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Big V said that "the actual usage of encryption has not increased in 4 years", triggering criticism from the industry

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Nansen CEO, Crypto Quant CEO, Coinbase Cloud OG protocol expert, Dragonfly Capital partner and other KOLs responded one after another

Original author: 0x9F, founder of BlockBeats

Soundwise Natasha Che has been sharing her thoughts on cryptocurrencies and Web3 on social media. She has sorted out valuation methodology, macro perspectives, and the impact of encryption technology on the future economy.

However, on July 20, Natasha stated that "Since 2019, the actual Encryption usage in 2019 is barely growing". This point of view triggered responses and attacks from KOLs including Nansen CEO, Crypto Quant CEO, Coinbase Cloud OG protocol expert, and Dragonfly Capital partner.

Natasha first uses the data of a graph to represent,the actual global transaction volume of encryption It has fallen to the level of early 2019, but the market value is still very high. Based on this, she came to this controversial conclusion that since 2019, actual encryption usage has hardly increased.

She released the second picture later, thinking that the number of transactions also supports this conclusion. There is no real growth after a full market cycle, and all surges in between are mostly speculative.

What is the "actual transaction amount"?

Natasha emphasized a "actual transaction amount" above, because Transaction volume has been scaled by her according to the Crypto Price Index, thereby eliminating the impact of price appreciation effects. This "actual turnover," which she coined, is in fact at the heart of the debate.

Nansen CEO Alex Svanevik responded with a "This is absolutely wrong", unless "actual transaction volume" means something very specific. CryptoQuant CEO Ki Young Ju believes that the only reasonable explanation is that "actual transaction volume"only includes EOA (Externally Owned Account) transfer transactions and does not include transactions from smart contracts.

What exactly is this "actual transaction amount"? Natasha finally made it clear that the Chainalysis databaseonly measures Token transfer transactions, and does not consider smart contract calls. Viktor Bunin, protocol expert at Coinbase Cloud OG, argues thatdata is missing all ERC20 (including stablecoins like USDC), ERC721 NFTs and applications if smart contracts are not included. But these are where encryption is most commonly used and where the fastest growth occurs. Natasha responded that the Token transfer transaction here also includes ERC20 Token (that is to say, the data in Natasha's first picture also includes the transaction amount of Stablecoin).

Natasha asserts that there is some validity to this statistic: "Yes, the latter (smart ) has grown a lot over the past cycle. However, if crypto adoption is widespread, you would expect token transfer transactions to increase over time as well.”

Of course, some encrypted KOLs questioned Natasha Che's reliability of the chart data itself. Viktor Bunin claims that no part of Natasha's chart passed the Sniff Test. Dragonfly Capital partner Tom Schmidt believes that the Stablecoin transaction volume on Ethereum alone can reach 20 billion U.S. dollars per day. The data in Natasha's first picture may only calculate the Gas spent on Stablecoin transfers, and does not include The value of Stablecoins in these transfers.

Why did KOLs react so strongly?

Natasha Che is very sorry for herself. Originally, she sent a picture just to say that the plunge in crypto transaction volume after the end of the bull market just reminds us that the current crypto "adoption" is still driven by speculation. "I don't know why everyone is on guard against this?"

In the eyes of KOLs, Natasha denies some of the most important innovations in crypto in recent years. CryptoQuant CEO Ki Young Ju pointed out that she is expressing Web3 innovations such as DeFi/NFT/GameFi in this way, which is nothing to her. However, with the development of the ecosystem, most transactions will shift from Token transmission to smart contract invocation.

Also, in Ki Young Ju's view, measuring crypto adoption in terms of P2P payments is ridiculous. There is no point in ignoring smart contract transactions unless all cryptocurrencies are only good for P2P payments. Crypto adoption cannot be explained solely by EOA transfer transactions.

Natasha Che's past views

As the discussion heated up, crypto KOLs gradually shifted their attention from Natasha Che's point of view to her. Some people think that Natasha Che has always been unreliable. She published an article "Why I am Bearish on Ethereum in December 2021 " was taken out to flog the corpse.

It has been argued that the core premise of Natasha's article is that things like Arbitrum and Optimism The L2 of Ethereum will take away the vitality of Ethereum L1. But L2s like Arbitrum and Optimism have been around for about a year. Relevant data shows that despite the good growth of L2, Ethereum is still running at a rate of 1 million to 1.2 million transactions per day (far exceeding L2).

While Ethereum's daily fees are also well above their 2021 lows, L2 growth may instead increase the attractiveness of Ethereum's block space force. It seems that L2 is attracting incremental transactions rather than fetching transactions from L1.

Natasha also believes that both institutions and individuals It's for rewards, not safety, and large-cap stocks are not "safer." This graph in her article shows that LUNA has a higher reward/risk ratio. Well... LUNA had a thunderstorm this past May.

Finally, Natasha's biggest comment was "With the arrival of Ethereum L2, even in Ethereum's own ecosystem, you Need to own ETH". However, the base currency of Arbitrum and Optimism is ETH, and ETH is also required as a gas fee for transfers on it.

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