Try Quests to earn cryptoTerra - 8. New Year’s Resolutions
New Year’s Resolutions
2022 was a rough year for Terra and $LUNA. So what will the future hold — and what New Year’s Resolutions could the protocol make to ensure 2023 is better than 2022?
Identify at least three goals that the Terra ecosystem and community should have in the New Year, how they can achieve them, and what good fortune those changes would bring. Back up your assertions with on-chain data.
We are not looking for data on Terra Classic for this bounty. Please use the terra.core tables hosted on Flipside Crypto.
Introduction
The year 2022 proved difficult for the Terra and LUNA ecosystem as a whole due to a number of challenges and setbacks experienced by the community as a whole. On the other hand, as the New Year approaches, it is crucial to plan ahead and make lofty plans for the future. With this inquiry, we'll take a look at some possible directions for the Terra ecosystem and community in 2023, such as boosting user retention, expanding decentralization, and expanding the use of smart contracts. We will also analyze the potential benefits of these endeavors and the methods by which they can be accomplished, including the use of on-chain data. These objectives, taken as a whole, are vital to making 2023 a fruitful year for Terra and LUNA and the crypto industry as a whole.
Method
In this dashboard, I tried to track some metrics since the LUNA 2.0 launch date to find areas that can be improved in the new year as new resolutions.
For this, I have evaluated the user adoption and retention by measuring the daily new and active wallet and how many days they are active, the time zone of the user to find where they come from, and the inflow and outflow of stablecoins.
In the second step, I was looking for how much was decentralized and measured the staking activities and Nakamato & Gini coefficient , and Lorenz curves.
Finally, I look at contract deployment and active users to see how things are going with this metric on Terra.
The Lorenz curve is a graphical representation of the distribution of a variable, typically used to depict income or wealth distribution among a population. It plots the cumulative percentage of the population against the cumulative percentage of income or wealth. A perfectly equal distribution would be represented by a straight line at a 45-degree angle, while a skewed distribution would deviate from this line. The area between the Lorenz curve and the 45-degree line is known as the Gini coefficient, which is commonly used as a measure of income inequality.
The Gini coefficient is a measure of income inequality within a population. It ranges from 0 to 1, with 0 representing perfect equality (everyone has the same income) and 1 representing perfect inequality (one person has all the income). The Gini coefficient is calculated by measuring the area between the Lorenz curve (a graph that plots the cumulative distribution of wealth or income) and the line of perfect equality. A higher Gini coefficient indicates greater income inequality. The Gini coefficient is commonly used as a summary measure of income inequality in a country or region.
✍🏻 Conclusion
The Terra ecosystem and community have faced challenges in 2022, but it is important to look ahead and set ambitious goals for 2023. Three potential goals for the Terra ecosystem and community in 2023 are:
- Increasing user retention: To increase user retention, the Terra ecosystem and community can focus on building and promoting user-friendly and accessible products and services, such as mobile wallets, payment platforms, and decentralized applications. Additionally, incentivizing and rewarding users for their engagement and participation in the ecosystem can help to increase user retention. On-chain data, such as transaction and usage metrics, can be used to track and measure progress towards this goal.
- Increasing decentralization: To increase decentralization, the Terra ecosystem and community can focus on increasing the number of validators and delegators in the network. Additionally, implementing on-chain governance mechanisms, such as proposals and voting, can help to give community members more control over the direction of the ecosystem. On-chain data, such as the distribution of validators and delegators, can be used to track and measure progress towards this goal.
- Increasing smart contract deployment: To increase smart contract deployment, the Terra ecosystem and community can focus on building and promoting a developer-friendly environment, such as providing educational resources, tools, and support for developers. Additionally, incentivizing and rewarding developers for their contributions to the ecosystem can help to increase smart contract deployment. On-chain data, such as the number of smart contract deployments and their usage, can be used to track and measure progress towards this goal.
