. This suggests that Ethereum faces challenges in retaining users over the long term and may need to focus on strategies to improve user engagement and retention beyond the initial months.

Fig 3: Ethereum User Retention

Avalanche

Let's dive into the data for Avalanche, similarly focusing on the period starting from January 2022.

In January, an analysis reveals that 45% of the users from that cohort continued to use Avalanche in February. However, as we progress beyond February, the retention rate experiences a decline, dropping to 34%. This downward trend persists, and by the end of 12 months, only 9% of the initial users from January remain actively engaged with the platform.
Shifting our attention to the February cohort, we observe a similar pattern. Only 47% of the users from this cohort were retained in the subsequent month, with the retention rate dwindling to a mere 10% after 12 months.

Although these findings highlight a significant decrease in user retention for both cohorts as time progresses in Avalanche, in comparison with Flow, its retention rate is so much better and its users are more loyal than Flow users.

Fig 4: Avalanche User Retention

Polygon

Now let's turn our attention to Polygon and examine the same time period starting from 2022. As we analyze the data, several noteworthy observations emerge:

In the cohort table's first row, we notice that the monthly cohort sizes for Polygon are considerably smaller compared to Ethereum.
However, what stands out is the significantly higher user retention for Polygon in the subsequent months. For instance, in the second month, the retention rate for the February '22 cohort is 45%, surpassing Ethereum's 33%. Moreover, the retention rate from February to March is nearly twice as high as Ethereum's and slightly lower than Avalanche's, demonstrating a strong retention trend.

These findings indicate that while the initial cohort sizes for Polygon may be smaller than Flow and Ethereum, Polygon exhibits higher user retention rates in the following months. This suggests a potentially more engaged and loyal user base on the Polygon network, which could be attributed to factors such as improved user experience, unique features, or targeted user acquisition strategies.

Fig 5: Polygon User Retention

Cosmos

Finally we looked at Cosmos user retention over the same period time:

In the cohort table's all row, we notice that the monthly cohort sizes for Cosmos are considerably higher compared to all above chains.
However, what stands out is the significantly higher user retention for Cosmos in the consecutive months. For instance, in the second month, the retention rate for the February '22 cohort is 58%, surpassing all Polygon’s 45%, Avalanche's 47% and Ethereum's 33%. Moreover, the retention rate from February to March is over twice as high as Ethereum's and significantly lower than Flow's, demonstrating a strong retention trend.

These findings indicate that while the initial cohort sizes for Cosmos may be smaller than Flow in some few months, Cosmos exhibits significantly higher user retention rates in the following months. This suggests a potentially more engaged and loyal user base on the Cosmos network, which could be attributed to factors such as improved user experience, unique features, or Inter-Blockchain Communication (IBC) and targeted user acquisition strategies.

Fig 6: Cosmos User Retention

Conclusion

Based on the provided information, let's compare Flow's user retention rates with the other assessed blockchains:

Ethereum: Flow's user retention rates appear to be lower than Ethereum. While both platforms experience a decline in retention over time, Ethereum's retention rates are relatively higher at each milestone. Flow may need to focus on improving user engagement and retention efforts to match Ethereum's performance.
Avalanche: Flow's user retention rates are lower than Avalanche. Avalanche demonstrates higher retention rates in the subsequent months compared to Flow. Avalanche's users appear to be more loyal and engaged with the platform. Flow could benefit from studying Avalanche's retention strategies to improve its own user retention.
Polygon: Flow's user retention rates are lower than Polygon. Despite starting with smaller cohort sizes, Polygon exhibits higher retention rates in the following months. Polygon's users show stronger engagement and loyalty. Flow could explore the factors contributing to Polygon's success and implement similar strategies to enhance its user retention.
Cosmos: Flow's user retention rates are lower than Cosmos. Cosmos demonstrates significantly higher retention rates compared to Flow. Cosmos attracts larger cohort sizes and exhibits strong retention trends. Flow could analyze Cosmos' strategies and user experience to improve its own retention efforts.

In comparison to the assessed blockchains, Flow's user retention rates appear to be relatively lower. Flow may need to focus on implementing effective user engagement and retention strategies to enhance its user loyalty and retention rates. By learning from the success of Ethereum, Avalanche, Polygon, and Cosmos, Flow can aim to improve its retention metrics and foster long-term user engagement on its platform.

