GM
Welcome to Dune Digest #46 - and welcome to the 446 new subscribers who joined us this week!
First, news of the week……
Wizard Jobs
Demand for data analysts, and Dune Wizards in particular, is booming across the crypto space! Many Wizards have leveraged their Dune skills into great careers with VC firms, protocols and institutions.
We believe this is only the beginning, and want to do everything we can to help out. So we built Wizard Jobs.
Wizard Jobs will be continuously updated with new roles that fit your skillset. Organizations can also submit open roles straight to the board. Check it out!
Lookbook
As you know, fundamentally Dune is a streetwear brand that monetizes through crypto data tooling.
Check out our new lookbook.
seaport.transactions
More Opensea data? Yes. We have a new Seaport abstraction for Polygon live!
Community Takes
@frankmaseo investigates Aave on Arbitrum [link]
@tomwanhh gives an update on the stablecoin market [link]
@frankmaseo explores Aave on Arbitrum [link]
Now, let’s get into the data…..
MEV on Ethereum
Since we added Flashbots data earlier this year, we’ve seen a lot of interesting MEV dashboards. Last week @chorus_one released a particularly good one, let’s take a look.
MEV stands for Maximum Extractable Value and refers to additional value that can be captured from crypto markets by miners & searchers.
Three kinds of MEV are covered in the dashboard:
Arbitrage - profiting from price differences of the same asset in different DEXes by buying the token at a lower price and selling it at a higher price in a single transaction
Liquidation - when borrowers’ collateral drops below a certain threshold on platforms like Aave and Maker, anybody can liquidate the collateral and pay off the lender - and collect some of the liquidation fee….
Sandwich attack - watching the mempool for DEX trades large enough to affect the price of assets in pairs, then buying immediately before and selling immediately after the trade - profiting from the price change
MEV is a profitable game. Over the past year more than $280m of MEV was extracted, excluding sandwiches:
This netted $169.3m after costs like miner payments.
Arbitrages and liquidations are often seen as the “good” kind of MEV, since they support market efficiency and are often not perceived as directly harming users.
Of these two - arbitrages account for over 70% of profits, with $227m gross & $124m net. The margin on liquidations is higher though, with $44.4m net profit from $54.2m gross.
So who is actually doing all this? There are two key players - Miners and Searchers.
The Ethereum Foundation notes that:
In theory MEV accrues entirely to miners/validators because they are the only party that can guarantee the execution of a profitable MEV opportunity. In practice, however, a large portion of MEV is extracted by independent network participants referred to as "searchers." Searchers run complex algorithms on blockchain data to detect profitable MEV opportunities and have bots to automatically submit those profitable transactions to the network.
Over the past 30 days, searchers have captured the larger share, leaving miners with just over 40%:
@chorus_one has identified 1426 unique bots over the past year!
Now, let’s take a look at the “bad” MEV.
Arbitrages and liquidations are arguably good for the ecosystem in several ways. It’s hard to make the same case for sandwich attacks, an exploitative reordering of transactions that directly results in losses to users.
Unfortunately, sandwiches are highly lucrative - bringing in more profits than the previous two combined. Total profit is eyewatering, approaching half a Billion $:
The biggest sandwichers have extracted $1m+ over the past 30 days - and that’s all at the expense of DeFi participants…..
Overall, we can see that MEV is big business, and an important part of Ethereum for better and worse. This is an interesting area to keep an eye on as we move toward The Merge, since the shift to proof-of-stake will shift the dynamics significantly.
Check out the full dashboard for more…..
.BNB Domains
.eth names are great, and they’ve been a huge success story. But obviously, they’re just for Ethereum.
As crypto became fragmented into different chains and ecosystems, and as efforts were taken to improve cross-chain portability, some ambitious projects are attempting to create universal, chain-agnostic name services…..
One of the most high-profile is Space ID, a Binance Labs-backed network with the ambitious goal of creating a universal name service across all blockchains and DApps.
The first version of SPACE ID launched recently along with the .bnb domain. Team @sixdegree released a dashboard on the .bnb action so far, let’s take a look at some key metrics.
Over 23,857 have been registered by almost 9000 owners:
You may be aware of the recent “digit” ENS craze. It seems to have left its mark, as 42.6% of domains registered are purely digits……
There’s also a bias toward shorter names, with the majority of those registered being <6 characters, and 5 characters the most popular:
The average fee for registration is around $11, and the average registration period 1.3 years.
Right now users can register up to 5 each. Most took advantage of this, with over 90% registering more than 1:
There has also been a flurry of secondary sales, with 30.4k transactions and 15.5k $BNB in volume - almost $4.5m…..
The average price is around $150, but the highest was over $35k! Trading has been split fairly evenly across several marketplaces:
Check out the full dashboard for much more data on registrations and secondary volume.
@sixdegree also made a helpful tool to check for available names!
