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Nansen 2021 Encryption Industry Report: On-chain review of L1, DeFi, NFT, etc.

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In 2022, we expect supply to catch up with demand, and those best projects will emerge as the deserving winners.

Original title: "State of the Crypto Industry Report 2021"

Original source: Nansen

Original compilation: Rhythm BlockBeats

Overview of the whole year

2021 is an important year for encryption, with many strong projects, hot spots and trends dominating this one year.

Ethereum is no longer the only smart contract platform with a large number of users, because "multi-chain" is the general trend of 2021.

DeFi continues to inject funds into the encryption field, and NFT has brought fresh blood to encryption. Austrian economics failed to serve as the theoretical basis for convincing people to buy Bitcoin, and some cartoon JPEGs were found to be a better investment strategy.

In 2022, expect all of these crypto themes to continue growing wildly. Multichains, DeFi, and NFTs are here to stay. NFTs in particular are off to a strong start to the year, and we've only scratched the surface of its potential for gaming, art, and social networking.

Layer 1 & Layer 2 public chain

Speed, security and decentralization , which are the three key elements of the public chain. Around the scalability of the blockchain, these three elements are called the blockchain's trilemma, and it is considered impossible to achieve all of them while making trade-offs among the three.

In recent years, with the continuous improvement of user and product demand for blockchain, the inherent public chain is urgently looking for various scalability solutions.

Many Layer 1 and Layer 2 solutions have proposed innovative methods to solve various problems that occur when blockchains run on traditional consensus algorithms. compete with each other for market dominance. The rise of these solutions can be observed through the deployment of contracts on various chains, the increase in users and transaction volume, while the Ethereum mainnet is currently lagging behind, with about 20,000 contracts deployed every day, and even in 2021 Below that level between August and December 2021.

Nansen provides on-chain data for many blockchains to increase transparency and keep users informed of activity on the network.

Nansen Covered Network

(data source : Nansen; interception date: December 23, 2021)

Ethereum

has prior Ethereum, which has developed an advantage, is still the blockchain network with the largest total locked volume (TVL) and market value.

However, since the summer of DeFi in 2020, due to the congestion of the base layer, it has become commonplace for the Gas price on Ethereum to fluctuate greatly. The urgent need for capacity expansion provides opportunities for the vigorous development of Layer 1 and Layer 2 expansion solutions. Due to the rise of other high-performance, low-fee alternative public chains, the amount of contract deployment on Ethereum has also remained at a fairly low level recently, and some projects are easy to migrate due to compatibility with EVM.

Uniswap is the most important application on Ethereum in 2021, and the gas consumption generated by Uniswap accounts for more than 30% of the consumption of the top 20 applications.

(data source: Nansen; interception date: December 31, 2021 Day)

The usage of OpenSea in the NFT market will explode in 2021, and it is the only project that can occasionally surpass Uniswap in usage ( September and October).

(data source: Nansen; interception date: December 31, 2021 Day)

During July-September, the blockchain game Axie Infinity became the most Gas-consuming application on Ethereum; it later migrated to its own sidechain Enter Ronin.

(data source: Nansen; interception date: December 31, 2021 day)

Polygon

Polygon has 300% more transactions than Ethereum, but if Calculated in US dollars, the daily Gas consumed on Polygon is usually less than 0.5% of Ethereum.

(data source: Nansen; interception date: December 21, 2021)

Binance Smart Chain

The daily active addresses on BSC are the highest among all Layer 1. At its peak in late November 2021, BSC's daily transaction volume was 1,345% of Ethereum's.

(data source: Nansen; interception date: December 21, 2021 day)

Fantom

In September 2021, the Fantom Foundation announced a 3.7 As a result of the $100 million FTM rewards program, daily active addresses on Fantom increased by 440%, and total volume locked (TVL) increased from about $1 billion to over $6 billion in November.