key takeaways

Retention Variation: The analyzed blockchains, including Flow, Ethereum, Avalanche, Polygon, and Cosmos, exhibit varying levels of user retention over time. Each blockchain platform has its own strengths and challenges in retaining users beyond the initial months.
Flow's Challenges: Flow, in particular, faces challenges in retaining users over the long term. The retention rates for Flow cohorts decline steadily over time, indicating a need for improved user engagement and retention strategies.
Ethereum's Moderate Retention: Ethereum demonstrates moderate user retention rates compared to the other blockchains assessed. While its initial retention may be lower than some, it experiences relatively stable retention levels over the 12-month period.
Avalanche's Better Retention: Avalanche showcases better user retention rates compared to Flow and Ethereum. Although there is a decline in retention over time, Avalanche retains a higher percentage of users at each milestone, indicating a more engaged and loyal user base.
Polygon's Strong Retention Trend: Polygon exhibits strong retention trends, surpassing Ethereum's retention rates. Despite smaller cohort sizes initially, Polygon shows higher user retention in the subsequent months, suggesting a more engaged and loyal user base.
Cosmos' High Retention: Cosmos stands out with significantly higher user retention rates compared to all the assessed blockchains. It retains a larger percentage of users in the consecutive months, indicating a highly engaged and loyal user base.
Importance of User Engagement: The findings emphasize the importance of effective user engagement and retention strategies for blockchain platforms. Building a loyal and engaged user base is crucial for long-term success and growth.

References:

https://tsharon.medium.com/measuring-user-retention-a2f937234b99

https://medium.com/analytics-for-humans/what-is-cohort-analysis-and-how-should-i-use-it-3ac7c39c50dd

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Avalanche vs Other L1s — A cohort analysis

0xham3d@newsletter.paragraph.com (0xham3d.eth) — Wed, 17 May 2023 17:35:48 GMT

What is Retention?

Introduction

To better illustrate how cohort analysis works, let's consider an example from Bill Su:

Fig 1: Cohort Analyze Example

From the above retention table — Triangular chart, we can infer the following

1358 users launched an app on Jan 26. Day 1 retention was 31.1%, day 7 retention was 12.9%, and day 9 retention was 11.3%. So on the 7th day after using the app, 1 in 8 users who launched an app on Jan 26 were still active users on the app.
Out of all of the new users during this time range (13,487 users), 27% users are retained on day 1, 12.5% on day 7, and 12.1% on day 10.

Cohort Analysis in Blockchains

Methodology

What does the cohort size show? — The cohort size for each month shows how many new users joined that L1 in that month.

Avalanche

Let's dive into the data for Avalanche, specifically focusing on the period starting from January 2022, as captured in Flipside's tables.

In January, an analysis reveals that 45% of the users from that cohort continued to use Avalanche in February. However, as we progress beyond February, the retention rate experiences a decline, dropping to 34%. This downward trend persists, and by the end of 12 months, only 9% of the initial users from January remain actively engaged with the platform.
Shifting our attention to the February cohort, we observe a similar pattern. Only 47% of the users from this cohort were retained in the subsequent month, with the retention rate dwindling to a mere 10% after 12 months.

These findings highlight a significant decrease in user retention for both cohorts as time progresses.

Fig 2: Avalanche User Retention

Ethereum

Let's shift our focus to Ethereum and explore a similar time period as we did with Avalanche.

The January cohort stands out as the largest, comprising 5.4 million wallets. Over the course of 12 months, the cohort remains relatively stable, with approximately 5.1 million wallets still active from the January cohort.
When it comes to retention rates, Ethereum demonstrates a lower level compared to Avalanche. In the first two months, only 33% of the January and February cohorts are retained. By the sixth month, the retention rate drops to nearly 19%, and after 12 months, it reaches 10%.
As we examine the March cohort, the retention rate declines further to 12% in the ninth month and eventually settles in the high single digits in the subsequent months.

While Ethereum's initial retention is a little lower compared to Avalanche, the retention levels after 12 months are surprisingly similar. This suggests that Ethereum faces challenges in retaining users over the long term and may need to focus on strategies to improve user engagement and retention beyond the initial months.

Fig 3: Ethereum User Retention

Polygon

Now let's turn our attention to Polygon and examine the same time period starting from 2022. As we analyze the data, several noteworthy observations emerge:

In the cohort table's first row, we notice that the monthly cohort sizes for Polygon are considerably smaller compared to Ethereum.
However, what stands out is the significantly higher user retention for Polygon in the subsequent months. For instance, in the second month, the retention rate for the February '22 cohort is 45%, surpassing both Avalanche's 47% and Ethereum's 33%. Moreover, the retention rate from February to March is nearly twice as high as Ethereum's and slightly lower than Avalanche's, demonstrating a strong retention trend.

These findings indicate that while the initial cohort sizes for Polygon may be smaller than Ethereum, Polygon exhibits higher user retention rates in the following months. This suggests a potentially more engaged and loyal user base on the Polygon network, which could be attributed to factors such as improved user experience, unique features, or targeted user acquisition strategies.

Fig 4: Polygon User Retention

Arbitrum

Arbitrum stands out as another blockchain network that exhibits higher user retention rates compared to Avalanche and the other assessed chains. This elevated retention can be attributed to a few factors, such as lower gas fees and the presence of an airdrop, which likely contribute to the increased user engagement and loyalty.

For instance, in the first month, Arbitrum showcases a 52% retention rate for the January '22 cohort, surpassing both Avalanche's 47% and Ethereum's 33%. In the second month, the retention rate from February to March is nearly twice as high as Ethereum's and approximately 1.5 times higher than Avalanche's.
While Arbitrum initially shows similar retention rates to Avalanche in the first months, its retention rate after 12 months remains significantly higher at 48% compared to Avalanche's 9%. This highlights Arbitrum's ability to retain a larger portion of its user base over an extended period.

