Blockchains Metrics: February 2023

Introduction

Blockchain technology is here to stay, and companies and individuals alike are starting to embrace it. It is important to mention, that despite the notable impact of the recession and bear market on the market capitalisation, over 300 million people, or 3.9% of the global population, use blockchain or cryptocurrency. There are over 82 million Bitcoin wallets and 425 million crypto holders in the world. Moreover, it’s projected that companies will spend almost $19 billion on blockchain technology in 2024 and 90% of U.S., Canadian and European banks have started exploring blockchain technology.

This report aims to provide a snapshot of the main achievements and metrics of blockchains in February 2022, taking into account the economic downturn, and offer insights into the future of this rapidly evolving ecosystem.

Part 1: Key Milestones

Ethereum

Ethereum is a technology for building apps and organisations, holding assets, transacting and communicating without being controlled by a central authority. There is no need to hand over all your personal details to use Ethereum — you keep control of your own data and what is being shared. Ethereum has its own cryptocurrency, Ether, which is used to pay for certain activities on the Ethereum network.

Source: Ethereum.org

In the end of February, we will have the Shanghai upgrade that will bring staking withdrawals to the execution layer. In tandem with the Capella upgrade, this enables blocks to accept withdrawal operations, which allow stakers to withdraw their ETH from the Beacon Chain to the execution layer.

Shanghai marks the end of an undefined lock-up period for ETH staking. Users will be free to:

• Stake their ETH
• Earn ETH rewards that will be distributed automatically
• Un-stake their ETH to regain full access to their entire balance
• And of course, re-stake to sign back up and start earning more rewards

Probably, it is the most significant upgrade in Ethereum history after the Paris upgrade.

The Capella upgrade is the third major upgrade to the consensus layer (Beacon Chain), which enables staking withdrawals. Capella is to occur simultaneously to the Shanghai upgrade occurring on the execution layer to enable withdrawal functionality in sync with one another.

• This consensus layer upgrade brings the ability for stakers who did not provide withdrawal credentials with their initial deposit to do so, thereby enabling withdrawals.
• The upgrade also provides automatic account sweeping functionality, which continuously processes validator accounts for any available rewards payments or full withdrawals.

BNB Chain

Build N Build (BNB) Chain is a distributed blockchain network upon which developers and innovators can build decentralised applications (DApps) as part of the move to Web3. The Binance Smart Chain (BSC) is now the BNB Chain. BNB is the cryptocurrency that fuels the BNB Chain ecosystem and the native coin of both the BNB Beacon Chain and the BNB Smart Chain. It also serves as a governance token, apart from fueling transactions on the BNB Chain, much like gas on Ethereum.

According to Dune, BNB Chain amassed over 7.9 million monthly active users in January 2023, making it one of the most used blockchains. An average gas fee of 0.00069 BNB is one of the lowest among L1 blockchains while processing over 3 million transactions every 24 hours.

With over a thousand BNB Chain dApps listed on DappBay, I looked closer at the top 15 most used dApps on BNB Chain, and what makes them popular among Web3 users.

The top 15 most used dApps on BNB Chain amassed over 2.18 million monthly users in February 2023 with most of the users participating in DeFi activities. Out of the 15 most used dApps on BNB Chain, 8 dApps fall into Web3 gaming or game-fi making it one of the most popular Web3 categories. 3 dApps fall into the tools and utility category while 2 dApps represent DeFi in this list.

In 2022, BNB Smart Chain (BSC) was able to handle 2.2K TPS (theoretically) and will be increasing its capacity to 5K TPS in 2023. BSC is the most active chain with the largest daily active users (~1M DAU even in the 2022 bear market) and the most active DEX as well.

Source: bnbchain.org

In 2023, BNBChain will embrace more diverse scalable solutions pragmatically through ZkBNB (Mainnet 2023 H1) and the new Optimistic Rollup (mainnet 2023 H1), which will provide more options for different business cases.

In 2022, BNB Sidechain introduced a modular framework for the PoSA sidechain, which was contributed by Ankr and NodeReal. The purpose of BNB Sidechain is to enable large-scale companies to build their own ecosystem. It comes with full Ethereum compatibility (EVM) and operates on the PoSA consensus. It is very suitable for the permissioned and consortium blockchain. Based on existing successes, such as FNCY Chain or ApeCoin Chain, Sidechain will be more suitable for big names or brands that people may trust that have strong network operation experience with partners.

The BNB ZkRollup (zkBNB) is built on ZK Rollup architecture. ZkBNB bundles (or “rolls-up”) hundreds of transactions off-chain and generates cryptographic proof. These proofs can come in the form of SNARKs (succinct non-interactive argument of knowledge), which can prove the validity of every single transaction in the Rollup Block. ZkBNB started its development based on Zecrey’s initial version. With contributions from Zecrey, Nodereal and BNB Chain Core team, zkBNB is currently in the testnet phase, and is targeting mainnet in Q1 2023.