(data source: Nansen; interception date: December 21, 2021 day)

Celo

Since June, transaction volume on Celo has increased by 4 times; its total locked volume (TVL) peaked at $1.07 billion in late October.

(data source: Nansen; interception date: December 21, 2021 day)

Avalanche

August’s $180 million incentive plan, well-known VC financing With 230 million US dollars and the launch of multiple high-quality applications on the chain, the transaction volume and price of Avalanche have skyrocketed.

(data source: Nansen; interception date: December 21, 2021 day)

USD cross-chain transaction volume from Ethereum to Avalanche hit $600M in September.

(data source: Nansen; interception date: December 21, 2021)

The total value of Token transferred to Avalanche only through the cross-chain bridge exceeds 15.5 billion US dollars.

(data source: Nansen; interception date: December 21, 2021)

Arbitrum

The significant gas surge on Arbitrum on September 12th was caused by the launch of ArbiNYAN yield mining. DeFi projects such as Curve, SushiSwap, Uniswap, and Balancer have also launched on the Arbitrum mainnet.

(data source: Nansen; interception date: December 21, 2021)

DeFi

After the rapid rise of decentralized finance (DeFi) in 2020, its momentum will continue into 2021. It is worth noting that the TVL of DeFi will increase by about 1120% in 2021, and due to the maturity of stablecoins, some reliable DeFi DApps with high user stickiness have emerged, including Uniswap, Aave and Lido.

Uniswap

Uniswap’s interaction volume initially doubled when V3 was released, but There was a noticeable decline as more forks and variants were released.

The number of daily addresses and trading volume of the Uniswap contract are as follows

( Data source: Nansen; interception date: November 24, 2021)

Aave

Aave's daily transaction peak exceeds 9K, and the number of active addresses reached 4,500 in March.

Aave contract daily address number and transaction volume are as follows

(Data source: Nansen; interception date: November 21, 2021)

Lido

Lido's total locked value grew steadily to 1.57 million ETH (approximately $6.3 billion), half of which was staked in Lido by 37 depositors.

ETH pledged over time Situation (Source: Nansen; Cutoff date: December 22, 2021)

Smart Money

In general, Smart Money will trade the WETH-Stable trading pair on DEX with the highest frequency in 2021, followed by the WBTC-WETH trading pair.

The top 10 DEX markets (based on volume) for Smart Money transactions in 2021 are as follows

(Data source: Nansen; interception date: December 24, 2021)

Smart Money also frequents DeFi blue-chip projects on DEX (SUSHI, UNI, LINK); interestingly, meme coin SHIB ranks in terms of Smart Money transaction volume No. 9.

Shiba Inu (SHIB)

Given the recent rise in Shiba Inu (SHIB) over a period of several months, some addresses have made incredible gains.

The data of SHIB independent address holders are as follows

(data source: Nansen; interception date: December 24, 2021)

Significant SHIB earners

Nansen shows that someone bought SHIB with 0.08ETH, and after 271 days, the assets increased by 7500 times to 600.4 ETH.

(data source: Nansen; intercepted Date: December 24, 2021)

Stablecoin

USDT maintains its dominance in 2021, but USDC is the stablecoin of choice in decentralized exchanges.

(data source: Nansen; intercepted Date: December 2021)

Ethereum’s total share in the DeFi market continues to remain high (about 70%), and USDT also Maintain its dominant position in the Stablecoin space in 2021.

With increased regulation and scrutiny of USDT in 2021, USDT's dominance is weakened. USDC appears to have found its niche this year as the stablecoin of choice for decentralized exchanges, trailing only USDT in stablecoin market cap in 2021, before overtaking USDT’s market cap in the first few days of 2022 .

Whale wallets with balances over $1M account for over 50% of the Stablecoin's value as of 2021 and have been steadily increasing. A potential trend is that the concentration of USDT market value may further decline in the next few years.