The combination of lower gas fees and the impact of the airdrop likely play a crucial role in attracting and retaining users on the Arbitrum network. These factors contribute to its strong performance in terms of user retention, positioning it as a competitive player in the blockchain landscape.

Fig 5: Arbitrum User Retention

Retention Rate

Retention rate is the percentage of users who continue to use a product or feature over a given period of time. To calculate the retention rate, two numbers are required: the initial number of users at the beginning of the time frame and the number of users who remain active at the end of that time frame. The retention rate is obtained by dividing the latter by the former. For instance, if you had 100 users on July 1 and by August 1, 94 of them were still using the product or feature, then the retention rate would be 94%. In this example, the churn rate would be 6%, representing the proportion of users who have stopped using the product during that period. It's important to note that any new users who join during the time frame are excluded from the retention rate calculation for that specific period.

Fig 6: Avalanche - User Retention Rate

Fig 7: Ethereum - User Retention Rate

Fig 8: Polygon - User Retention Rate

Fig 9: Arbitrum - User Retention Rate

The analysis of the presented data suggests that the majority of users across the assessed chains do not exhibit sustained and frequent interaction with the networks over an extended period of time. A notable pattern is that the largest group of users tends to retain their engagement with the chains for only a week, with the number of users retaining for longer durations gradually decreasing.

Several factors could contribute to this trend. It is possible that the chains lack compelling features or incentive programs to actively engage and retain users over a long-term basis. Additionally, it could indicate that the target audience for these networks primarily seeks short-term interactions rather than long-term commitment and utilization of the chains.

To address this issue and improve user retention, further analysis and research are crucial. Understanding user behavior and preferences more comprehensively can help identify specific areas for improvement and opportunities to enhance user engagement on networks such as Avalanche and others. By implementing strategies that cater to the needs and desires of users, the chains can work towards increasing retention and fostering a more active and dedicated user base.

Conclusion

In comparison to the other assessed chains, Avalanche exhibits varying conditions in terms of user retention. When comparing retention rates over the course of several months, Avalanche generally shows lower retention rates than Ethereum and Arbitrum but higher retention rates than Polygon.

Avalanche's retention rates tend to decline over time, with a significant drop observed after 12 months. The retention rate after a year is considerably lower for Avalanche compared to Ethereum and Arbitrum.

However, it is important to note that the specific factors influencing user retention on Avalanche and other chains may vary. For example, Ethereum's lower gas fees and the presence of an airdrop on Arbitrum may contribute to their higher retention rates in comparison.

To improve user retention, Avalanche may benefit from strategies aimed at increasing long-term engagement, such as introducing engaging features, optimizing user experience, or implementing incentive programs. By focusing on enhancing user retention, Avalanche can strive to attract and retain a more dedicated and active user base in the competitive blockchain landscape.

Key Takeaway:

User retention rates vary across the assessed blockchain networks, with Avalanche generally showing lower retention compared to Ethereum, Arbitrum, and Polygon. This indicates the need for Avalanche to focus on improving long-term user engagement and retention.
Ethereum demonstrates relatively higher user retention compared to other chains, which may be attributed to factors such as lower gas fees and a more established user base. Learning from Ethereum's success can help inform retention strategies for other networks.
Arbitrum stands out with higher user retention rates, potentially influenced by lower gas fees and the impact of airdrops. This highlights the importance of incentivizing and rewarding users to encourage sustained engagement.
Polygon exhibits significant user retention, positioning it as a success story among the assessed chains. Identifying the factors contributing to Polygon's retention can provide valuable insights for other networks striving to improve user engagement.
Understanding cohort analysis is crucial for evaluating user retention over time. Comparing cohort sizes and retention rates among different chains allows for a better understanding of user behavior and can guide decision-making in retention strategies.
Continuous analysis and adaptation to user needs are essential for improving user retention in the blockchain space. By understanding user preferences, implementing effective engagement features, and optimizing the user experience, blockchain networks can foster a loyal and active user base, driving sustained growth and success.

Refences:

https://tsharon.medium.com/measuring-user-retention-a2f937234b99

https://medium.com/analytics-for-humans/what-is-cohort-analysis-and-how-should-i-use-it-3ac7c39c50dd

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Bitcoin Affected by the Conflict between Russia and Ukraine

0xham3d@newsletter.paragraph.com (0xham3d.eth) — Mon, 27 Mar 2023 14:05:04 GMT

Preamble

Welcome to our dashboard, which aims to provide a comprehensive analysis of the impact of the ongoing conflict between Russia and Ukraine on the global economy, with a specific focus on Bitcoin as a major cryptocurrency index. As analysts, we recognize the importance of staying informed about current events and how they can affect the global economy.