Before the readiness of zkEVM, Optimistic Rollup is a more realistic and secure solution to provide a purely EVM-equivalent scalable solution. In 2022, Optimism and Arbitrum demonstrated strong adoption in the Ethereum ecosystem. At the same time, EIP-4844 (Proto-dank sharding) will introduce a new transaction type: blob-carrying transaction. A binary large object (blob) is a big piece of data that is cheaper to publish and store on-chain than calldata. By using blob-carrying transactions, rollups can upload all their data to Ethereum. After implementing EIP-4844, we could see a 10–100x decrease in transaction fees in both optimistic and ZK-rollups, which will make the optimistic rollup >20K TPS (in theory). In 2023, BNBChain should expect to see more Optimistic rollup solutions.

BNB Greenfield is an innovative step forward in blockchain data storage, it is first useful to understand how data is currently stored. A decentralized data storage network is a system in which data is stored across a network of nodes, rather than in a centralized location. This structure has a number of important benefits compared to centralized data storage networks.

Users will be able to:

• Log in with anonymous cryptographic-based keys (IDs)
• Create, read and execute data with a UX similar to that of today’s leading state-of-the-art cloud storage services
• Fully own their data assets, control who can use them, and how, both manually and programmatically
• Leverage their data for their own and others’ financial benefit

You can get more details from this whitepaper.

Part 2: Blockchain’s Metrics

Fully Diluted Market Cap (FDV): maximum supply * average price of governance token. The highest FDVs have Bitcoin ($603.5B) and Binance Smart Chain ($61.7B). Token supply of Ethereum is unlimited, so it is not possible to calculate FDV. Ethereum market capitalisation is around $200B.

Circulating Market Cap (CMC): circulating supply * average price coin/ token. Bitcoin ($461B, 92% liquid supply), ETH ($198.6B, unlimited supply), BNB ($48.7B, 80% liquid supply) and Cardano ($13.4B, 76.7% liquid supply).

Trading Volume (TV): trading volume of the protocol’s tokens/coins. The highest trading volumes in the previous month had: Bitcoin ($1.1T), Ethereum ($0.28T), Dogecoin ($25.1B), Polygon ($24.6B) and BNB ($21B).

Total Fees (TF): total fees paid by users in US dollars. The largest amounts of fees paid by users in February: Ethereum, Binance Smart Chain, Bitcoin, Polygon and Arbitrum.

Daily Active Users (DAU): number of distinct addresses interacting with business relevant contracts. The most active Blockchains by users are: Binance Smart Chain (1.2M DAU — 75% growth from January), Ethereum (410.6k DAU — 35% growth from January), Polygon (299.8k DAU — 10% decrease from January), Solana (128.1k DAU — 2% decrease from January) and Near (59.4k DAU — 31% decrease from January).

Active Developers (AD): Number of distinct GitHub users that made 1+ commits to the project’s public GitHub repositories during the past 30 days. The most active Blockchains by developers are Ethereum (194 AD — 25% growth), Kusama (161 AD — 12% growth), Polkadot (161 AD — 12% growth), Cardano (140 AD — 11% growth) and Cosmos (120 AD — 26% growth).

Part 3: Executive Summary

1. Bitcoin ($603.5B) and Binance Smart Chain ($61.7B) have the highest FDV. Token supply of Ethereum is unlimited, so it is not possible to calculate FDV. Ethereum market capitalisation is around $200B.

2. Circulating Market Cap: Bitcoin ($331.2B, 92% liquid supply), ETH ($162B, unlimited supply), BNB ($44.5B, 80% liquid supply) and Cardano ($11.1B, 76.7% liquid supply).

3. Daily Active Users (DAU): number of distinct addresses interacting with business-relevant contracts. The most active Blockchains by users are: Binance Smart Chain (1.2M DAU — 75% growth from January), Ethereum (410.6k DAU — 35% growth from January), Polygon (299.8k DAU — 10% decrease from January), Solana (128.1k DAU — 2% decrease from January) and Near (59.4k DAU — 31% decrease from January).

4. The most active Blockchains by developers are Ethereum (194 AD — 25% growth), Kusama (161 AD — 12% growth), Polkadot (142 AD — 12% growth), Cardano (126 AD — 11% growth) and Cosmos (120 AD — 26% growth).

5. The largest amounts of fees paid by users in February: Ethereum, Binance Smart Chain, Bitcoin, Polygon and Arbitrum.

Sources: Token Terminal, CoinGecko, Coinmarketcap, bnbchain.org, ethereum.org, cointelegraph.com

Author: Ivan Maltsev