ON–029: DeFi

This is issue #29 of Our Network, the free newsletter about on-chain analytics that reaches nearly 3000 crypto investors every week.

This week our contributors cover emerging networks and companies: The Graph, Coda Protocol, Kadena, and OpeanSea.

• The Graph is processing over 1 billion queries per month for decentralized applications built on Ethereum and IPFS. Daily query volume currently ranges between 30 and 60 million, and monthly query volume is growing at over 50% monthly. Growth has been driven by new DeFi launches, increased DeFi usage, and wider Ethereum adoption.

• DeFi is dominating query volume, but diversifying slowly. DeFi is all the rage right now and you can see that in query volume as DeFi makes up 76%. Within DeFi, derivatives platforms are the most popular, as synthetic assets are a hot research topic and financial primitives. The launch of several yield farming programs and recent DeFi apps has driven that volume, however we do see query volume diversifying. DeFi’s portion of query volume has declined since making up over 85% of volume in March 2020. This implies that non-DeFi applications are increasingly gaining traction.

• While project and governance launches in DeFi have contributed to daily query volume growth; it doesn't seem that query volume growth is tied to specific subgraph deployments, as much as feature launches for applications that are already querying subgraphs. Growth in query volume is signifying growth in user adoption. However, a regression analysis does show that queries are highly correlated to subgraphs deployed overall, with a coefficient of 0.89. As more subgraphs are deployed, query volume will rise.

• Month-over-month growth in developers and subgraphs has been consistent for over 6 months. Developers on The Graph are growing at ~11% per month while subgraphs are growing at more than 12% monthly. This indicates that subgraphs have become critical infrastructure and are demanded by developers constantly. It also signifies that Ethereum developer growth has been consistent despite growth in adoption and market cap.

• Coda Protocol, the world's lightest blockchain, is about to celebrate the first year anniversary of its public testnet. Over the past year, it has steadily grown to be one of the largest public testnets, with a total of 855 unique users from all around the world. Almost 400 of these users were actively connected to the last release (source).

• Coda Protocol's PoS consensus mechanism, Ouroboros Samasika, supports an uncapped number of block producers. This is in contrast to the ~100 cap in BFT based PoS chains, such as Cosmos and Libra. As such, it's important for Coda's networking layer to support as many concurrent nodes as possible. Its latest testnet saw at least 275 nodes connected and staking at the same time without any performance degradation. The high performance allows the blockhain to support many more when mainnet launches. (Source)

• Not only is Coda's testnet public in that anyone can join the network, but also the stake is decentralized enough such that users can take the lead on producing blocks and actually run the network. This is a crucial point in the inclusiveness of Coda's blockchain, because many testnets, and even some mainnets, don't have sufficient decentralization of stake to let many participants produce blocks, creating dangerous amounts of centralization. The latest testnet of Coda saw 175 non-O(1) Labs accounts propose >5,500 blocks and run the network. This primes the blockchain really well to actually be decentralized at mainnet launch later this year. (Source)

Coda Protocol opened up its grants program to both technical and community projects! It has already collaborated on earlier grants with leading ecosystem participants such as Figment Network, Gauntlet and DSRV Labs. The project has set aside $2.1M in token grants for such projects before mainnet, with 7 projects already awarded grants. More on the program can be found here.

In addition, Coda has its Genesis grants program for leading testnet participants. It's currently onboarding the next cohort of 150 new members, after onboarding its first 40 members earlier this year. For more information, click here.

• Transactions across Kadena’s 10-chain sharded network: Since fully launching with smart contract transactions at the start of 2020, the Kadena public blockchain has been experiencing increased usage. The different colors represent chains 0-9. Chain 0 has the most activity as the one that most people select first. Notably, KDA token transactions with Bittrex Global and Kadena’s Hello dApp are only available on chain 0 at the moment. Over time, it is anticipated that the smart contract call load will continue spreading out across chains to take advantage of Kadena’s scalability.

• Growth of Kadena’s scalable L1 blockchain over time: Daily transactions have increased by approximately 6x over the last two months (based on a steady state period in April when Kadena’s sharded PoW network was averaging about 200 txs/day). The jump in June can be attributed to the first official listing of the KDA token on Bittrex Global. There have been over 129K txs in total.

• Increase in miner participation across pools: Compared to a couple of months ago, all Kadena mining pools are seeing an increase in the number of active miners, which now stands at nearly 300. Kadena’s hash rate is presently consistent at over 450 TH / s with over 7 million blocks mined (source).

• Dogfooding resulted in a successful scaling of cross-chain transfers: Utilizing Kadena’s open-source Pact smart contract language, KDA tokens are moving across chains at scale (see light teal). The largest spikes correspond with the Bittrex Global listing AMA, announcement, and related activities. There are 37.5MM KDA coins in circulation.

• Increasing adoption of Kadena through collaborations:

  • In partnership with Cosmos and the Interchain Foundation, Kadenamint (the integration of Kadena’s wallet+IDE Chainweaver and the Pact smart language on Tendermint) was implemented (link).

  • ZelCore has enabled storage of KDA across multiple chains on their cross-platform wallet (link).

  • In announcing the open-source Rosetta API for integrating with blockchains, Coinbase revealed that Kadena was one of the first projects to implement. Read the engineering blog post with learnings for other teams looking to integrate with Rosetta (link).

  • Kadena also announced a collaboration with Chainlink to use their decentralized oracles for DeFi applications and other use cases (link).

• OpenSea is an open marketplace for non-fungible tokens (NFTs), which can represent many types of assets: an NFT can be a sword inside of an online game, a concert ticket, or a digital art piece. We divided the Ethereum NFT market into subcategories and looked at secondary market volume of each category…