In recent years, the ongoing conflict between Russia and Ukraine has been one of the most worrying things going on.So, we decided to make this dashboard to learn more about how this war is affecting the global economy, especially when it comes to cryptocurrencies.

Our dashboard will evaluate weekly transactions, unique active and new users, volume changes, and other relevant economic indicators affected by this conflict since 2021 and compare them before and after the war event. We aim to provide insights that will help investors and decision-makers navigate this complex economic landscape with greater confidence and understanding.

BTC Price Change

Price Changes

Once upon a time, when the Russian-Ukrainian war began, investors found themselves at a crossroads. They were looking for safe havens to protect their investments from the potential economic implications of this terrible event.

Many investors turned to Bitcoin as their refuge. They saw the decentralized nature of cryptocurrency as a shield against the volatility of traditional markets. So, they decided to invest in BTC, and their faith in this digital asset was soon rewarded.

In the next month after the beginning of the war on February 24th, 2022, the price of BTC surged from 37 to 48K, an increase of roughly 30%. The investors were ecstatic with the gains they had made, and many were convinced that they had made the right decision to invest in Bitcoin.

However, their happiness was short-lived. Despite the initial price surge, the value of Bitcoin began to plummet just three months later. The price dropped below $20,000, wiping out much of the gains that the investors had made earlier.

The investors who had put their trust in BTC were left wondering what went wrong. Was Bitcoin not the safe haven they thought it was? Had they made a mistake by investing in it? These were the questions that haunted them as they struggled to come to terms with their losses.

Despite the rollercoaster ride that Bitcoin had taken them on, the investors did not give up on it completely. They knew that cryptocurrency was still a valuable asset, and they believed that its potential for growth and stability would continue to make it an attractive investment option in the future.

Network’s Traffic

The visualizations below give a fascinating look at how much traffic there has been on the Bitcoin network since 2021, broken down by week and by the important war event that happened on February 24, 2022.

The charts show that the war event had an impact on the price of Bitcoin, which saw a significant increase right after the event and then dropped below pre-war levels over the ensuing months. However, it is worth noting that the number of weekly active users on the Bitcoin network continued to rise steadily, with only a slight dip immediately after the war event.

Also, the number of weekly transactions on the Bitcoin network stayed pretty stable and, in the weeks after the war, even went up in a smooth way.However, this upward trend in transaction counts slowed down towards the end of 2022 before picking up again in early 2023.

The data represented by these charts suggests that, despite the fluctuations in Bitcoin price, the network's usage continued to grow over the period, demonstrating the resilience of the cryptocurrency's underlying technology. It will be interesting to monitor the traffic on the Bitcoin network in the future to see how these trends continue to develop.

Active Users & Transactions Count

The data also shows an interesting trend in the average transferred volume on the Bitcoin network after the war event. Just two weeks after the beginning of the war, the average transferred volume surged dramatically. However, this surge was short-lived, and the volume quickly dropped to below pre-war levels. In fact, the average amount of BTC transferred each week after the war was always less than the lowest amount recorded before the war, which was less than 5,000 BTC. This big drop in volume transferred shows that the war had a big effect on how people used Bitcoin's network, at least in terms of volume transferred.

Average Transferred Volume

Even though the amount of money being transferred went down, the number of people using the Bitcoin network kept going up. This suggests that while the war event had a negative impact on the volume of Bitcoin transferred, it did not significantly affect the overall usage of the network by individual users. In the world of cryptocurrencies, these trends show how complicated the relationship is between global events, market sentiment, and network use. It will be interesting to see how these trends evolve in the future, particularly as the global economic and political landscape continues to shift and evolve.

Transferred Volume

Security Budget Overview

The term "security budget issue" in the context of the Bitcoin blockchain refers to the decreasing percentage of the total miner revenue that is allocated to securing the network over time. This percentage, measured as miner revenue divided by market cap, is a crucial metric in assessing the disincentive for attacking the network.

The security budget is measured in relative terms (i.e. miner revenue / market cap, whereby miner revenue = block reward + transaction fees).

In the current research, we only measured transaction fees and block rewards because of the short-term evaluation.

The graphs that show how much money the network made in fees give an interesting look at how well the network is doing. As the data shows, the network's generated fees had been declining since the second half of 2021. However, after the war event in February 2022, the generated fees began to increase again.

This increase in generated fees indicates that the network's traffic has also increased, as users are willing to pay more for their transactions to be processed more quickly. It is worth noting that this increase in generated fees was a gradual and steady trend, indicating the growth of the network's traffic and its continued relevance in the cryptocurrency world.

Overall, these trends show that the Bitcoin network is still active and important, despite the problems and changes in the cryptocurrency market. It will be interesting to see how the network evolves in response to future global events and shifts in the cryptocurrency landscape.

Fees Generate Over Time

Distributed Rewards in BTC & $USD

Swapping Overview

The following visuals provide an overview of swaps metrics over these two time periods.

