About the editor: Spencer Noon is Co-founder & General Partner at Variant Fund.

Network Coverage
Coverage on Ethereum, Lido, The Graph, and Optimism.

• On June 30th, Ethereum successfully underwent the Gray Glacier hard fork, delaying the difficulty bomb by 3 months. Before the fork, the bomb had started to dramatically slow average block time. Although not immediately obvious, slower block times can have cascading effects on other on-chain metrics. Slower blocks means less total blocks per day, which leads to less total transactions per day. With the delay in the difficulty bomb ETH daily transactions rebounded back to more normal levels.

• Despite the recent market downturn, the number of addresses holding at least 1 ETH is on the rise. As of July 14th there are now over 1.56m unique addresses that hold at least 1 ETH, a positive sign for user adoption.

• The market crash has also led to a sharp decrease in average transaction fees. With fees at their lowest levels since July 2021 (in USD terms), it’s starting to become more affordable to interact with popular Ethereum applications, another plus for onboarding new users.

• Lido continues to lead the ETH2 staking market, having 31% market share but steadily falling since May, with new exchange staking products likely contributing to this dynamic. The number of nominal ETH deposited has flattened since early May 2022, and it is possible broader market volatility as deterred prospective depositors. Lido's 4m ETH deposits is 20x larger than the younger competitor, Rocket Pool which has ~200k ETH deposited to its validators today.

• Token flows into Lido for alternative ecosystems (SOL, MATIC, KSM) have also slowed with few days seeing >$5m in inflow value. This also started mid-May indicating that wider market volatility has impacted Lido's non-Ethereum ecosystem adoption more broadly.

• Lido has a sizable treasury ($150m+), but it is dominated by its own native cryptoasset, LDO, which has a weight of 82%; this is quite a volatile balance sheet. Divesting the treasury will allow Lido to pursue new vertical scaling initiatives.

• As more subgraphs have been migrating from the hosted service to The Graph Network, query fees paid by users 5x'd since May. Over 600k GRT in query fees have been paid to date, and increasing as we move towards sunsetting the hosted service. Indexers (node operators), Delegators and Curators each earn a portion of fees. Today daily query fees paid are averaging 8-10k GRT per day.

• Over 400 subgraphs have been published to the network. Query volume is currently led by Connext, Premia, DODO, Shattered EON, Sushi, ETH Burned, Nifty League, and Art Blocks. Approximately 44% of queries serve Scaling & Other, 29% to DeFi, 14% to NFTs, 8% to Ethereum / network data, and 5% to DAOs.

• As migrations and query fees grow, Delegators have taken notice with over 100m GRT delegated (staked) to Indexers since April. Total GRT delegated exceeds 1.8b GRT. Coupled with over 1b GRT staked by Indexers themselves, 28% of total GRT supply is being used in the network.