About the Editor: Spencer Noon is an independent angel investor. Looking to get in touch? DM him on Telegram or reply to this email and say hi 👋

This Issue Is Powered By Polygon 💜. Check out the new hyper-scalable DeFi hub emerging on Polygon zkEVM.

• Pyth Network, a decentralized oracle network, delivers financial market data to blockchain platforms. Having more than 95 first-party publishers, it provides over 450 price feeds across multiple asset classes. Focused more on Solana than Chainlink, Pyth has shown steady growth in the past two years, including expansion into the EVM ecosystem. Notably, it handled over 90% of Solana's price feed transactions in the last three months when compared to Chainlink.

• In summer 2023 Pyth price feeds peaked at 5M transactions on June 12 before dropping to roughly 1.3M and hovering around 2M for the rest of the year. Daily active users rapidly grew in Q4, going from 4,810 to over 34,077 at year-end. This highlights a strong and ongoing adoption trend for Pyth.

• Chainlink dominates the realm of oracle solutions on EVMs, commanding over 90% of price feed transactions. Meanwhile, Pyth holds sway over Solana's oracle scene and is increasingly gaining traction in the EVM space. Notably, Pyth achieved an all-time high of over 60,000 transactions last week.

• 💦🔬 Tx-Level Alpha: The number of $PYTH stakers has skyrocketed recently. Yet, the total amount staked nosedived. This drastic change is due to single transaction which unstaked about 500M $PYTH, worth $127.8M.

• The Graph initiated a transition from Ethereum to Arbitrum in 2H23 to provide improved UX for users and Indexers. Protocol rewards were gradually allocated to L2 in a staggered approach to incentivize the migration. As of Jan 25th, 96.6% of the staked GRT has moved to L2, a non-trivial feat for the ecosystem.

• Concurrent with the staked GRT migration, more subgraphs were directly deployed on L2. Although developers continue to deploy their subgraphs on Ethereum, the vast majority of new subgraph creation is now on L2, facilitating inexpensive on-chain deployments for developers.

• Ethereum maintains dominance of unique queried subgraph deployments at 62%. That's down from 88% in 1Q23 as Arbitrum, Polygon, and Gnosis grew. With Optimism's launch in 1Q24, more deployments on L2s are expected. 4Q23 had an all time high of 1,048 distinct queried subgraphs on the network and the number of active distinct subgraph deployments overall reached 1,509.

• 💦🔬 Tx-Level Alpha: This user delegated 50 GRT ($7.52) on Arbitrum. The gas cost was only 0.1 Gwei. L2 empowers these micro transactions which are not economically feasible on L1.

• Chainlink Cross-Chain Interoperability Protocol (CCIP) addresses the interoperability challenge among different blockchain networks, enabling communication and asset transfer across networks. Chainlink CCIP is on pace for 2,990 transactions in January (+80.88% M/M) despite its monthly fees stagnating at $30.27K (-6.12% M/M).

• Interestingly, the two most popular lanes are Ethereum <> Avalanche C-Chain and Avalanche C-Chain <> Ethereum, which account for 21.43% of CCIP transactions in the last month. As a result, Avalanche C-Chain represents 49.48% of CCIP fees – its highest share to date.

• Chainlink CCIP users continue to pay in LINK despite the option to pay in a variety of different tokens (e.g., wMATIC, wAVAX, wBNB, wETH).

• 💦🔬 Tx-Level Alpha: Here is a CCIP message from WEMIX testnet to Kroma testnet. It's possible it relates to Chainlink Labs' partnership with WEMIX to build the omnichain network, unagi. CCIP is the exclusive technology underpinning unagi(x) and is the central component needed to build a decentralized omnichain messaging protocol that supports fast and secure on-off chain trading.

• Filecoin is the largest decentralized storage network and the Filecoin Virtual Machine (FVM) is nearing one year since mainnet launch. Filecoin DeFi continues to grow and now sits at 22M FIL ($110M). Uniswap’s upcoming FVM launch should be a further catalyst for growth.

• The Filecoin liquid staking market has tripled in $FIL terms since my last coverage in July. Glif, now 2x larger than its closest competitor, stands out as the undisputed market leader.

• The ultimate health metric of the Filecoin network is data stored in active deals. These deals have continued to hit ATHs and reached over 1700 PiB in Q4.

• 💦🔬 Tx-Level Alpha: Themis is one of the earliest AMM's to deploy into the FVM. The AMM has grown into one of the most used contracts on the FVM with over 8000 unique users.

• Arweave is decentralized protocol enabling permanent data storage. Use cases for the protocol include storing censorship resistant, open AI models, and hosting decentralized and provably neutral web apps. Arweave’s architecture guarantees data availability and data persistence. It also provides a new design space for application development by decoupling storage from computation. Arweave has seen an explosion of activity with 1.8B transactions in 2023, representing 428% YoY growth.

• Over 150 TiB of data is stored on Arweave (weave size). Weave size increased to ~147 TiB in 2023, up 29% YoY. Having added 359 GiB of data in the past week, ArDrive, a storage solution, was Arweave’s most significant user. At 147 GiB, image/jpeg files were the largest contributing factor.

• SmartWeave (Arweave's smart contract protocol), has surged in usage now boasting over 74.3M total transactions and 9M total contracts. Projects such as Warp and Mem are enhancing the original SmartWeave spec with new implementations, positioning the SmartWeave ecosystem for continued growth in 2024.

• 💦🔬 Tx-Level Alpha: This is the address of RedStone, an oracle provider who uses Arweave to permanently store oracle data/updates, which bolsters data provider integrity and accountability. RedStone has driven the lion's share of Arweave transaction growth. Over the past week, Redstone made 95m+ transactions and sent over 125 GiB of data via bundles alone.