(data source: Nansen; intercepted Date: November 2021)

NFT

Market There were two transaction peaks in late May and late August, mainly due to users' attention to certain hot items. It's Meebits (May) for CryptoPunks and Mutant Ape Yacht Club (August) for Bored Ape Yacht Club.

NFT transaction in 8 It peaked on March 29, with daily sales reaching an unprecedented 130,000 ETH (approximately $422,080,100).

On August 29, several projects saw daily transaction volumes exceeding 1,000ETH ($2.7 million). Total NFT sales exceeded 4.6 million ETH ($17 billion) by the end of the year.

August 29 , NFT trading volume hit a new all-time high, Nansen’s 24-hour data overview records the day.

On Ethereum this year, a total of more than 1.2 million wallets have minted NFT in 18,000 projects, with a total transaction fee of 187,000 ETH (7.2 million Ten thousand U.S. dollars).

The Mint Master dashboard shows the recent minting activity of NFT projects on Ethereum.

The top 10 NFT traders this year made a total of 46,221 ETH in net profit ($185 million), many of whom are as influential as "Pranksy" Powerful figures choose to reinvest that profit in new projects.

Nansen's profit leaderboard closely tracks what's next for top-yielding NFT investors action.

Play-to-Earn

The most popular Play-to-Earn game Axie Infifinity Annual revenue is as high as $1.3 billion. Its highest daily earnings record was $17.5 million on August 6.

On November 19, the number of daily active addresses on the Ronin chain reached a peak of 1.1 million. Its total on-chain market capitalization (including SLP, AXS, and WETH) peaked on November 8 at $9.65 billion.

(data source: Nansen; interception date: December 30, 2021)

With the launch of DEX Katana in early November, Ronin's daily active addresses increased by 362% within a month.

DAO

DAO means Decentralized Autonomous Organization, which covers from Token From a purely social platform on a threshold Discord server (eg: Friends With Benefits) to a purely investment-driven platform like MetaCartel.

PleasrDAO is another interesting example, an amalgamation of social and art collections.

ConstitutionDAO was established in November 2021 to bid for the original copy of the US Constitution, which attracted more than 1,7000 people to participate in a total of ETH raised $47 million in the form of

We can use the Volume Price Chart of Friends With Benefits Pro (FWB) to analyze the evolution of DAO’s native Token price over time.

The value drivers of DAO:

· Effective incentive mechanism operation; ;

· High voting participation rate;

· Continuous project rollout.

Looking ahead to 2022

With encryption technology in 2022 Gaining wider adoption, Layer 1 and many Layer 2s will continue to perform well because of their scalability. Winners will be based on the quality and quantity of DApps, and the ease of bridging with virtually no withdrawal delays and fees, in line with a multi-chain future.

Experimentation with Stablecoins increases in 2021, along with increased acceptance of Stablecoins other than USDT on those relatively smaller chains. This indicates that USDT's market share will further decrease in the coming year. A promising stablecoin to stand out in 2021 is TerraUSD (UST), whose market cap has surpassed $10 billion.

Customer demand for crypto assets is likely to outstrip regulatory developments. The biggest risk is in wealth management, where clients can easily buy crypto assets. In 2022, inflation concerns and Fed actions will weigh on the real economy, making crypto relatively more attractive.

As more institutions explore the encrypted market, encrypted lending and options are expected to be adopted by institutions. While few companies will hold BTC directly on their balance sheets like Tesla or MicroStrategy, the opportunity to pay with cryptocurrencies may finally make it mainstream. Additionally, we expect institutional investor cryptocurrency holdings to boom in 2022, possibly surpassing retail investors.

In 2021, NFT has achieved a mainstream breakthrough. Despite the surge in sales, continued interest from first-time buyers suggests a new market is forming. In 2022, we expect supply to catch up with demand, and those best projects will emerge as the deserving winners. Early indicators point to a growing investment in Metaverse and gaming apps. The truth, however, is that the NFT market thrives on innovations that are both interesting and unpredictable.