Selling vs. Buying Transactions Count

The data also shows interesting patterns in the Bitcoin network's swap transactions, which were affected by the war.Two weeks after the war, the number of swap transactions went up a lot, which shows that more people want to trade cryptocurrencies.However, this surge was short-lived, and swap transactions began to decrease rapidly until the beginning of 2023.

During this period, the selling/buying swapped volume and unique swappers count followed a similar pattern, declining along with swap transactions. However, towards the end of 2022, all of these indicators began to increase again, indicating a resurgence in demand for swap transactions and a growing interest in cryptocurrency exchange.

These fluctuations in the swap transactions and related indicators demonstrate the dynamic and ever-changing nature of the cryptocurrency market, which can be impacted by a range of external factors, including global events and shifts in investor sentiment. As the market continues to evolve, it will be interesting to see how these trends develop and what new patterns emerge in the swap transactions and other key indicators of the Bitcoin network.

Selling vs. Buying Volume

Active Sellers vs. Buyers

It is worth noting that a significant portion of Bitcoin holders had zero balance on the dates before and after the war event, with approximately 143.8M BTC transferred through empty wallets before the war and 153.2M BTC transferred through empty wallets after the war. This suggests that many users were actively moving their Bitcoin holdings around during this time, possibly to take advantage of market fluctuations or to safeguard their funds.

The movement of funds during this time is not surprising, as global events and market conditions can have a significant impact on the value and stability of cryptocurrencies. Bitcoin's decentralized and transparent nature makes it a popular choice for those seeking to move their funds quickly and efficiently in response to market changes.

It is important to note that while the movement of funds during this time may have been driven by market conditions, it also demonstrates the power and potential of cryptocurrencies as a tool for individuals seeking to transact and hold value securely and efficiently. As the cryptocurrency market continues to evolve and mature, it will be interesting to see how these trends and behaviors develop over time.

New Users

In addition to the previous metrics, it is also worth looking at the influx of new users to the Bitcoin network during the two assessed periods. Surprisingly, the data shows that the war event did not have a significant impact on the number of new users entering the network.

As shown in the chart, there was a significant increase in new users joining the Bitcoin network prior to the war event, which remained relatively stable throughout the post-war period. This indicates that despite the uncertain global situation and the impact it had on the cryptocurrency market, interest in Bitcoin remained high among newcomers, who saw the potential value and benefits of joining the network.

Overall, the data highlights the resilience of the Bitcoin network and its users in the face of external events and market fluctuations. Despite the impact of the war event on other metrics such as price, transfer volume, and swap transactions, the network's traffic and interest remained stable and even continued to grow in some areas. This demonstrates the robustness and potential of the Bitcoin network as a tool for investors and individuals seeking to transact with cryptocurrencies.

New User Count

Conclusion

In conclusion, the data shows that the Russian-Ukrainian war event had a significant impact on various metrics related to the Bitcoin network. While the price of Bitcoin initially surged after the war event, it later dropped to below pre-war levels. However, the network's traffic remained stable and even increased in some areas, indicating its resilience to external events and market fluctuations.

Moreover, the movement of funds during this time highlights the potential of cryptocurrencies as a tool for individuals seeking to transact and hold value securely and efficiently, even in times of uncertainty and global turmoil.

Overall, the data suggests that the Bitcoin network remains an important and valuable asset for investors and individuals seeking to transact with cryptocurrencies. As the market continues to evolve and mature, it will be interesting to see how these trends and behaviors develop and shape the future of cryptocurrencies.

Definitions:

Bitcoin Price: The value of one Bitcoin, typically measured in a fiat currency such as US dollars.
Weekly Transactions: The number of transactions made on the Bitcoin network during a given week.
Weekly Active Users: The number of unique users who made at least one transaction on the Bitcoin network during a given week.
Average Transferred Volume: The average amount of Bitcoin transferred in each transaction during a given week.
Network Fees: The fees paid by users to process transactions on the Bitcoin network. These fees are paid to miners who verify and add transactions to the blockchain.
Swapped Volume: The amount of Bitcoin being bought and sold on decentralized exchanges (DEXs) or other trading platforms.
Unique Swappers: The number of unique users participating in the buying and selling of Bitcoin on DEXs or other trading platforms.
Newcomers: The number of new users joining the Bitcoin network during a given period of time.

This dashboard has been made for MetricDAO’s bounty by geniidata’s atabase.

References:

https://redot.com/blog/the-effect-of-the-russian-ukraine-war-on-cryptocurrency-and-vice-versa/

BTC in Two Events (FTX & SVB)

0xham3d@newsletter.paragraph.com (0xham3d.eth) — Mon, 13 Mar 2023 13:45:46 GMT

Introduction

Welcome to the On-Chain Analytics Dashboard for the Bitcoin Blockchain! This dashboard provides a comprehensive overview of the overall activity on the Bitcoin network, with a special focus on the effects of FTX and SVB bankruptcy. You'll be able to track the sentiments of bitcoin's community. Additionally, you can see the total fees spent affected by these events and get a clear picture of the users behaving on the Bitcoin blockchain. This dashboard gives you a visionary from effects of major economical events on cryptocurrency specially BTC to make a stronger risk management in the future.

