Weekly fundamentals #50

A walkthrough of the most interesting charts and trends in crypto, with a focus on key business drivers and protocol fundamentals. Let’s dig in!

Key highlights from the past week at Token Terminal:

📊 Blur, Catalog, Morpho, Stargate, and Velodrome are now listed on Token Terminal.

🎙 Watch our latest episode of 15-minute fundamentals with StakeWise on YouTube, or listen to the audio version on any podcast platform.

Earnings leaderboard

Which projects have earned more in revenue than they have paid out via token incentives?

Top 10 projects by earnings in the past 7 days

Earnings = revenue - token incentives.If this number is negative, a project spends more on token issuance than it earns in revenue.

Explore the full earnings leaderboard here.

Charts to watch

A walkthrough of the most interesting charts and trends across our key metrics.

Token incentives tend to largely outweigh revenue generated during an exchanges early stages

• The most prominent example of a DEX using token incentives to bootstrap growth is SushiSwap and its “vampire attack” on main competitor Uniswap.
• SushiSwap handed out close to $400M in incentives to users after launching in September 2020, allowing it to achieve $2.2B in monthly trading volume within its first month post launch.
• During the initial period of the vampire attack, the number of daily active users on Uniswap briefly dropped from 32K to 20K.
• Although bootstrapping growth with token incentives is a popular way to accelerate user adoption, it is questionable whether this method is sustainable in the long-term.

The Atomic Swap integration saw Synthetix’s trading volume explode

• The monthly trading volume on Synthetix grew from $0.3B to $1.9B following the integration of Synthetix’s atomic swaps with DEX aggregator 1inch on 1 June 2022.
• Atomic Swaps use a combination of Chainlink and DEX price oracles to facilitate trades using Synthetix’s synthetic assets as an intermediary, which drastically reduces slippage for large trades.
• Slippage for ETH/USDC swaps, before and after Atomic Swaps:

Convex Finance has lost over $300M in 2022

• Although Convex Finance’s revenues were heavily outpaced by token incentives in the beginning of the year, token emissions have started to slow down due to their tokenomics model.
• The rate of CVX emissions reduces as more CRV tokens are claimed by liquidity providers, until all CVX tokens are minted.
• As a result of reduced emissions, the ratio of monthly revenue : monthly token incentives is ~30% in Oct 2022, while the same ratio was ~4% in Jan 2022.

Rocket Pool has the “richest” tokenholders

• The protocols with the largest average value of tokens per tokenholders are Rocket Pool, Euler and Ribbon Finance, with $113K, $93K and $91K per tokenholder, respectively.
• It is important to note that this metric may be skewed by a number of factors, including: treasuries or CEXs holding a large number of tokens in a single wallet, or a large number of MEV bots owning a single token for gas optimization when transacting.

Head over to tokenterminal.comfor a more detailed view of the top blockchains & dapps.

This week’s video

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