What's going on with Avalanche?
A Free Square dashboard that dives deep into what Avalanche's users are doing!
Introduction
Avalanche has been around for less than a year, which comparing it to other, older blockchains, such as Ethereum - we should be thinking of Avalanche as a newborn baby. Nonetheless, the popularity of Avalanche has grown quite quickly, and in this dashboard, I will analyse what has attracted users to use the network. Which projects and protocols have seen the biggest numbers of users, and which ones have seen the most AVAX volume? These are only some of the questions that will be answered by the end of this investigation!
A few words on methodology:
- The Avalanche data on Flipside is still quite new - the tables are still being backfilled, so what you will see in this analysis is only the past month of data.
- ==The charts include quite a lot of data, and they take some time to load fully - but I promise they will all show up eventually!==
Key points:
- The number of users who are transacting AVAX is certainly the greatest in DEXes. However, when we look at the amounts transacted, the biggest value is found in the CEXes transactions - interesting! What does this imply? It means that there are more users in the DEXes, but more money is being spent on CEXes - which might be because due to users buying AVAX on different centralised exchanges - because it’s just easier or faster, or because they are already KYCed there, etc. Then, they could be transferring their AVAX tokens to several different DEXes or DeFi protocols, where they can enjoy rewards that different platforms offer!
By looking at the subtypes, we can see more clearly what users are doing when they are using the Avalanche blockchain. Swap contract wins when it comes to the number of people interacting with this subtype - this is quite a vague result, and we will see more clearly what this swap contract could be when we explore this data by looking at projects names the next section. When it comes to the amount of AVAX transacted, hot wallet is the winner in this category. What even is a ‘hot’ wallet? A hot wallet is a crypto wallet whose private keys are hosted on the internet, such as MetaMask. A hot wallet allows for fast signing and sending off transactions. Because hot wallets are connected to the internet, they are typically seen as less safe than cold wallets. Therefore, all these results tell us overall that a lot of users are swapping AVAX for other assets, using wallets such as MetaMask. Let’s next explore what projects have attracted the most users and for what reasons!
The biggest number of users are using Trader Joe, followed by Binance and Pangolin in the second and third place. When it comes to the AVAX amounts transacted, Binance comes in the first place, followed by Trader Joe and AAVE. What do all of these platforms offer to Avalanche users, and what makes them successful?
By looking at the overall TVL (from DefiLlama), the picture is not looking great for Avalanche - we can see a constant decline in the total value locked, and it seems that even with some assets recovering pretty quickly lately, such as ETH, AVAX is not one of them.
AAVE comes as the platform with the biggest TVL, followed by Wonderland and Benqi. We can see that Trader Joe comes only in the 4th place, which is quite surprising, given the number of users who used it in the past 30 days and the amount of AVAX that has been transaced on it.
AAVE - I think everyone knows why this platform is successful and attracts so many users - it is a decentralised lending protocol that lets users lend or borrow cryptocurrency without going to a centralized intermediary. It offers maaaany many pools and quite good APYs!
Wonderland is the first decentralized cross-chain reserve currency protocol on the TIME token. Each TIME token is backed by a basket of assets (e.g., MIM, TIME-AVAX LP Tokens etc etc) in the Wonderland treasury, giving it an intrinsic value that it cannot fall below. Wonderland also introduces economic and game-theoretic dynamics into the market through staking and minting.
BENQI is a non-custodial liquidity market protocol, built on Avalanche. The protocol enables users to effortlessly lend, borrow, and earn interest with their digital assets.
Lastly, Trader Joe - which builds on the frontier of Decentralised Finance, providing users with an innovative and unique trading experience that is seamless, accessible and empowering.
It promises to maximise users’ yield-generating activities on the premier and market-leading multi-functional Decentralised Trading Platform.
Conslusion
This dashboard has looked into Avalanche’s latest ‘growth per sector’ - we have explored what majority of the users have been doing in the past month, by looking at the label type level, the label subtype level, and lastly by project name. We have found out that users like to use DEXes the most, but like to transact AVAX on CEXes more - which was quite an interesting finding. We then saw that a lot of users are using swap contracts and hot wallets, such as MetaMask to conduct their transactions and lastly looked at the most successful projects in the past month, by the number of users, the amount of AVAX transacted and the TVLs. I have also conduced some research outside of Flipside in order to see what all of these successful platforms provide, and we have seen that it is mostly liquidity market platforms. In conclusion, even though Avalanche has been affected by the bear market quite a lot, I think that there is potential for it to recover - thanks to some of the great protocols build on the chain!