Background

On November’s second week in 2022, FTX, a cryptocurrency exchange, had a technical problem that caused the prices of some tokens, like bitcoin, to drop sharply. This caused panic selling and led to widespread losses among traders. The incident raised concerns about the reliability of cryptocurrency exchanges and the need for better risk management.

Four months later, Silicon Valley Bank (SVB), the premier financial institution for Silicon Valley tech startups for the past 40 years, was shut down by US federal regulators. This sent shockwaves through the tech industry and raised concerns about whether companies would be able to get their money back and pay their employees.

The effects of these events on the cryptocurrency market were significant. Bitcoin's price dropped sharply in response to the FTX incident, and the depegging of USDC caused fear and panic among stablecoin users. However, efforts by individuals and companies to recover USDC's lost value have led to a partial recovery of its price.

Overall, these events highlight the need for better risk management and regulation in the cryptocurrency industry. Stablecoins and reliable exchanges are important for the growth and use of cryptocurrencies, and events like these can make investors less confident and slow down progress.

BTC daily average price affected by FTX and SVB bankruptcy

What are we going to look at?

In the current research, we are going to take a look at the following metrics since one month before FTX’s demise in November 2022, to date (March 2023).

Daily transactions and active unique Users counts.
Daily transferred volume and paid fee.
Daily swapped volume from/to in event’s date.
Top 10 assets swapped from/to BTC in event’s date.

Analysis

In all of the following visuals, the highlighted zones refer to one week before and one week after the events.

From November 1 to 15 in 2022 for FTX and March 5 to date for SVB.

Transfer Overview

Daily BTC transferred transaction and unique transferrer count

Over the past five months, there has been an increase in the number of Bitcoin transactions, but the number of active users has remained steady. However, the demise of FTX and SVB has had a noticeable impact on these metrics. After a spike on November 7th and March 11th, the dates of FTX and SVB's downfall, both the daily transaction count and active unique user counts on the Bitcoin blockchain dropped. The 7-day moving averages of these metrics also reflected this trend.

Overall, it appears that while the number of transactions is on the rise, the number of active users hasn't followed suit, and recent events have played a role in shaping these metrics.

7 days moving averages of transactions and active users

While the impact of events on the transaction and active user counts on the Bitcoin blockchain was not entirely clear, the effects on transfer volume are more apparent. The charts reveal that the demise of FTX had a much more significant impact on transferred volume than the demise of SVB.

The transferred volume affected by FTX's event increased to over two times higher than before the event, only to experience a significant drop to below one third after a few days. Conversely, the SVB's event had little impact on transferred volume.

This could be because FTX was directly related to cryptocurrency, while SVB was a bank and investor in fintech, but not directly related to cryptocurrency.

Daily Transferred Volume in BTC and $USD

Daily Average Transferred Volume in BTC and $USD

Security Budget (BTC & $USD) Overview

The security budget is measured in relative terms (i.e. miner revenue / market cap, whereby miner revenue = block reward + transaction fees).

In the current research, we only measured transaction fees and block rewards because of the short-term evaluation.

Daily transactions fees in BTC & $USD

The events of FTX and SVB had a significant impact on the transaction fees of Bitcoin. Though the daily average transaction fees were already increasing, the effects of the events were much higher due to market panic and increased network traffic.

The impact of SVB on average fees was much greater than FTX, which is contrary to the effects seen on transferred volume. The chart below indicates that block rewards decreased significantly because of FTX's event, while SVB's bankruptcy had a lower impact.

Daily Block Reward $USD

The average block reward in BTC is 6.25 per each block, which remains constant until 2024, and it will decrease to 3.125 after the next halving in 2024.

Swapping Overview

The following visuals have dedicated to swapping volume since one month before FTX’s demise to date (March 12th, 2023).

BTC Swapped Volume(BTC & $USD) to/from Other Assets

BTC Swap Transaction Counts

BTC Unique Swapper Counts

The charts presented above provide an insight into the impact of recent events on swap metrics. As evident from the charts, the events have had a substantial effect on these metrics. The charts show a sharp increase in swap transactions, active unique buyers, and sellers after the occurrence of the events.

This surge in swap activity is likely due to market participants reacting to the events and seeking to adjust their positions accordingly. The increase in swap transactions is indicative of higher trading activity, as market participants rush to take advantage of potential opportunities or mitigate risks.

Moreover, the rise in active unique buyers and sellers is reflective of greater market participation, as more market participants enter or exit their positions. This is likely due to the increased volatility and uncertainty caused by the events, which may have prompted more market participants to actively trade in order to capitalize on market movements or to safeguard their positions.

Top 10 Assets Swapped From/To BTC in the Events Dates

The following charts represent the top 10 most popular assets on Ethereum blockchain, based on swapped volume that swapped in FTX and SVB events on November 7th and March 11th, respectively.