Achieving these goals can help to ensure that 2023 is a successful and prosperous year for Terra and LUNA, as well as for the broader crypto community. Additionally, these efforts can help to increase adoption and mainstream acceptance of cryptocurrency, as well as improve the overall health and sustainability of the ecosystem.
Hey there 👋!
Firstly, I appreciate you sticking with it until the conclusion.
I'm Hamed, a civil engineering Ph.D.
student interested in data analysis.
I've made many similar dashboards and visualizations since I started at Flipside in January.
Please take a look at my various contact details and let me know what you think.
About:
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Author: HaM☰d
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Discord: 0xHaM☰d#8391
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Twitter: @arjmandi_hamed
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Email: h_arjmandi2012@yahoo.com
🏃♀️ Active Users on Terra
- Defined as users who have been active for 7 days (performed a transaction on 7 separate days) or more and were active in the last 7 days (performed transaction in last 7 days
About 1/3 of these active citizens were online daily
How many of these active citizens were online daily? About 800-1k of these citizens were online daily since launch date. They performed between 2-5k transactions daily, which amounts to ~5+ transaction per active user.
Only a fraction of the users were active in Terra
Accounting for active users (defined left), we see that only a fraction of the new wallets were truly active in the Terra ecosystem (17.4k out of 2.87M). The number of new active users has been fluctuating between ~1 to 10 daily, with occasional spikes, as seen on 4th Sep.
Here, we add an additional filter to look at the active users defined in this analysis. Similar to the previous analysis, we see a similar distribution, but with spikes in user count in specific timezones:
- -2 UTC: Azores Cape Verde Region
- 2 UTC: Central Africa Region
- 5 UTC: Southeast & Central Asia Region
- 8 UTC: Southeast Asia Region
Note that the user count here is low as we are looking at users that have made transactions in >20 unique hours, which is necessary for this analysis.
Terra users seems to come from Central America, Azores Cape Verde to Southeast Asia Region.
We see users clustering around the -9 UTC to +9 UTC region. This suggests that most of the users were from Europe (? which is odd) and South/Central Asia region.
Observations on the data presented around decentralization
> The Nakamoto coefficient is the number of validators (nodes) that would have to collude together to successfully slow down or block any respective blockchain from functioning properly
This is definitely something that should be addressed especially if the chain starts gaining significant traction. The Lorenz curve (on the left) and Gini coefficient, validate the idea of a needed improvement in this criteria. For reference, a value of 1 means that only one decision maker (validator) is needed to compromise the system. The closer we get to 0, the more decentralized and “equal” the distribution is.
> The Lorenz Curve shows the cumulative share of voting power in the validator set. In a case of perfect equality, the chart would show a straight 45-degree line connecting the x and y-axis.
In practice, when trying to actually conduct an attack on the blockchain, the power and capital needed to actually be able to take over the chain is higher than what these coefficients state since additional variables come into play.
- As we can see, there is currently needed 11 validators holding 33% of the total staked balance.
- As of these metrics and the following charts that show the distribution of staked LUNA among validators, more than 42% (without include 18.4% to null addresses) of net staked volume has been allocated to 10 validators, so this can lead to more centralization in the Terra ecosystem.
:mag_right: Findings:
The data shows that while the total number of functioning smart contracts on the Terra network has increased, the rate at which new smart contracts are being deployed has decreased. Since July 2022, the graph shows that the average number of newly deployed contracts on Terra has decreased to 2 per day, while the number of active contracts has increased from 50 to 150 per day. Increasing developer engagement and adoption of the Terra blockchain may help address the issue of slow smart contract deployment. This could be attained through the provision of more extensive developer tools and resources like tutorials and sample code, as well as through the organization of hackathons and other developer-centric events. In order to attract more programmers and projects to the network, it would be helpful to form alliances with existing businesses and institutions that have expertise in creating and deploying smart contracts.
👛 New Wallets Created on Terra
Here we count the total number of new wallets with the fact transactions table. A new wallet is defined as one that has a transaction initiated from fact_transactions.