OFAC Sanctions Update
When the US Office of Foreign Assets Control announced sanctions against Tornado Cash one month ago, it caused shockwaves in the community and ripple effects that are still unfolding.
This week we got a very interesting dashboard by @ferdinand_hodl diving deeper into the topic.
The dashboard does not focus exclusively on Tornado Cash, but rather all OFAC sanctioned entities associated with a known Ethereum address.
There are 5 particular sanction programs relevant to our discussion. These are:
DPRK3
CYBER2
ELECTION-E013848
NPWMD
RUSSIA-E014024
You can read more about the details of the particular programs, based on various Executive Orders and regulations, here.
11 “entities” have been sanctioned, covering a total of 68 addresses.
Scrolling through the entities we find an array of shady characters who got themselves on the US Government’s naughty list.
There’s everyone from North Korean cybercrime collectives and ransomware peddlers to international money laundering groups and the architects of major crypto heists.
The combined balance in sanctioned addresses is significant at almost $170m of $ETH:
Along with 10s of Millions in ERC20 tokens…..
Of course the newest addition to the list is Tornado Cash. With 38 addresses, Tornado cash makes up over 50% of the total sanctioned.
Many of the Tornado Cash addresses are still active:
In fact, they are pretty much the only addresses who have been active at all since being sanctioned.
We can see some transactions from the wallets of Lazarus Group, a cybercrime organization affiliated with the North Korean State and Chatex, a Russian crypto exchange accused of money laundering.
But they’re dwarfed by the activity of Tornado Cash addresses with 14770 post-sanction transactions - of which 74% were withdrawals:
Activity on the sanctioned Tornado Cash addresses has slowed down since the peak one month ago, but it’s still going strong having driven an unprecedented boom in sanctioned wallet transactions in general:
This is an interesting dashboard that helps to clarify some questions on recent events. With today’s news that Coinbase will be backing a major lawsuit against the US Treasury, the saga of Tornado Cash may be far from over.
Check out the full dashboard for more.
Gaming NFTs on Avalanche
We’ve covered NFTs on Avalance previously, and now we’re going to look at a specific section of the market - gaming NFTs - through a new dashboard by @0xManny…..
Of 76.7k total, 23.8% are gaming users:
This is high, considering that out of 1607 collections, only 25 are related to gaming!
Gaming NFTs also represent 33.7% of all $ volume, almost $24m!
When it comes to gaming NFTs, NFTrade is the key marketplace on Avalanche. From only 22 collections, gaming NFTs account for almost half of NFTrade’s $ volume.
Kalao, Joepegs and Campfire all see minimal activity by comparison:
In conclusion, gaming NFTs seem to be a hit on Avalanche. Though only a small slice of overall collections, they punch way above their weight in terms of secondary sales volume and user participation.
Overall volume in $ terms is way down from early ‘22, but all other metrics look healthy.
Check out the full dashboard for more.
On-Chain Indexes
Personally managing your own investments, trying to pick winners and losers, is a daunting challenge for many.
This is why diversified funds that seek to track the overall returns of a class of assets, or a market, are so popular in the tradfi world - in which index funds are often recommended as a low-risk and passive option.
As you probably know, we have our own equivalents in crypto.
@index_coop released a dashboard tracking the overall market, so let’s take a look…..
On-chain indices were one of the earlier DeFi paradigms that found success and attracted capital, hitting a $200m+ combined TVL by early 2021.
By Late 2021 total TVL had hit $575m, but it dropped sharply into 2022 and continued to slide through the wider market downturn to under $80m today:
We can see that Index Coop is absolutely dominant in the market, thanks to several very popular indices.
Note below the two dominant indices which peaked in late 2021. One is the DeFi Pulse Index which allows holders of $DPI to gain exposure to a basket of DeFi assets. The other is ETH2x-FLI which gives 2x leveraged exposure to Ethereum. Both are Index Coop products:
Below the two leaders is an assortment of smaller indices, many of which are other Index Coop products like the Metaverse Index, icETH & BTC2x-FLI.
Given all this, it’s no surprise that Index Coop seems to have really dominated the on-chain index market.
Though it faced some competition early 2021 from PowerPool and Pie DAO, with market share dropping below 50% briefly, it has consistently captured 90%+ of the market from late 2021 onwards:
For more analysis on the crypto index market, check out the full dashboard.
More Dashboards
GN
Thanks for reading all, and as always a special thanks to all the Wizards featured for their great work.
Next week, it’s a big week. Team Dune (as well as 400+ Wizards) will be heading to Berlin for the very first DuneCon!
We will be streaming all the talks, and posting recordings afterwards. They’re going to be very much worth a watch.
Next week’s Dune Digest will be a shorter edition, and will share some of the hot takes and big reveals from DuneCon!
Have a great weekend and see you next week.