Top 10 most volume assets swapped from BTC

Top 10 most volume(in BTC) assets swapped from BTC

Top 10 most volume(in $USD) assets swapped from BTC

Top 10 most volume assets swapped to BTC

Top 10 most volume(in BTC) assets swapped to BTC

Top 10 most volume(in $USD) assets swapped to BTC

The charts presented earlier showed that the most swapped assets during the events were WETH and WBTC. Additionally, the following graphs give an overview of BTC balances held by users with the most input/output volume during the events.

Interestingly, the largest group of BTC holders on these dates had zero balance, with approximately 600,000 BTC for FTX's date and 664,000 BTC for SVB's date. This suggests that a large number of users were actively moving their BTC holdings around during these events, possibly in an effort to take advantage of market fluctuations or to ensure the safety of their funds.

Conclusion

Based on the findings presented above, it can be concluded that the bankruptcy of SVB and the FTX event had significant impacts on the cryptocurrency market, particularly on swap metrics and transaction fees. The average transaction fees increased due to both events, but the block rewards decreased significantly due to FTX’s event. WETH to WBTC and vice versa were the most swapped assets by traders during these events. The largest group of BTC holders during these dates belonged to those who had zero balance.

Overall, these events highlight the importance of understanding market trends and events that may impact the cryptocurrency industry. It is important for traders and investors to stay informed and up-to-date with the latest news and developments to make informed decisions and mitigate potential risks.

Methodology

In conducting the analysis, we used specific tables and conditions to retrieve relevant data. To obtain information on bitcoin blockchain, we employed the bitcoin.blocks, models.fact_dex_trades and bitcoin.transactions table and calculate the total and averages key metrics.

We distinguished events dates by one week before and one week after the FTX’s demise and one week before of the SVB’s bankruptcy to end during the period of one month before FTX’s event to date (March 13th, 2023).

Definitions

Security budget: The amount of resources dedicated to securing a blockchain network from potential attacks. It is measured in relative terms by comparing miner revenue (block rewards and transaction fees) to the network's market capitalization.
Miner revenue: The total amount of compensation received by miners for verifying and adding transactions to the blockchain. It consists of the block reward and transaction fees.
Market capitalization: The total value of all the coins or tokens in circulation for a given blockchain network. It is calculated by multiplying the current price of a single unit of the cryptocurrency by the total number of units in circulation.
Halving: A programmed reduction in the block reward given to miners in a blockchain network that occurs approximately every four years. This reduces the rate at which new coins are created, and helps to prevent inflation.
Swap: The act of exchanging one cryptocurrency for another.
Input/output volume: The amount of cryptocurrency that is sent or received in a transaction.
BTC balance: The amount of Bitcoin held by a user in their wallet.

This dashboard has been made for MetricDAO’s bounty by geniidata’s atabase.

Queries and Graphs: Link

References:

https://randerson112358.medium.com/the-collapse-of-institutions-8c68bd7a930c

https://www.investopedia.com/what-went-wrong-with-ftx-6828447

https://dune.com/niksaf/btc

Optimism Airdrop Receivers Activities (✨🔴_🔴✨)

0xham3d@newsletter.paragraph.com (0xham3d.eth) — Mon, 20 Feb 2023 21:02:06 GMT

Introduction

In May 2022, Optimism initiated its first airdrop and distributed more than 200 million OP tokens to reward early adopters and active users. As the governance system, Token House, matured, 88,000 addresses voted on proposals to distribute 55 million OP tokens and upgrade the protocol.

Since then, the Optimism Mainnet has shown remarkable growth, with over 1.5 million unique addresses and 64 million transactions. However, transaction fees have cost the community almost $15 million.

To encourage user involvement, Optimism held a second airdrop, awarding 11.7 million OP tokens to 307,965 addresses on May 9th.

The Goals & Methodology

In this study, we aimed to analyze the activities of Optimism's users who received OP tokens in 2022. We categorized the users into two groups: those who received Airdrop #1 and those who received Airdrop #2. We tracked their interactions in governance, NFT, swap, and other areas since 2022 to gain insights into how they participate in the ecosystem.

To understand user behavior, we divided users into several categories based on their activities, including "Just Stake" for those who delegated their tokens and participated in ecosystems’ voting, "Just Swap" for users who only used swapping platforms, "Just NFT" for those who primarily interacted with NFT marketplaces, and "Multi-Interaction" for those who engaged in two or more of these activities.

We also evaluated user retention for Airdrop #1 and Airdrop #2 receivers who did not receive the first airdrop.

Analysis

As aforementioned in introduction 11.74M OP tokens have been Airdropped among 308K unique wallets address.

Total dropped OP tokens and total Airdrop receivers

How many of the Airdrop #2 receivers have received the Airdrop #1 tokens?

The PIE charts reveal that 28.1% of Airdrop #2 receivers also received tokens from Airdrop #1. This means that out of 308K receivers, 227.5K were not Airdrop #1 receivers, while only 80.4K users received tokens from both airdrops.

The portion of Airdrop #2 receivers

Despite the majority of Airdrop #2 receivers being secondary users (not received Airdrop #1), early users (those who have received Airdrop #1) received 82.4% of the 11.7 million OP tokens allocated in the second airdrop(80.4K unique users).

Are the top 100 airdrop #2 receivers the same as the top 100 airdrop # receivers?

Overlapping of two airdrop top 100 receivers

The charts show the top 100 wallet addresses that have received the most airdrops. Out of the top 100 Airdrop #2 receivers, only 8 were also among the top 100 Airdrop #1 receivers, while the other 92 wallets were secondary users who received between 5 and 10K tokens. The early users received 66.24K tokens, which represents 9.5% of the tokens received by the top receivers, while the secondary users received 630K tokens, which represents 90.5% of the tokens received by the top 100 receivers.

Airdrop Receivers Retention

This section dealt with the retention of airdrop receivers #1 and 2 in the Optimism ecosystem.

Airdrop #1 Receivers Retention

There is a specific chart for Optimisms’ ecosystem contains the airdrop #1 receivers retention (since 2022).

Reading vertically (up to down) shows the product lifetime. comparing different cohorts at the same stage in their life cycle — we can see what % of people in a cohort are coming back to the chain after months and so on.

Reading horizontally (left to right) shows the lifetime — seeing the long-term relationship with people in cohort — to ascertain how long people are coming back and how strong or how valuable that cohort is.

Cohort column is the month that users(airdrop #1 receivers) had a transaction in the chain and we want to see how many of them had another transaction in the next 1 month, 2 months, etc.

The total Users Column is the number of total active users in the cohort month.

For example in the January cohort month, 20.1K unique users had at least a transaction in the Optimism chain. 1 month after (February) 43% of 20.1K users in January again transacted in the chain.

The users that were in the January & February are the most loyal users and 41 & 51% of these months users had other transactions 12 months later, respectively.

The Airdrop #1 Retention Query: Link

There is a specific chart for Optimisms’ ecosystem contains the airdrop #2 receivers retention (since 2022).

Airdrop #2 Receivers Retention

For airdrop #2 retention in the January cohort month, 1.199K unique users(airdrop #2 receivers) had at least a transaction in the Optimism chain. 1 month after (February) 34% of 1.199K users in January again transacted in the chain.

The users that were in the January & February are the most loyal users and 48 & 59% of these months users had other transactions 12 months later, respectively.

The Airdrop #1 Retention Query: Link

Interactions Fields for Airdrop Receivers

Airdrop #1 Receivers

This part has dealt with the fields of users' (airdrop receivers') interactions in Optimisms’ ecosystem.

Airdrop #1 Receivers Interactions Over Time

The above chart illustrates the transaction count performed by airdrop #1 receivers, and it's apparent that the number of transactions increased over time, with a significant spike in late May caused by airdrop claiming. The chart below shows the cumulative growth in transaction count for these users. It indicates that users who participated in swaps and NFTs had the highest number of transactions, totaling 324K, followed by users involved in NFTs, swaps, and staking, with 256,040 transactions.

Airdrop #1 Receivers Interactions Over Time in Cumulative State

Airdrop #2 Receivers

In this part we tracked the airdrop #2 receivers interactions, those who didn’t received airdrop #1.

Airdrop #2 Receivers Interactions Over Time

In contrast to the previous section, these users' interactions have shown a significant increase and peaked on January 9th, which was the date for claiming airdrop #2. As the following chart illustrates, NFT, swap, and staking were the most popular areas of activity for these users, with a total of 426.8K transactions, followed by all other action (active in all action types) with 377.6K transactions.

Airdrop #2 Receivers Interactions Over Time in Cumulative State

Distribution of Users by Their Action Type

Airdrop receivers interaction

Among the group of airdrop #1 receivers, 30% were involved in swap and staking activities, 23.5% were active in NFT, swap, and staking, and 20.7% were active in all types of activities. On the other hand, for airdrop #2 receivers, 25.5% were active in NFT, swapping, and staking, 22.6% were active in all types of actions, and 10% were involved in swapping and staking activities.

Conclusion

Based on these findings, we can infer that a significant portion of both airdrop #1 and #2 receivers have been actively engaging in the Optimism ecosystem, with many participating in various activities such as staking, swapping, and NFT trading. However, it's worth noting that the percentages of users engaging in these activities differ slightly between the two groups, indicating that the nature of the airdrop may influence the behavior of the recipients.

Moreover, the data suggests that early users who received both airdrops have received a higher percentage of tokens while the secondary users have been more active in the ecosystem compared to early users who only received airdrop #2. This may indicate that early users are more committed to the platform and more likely to participate more in delegate their token to ecosystem and validators that was the main consideration of Optimism foundation to distribute second round of airdrop.

Overall, these findings provide valuable insights into the behavior and engagement of Optimism's user base, which can be used to inform platform development and community engagement strategies.

This dashboard has been made for MetricDAO’s bounty by Flipsidecrypto’s database

Queries and Graphs: Link