GM
Welcome to Issue #57!
First, some quick news.
Are Airdrops Broken?
This week we published our first Wizard Research article by @jhackworth.
The piece is a postmortem of Uniswap’s 2020 airdrop.
It follows airdrop recipients through the intervening 2 years, analyzing their behavior to determine what went right and what didn’t.
It concludes with a wider critique of the airdrop model, and offers interesting lessons for the industry.
A great piece of data journalism by @jhackworth, check it out.
Meetups
Yesterday we held meetups in Singapore & Berlin. If you came, thanks, it was great to see you!
We have more coming up in London, NYC, Lisbon & Bangalore - get the details and RSVP here.
BNB Bounties
Some juicy new bounties for BNB are live. All the tasks involve casting spells for either NFT.trades or DEX.trades.
If you’re up for it - check them out.
Now, let’s get into this week’s data……..
Wrapped Bitcoin
According to a legendary dashboard by @eliassimos there are over 250k Bitcoin “on” Ethereum.
$BTC holders turn to various platforms and convert their assets to $wBTC, $tBTC, $renBTC and other tokens that can represent their assets on the Ethereum network.
$wBTC is by far the largest. Let’s go deeper with a dashboard by @Messari_Jack….
The current $wBTC market cap is over $3.73 Billion:
This is over 84% of all Bitcoin on Ethereum, 230.65k $BTC in total.
Why do holders want their $BTC on Ethereum?
One of the perceived problems with Bitcoin is that you can’t “do” much with it. You can hold it, or send it to somebody, but not much else.
There is no native financial infrastructure to put it “to work” like there is on Ethereum. With $wBTC though, users can deploy their assets in the wild west of decentralized finance.
Since 2020 wrapped Bitcoin has been used to interact with Curve, Maker, Aave, and many other platforms:
Wrapped Bitcoin is an ERC-20 token pegged to the value of $BTC.
The tokens are “minted” when a user makes a request to a merchant, who then makes a transaction with a custodian who sends them $wBTC in exchange for the $BTC which will be held in custody.
When the user wants to redeem their $BTC, the merchant will initiate a “burn” transaction with the custodian, returning the original asset and burning the wrapped token.
According to a dashboard by @21shares, the $wBTC supply has dropped by more more than 55k since mid May:
In the intervening 6 months we’ve seen some of the biggest burns in history. In mid July for example, 9550 $wBTC were burned on a single day:
Who’s doing all these burns? When we look at the addresses we see a now notorious name, Alameda research.
They were previously a $wBTC merchant (since quietly removed), and burned upwards of 20k $wBTC since Summer, including $52.7m’s worth just 2 weeks ago.
Other major merchants include also infamous 3AC, along with some other well-known names like Kyber & Coinlist:
In the context of all this, $wBTC has been slipping from its peg for the past 2 weeks, ever since the FTX blowup:
This is all worrying in light of the recent chaotic events in the markets.
The liquidity being drained from Ethereum’s DeFi ecosystem is significant - $250m+ over the past month:
If holders start getting spooked en masse by the peg deviation it could accelerate as part of the broader FTX & Alameda contagion.
The flavor of the day on crypto Twitter is self-custody.
Platforms like $wBTC, as safe as they may be, require a degree of trust when trust is in short supply and as Bitcoin holders de-risk into cold storage.
Perhaps this is all overblown though?
As always, you need to DYOR and investigate yourself. These dashboards are a great starting point:
Perps on Arbitrum
Arbitrum seems to have become one of the go-to destinations for DeFi derivative trading.
Several exchanges that focus on perps - futures contracts without expiry dates - are vying for market share like never before.
Let’s investigate with help from a dashboard by @defimochi…..
The dashboard covers the top 5 - GMX, Mycelium, Rage Trade, Mux Derivatives, and Cap Finance.
Combined, these 5 have seen over $11 Billion in volume, and 51k total users.
By far the largest and most well-known is GMX, which dominates the market with >90% of volume:
GMX have also captured >90% of all fees, totaling almost $13m for the 5 platforms combined.
Competitors are emerging in recent months though.
Rage Trade is focused on $ETH trading, allowing users to go long or short with up to 10x leverage and claiming unprecedented liquidity.
In 3 months Rage Trade has gone from nothing to 30%+ of perp users on Arbitrum:
It isn’t in the same galaxy as GMX when it comes to trading volume though with <1% of the total.
On the other hand, relatively new leveraged trading platform Mux is seeing impressive volume growth, in recent months frequently accounting for >12% of volume and a similar share of fees.
Total volume also hit ATHs in early November as traders sought to profit from market volatility in the wake of the FTX meltdown:
Although GMX is still the undisputed king by a wide margin, the perps space is heating up and so is competition.
There’s a lucrative pie to compete over, with GMX pocketing over $400k in daily fees over the past 30 days:
Perps are a key DeFi primitive we’ve seen emerge over the past few years, and it will be interesting to see how they evolve.
Check out the full dashboard for more….
NFT Marketplaces - the smaller fish
We talk a lot about the giants of the NFT marketplace world like OpenSea, X2Y2 & Magic Eden.
These get all the attention, but a level down there’s a whole ecosystem of smaller platforms vying to enter the big leagues.
In an interesting new dashboard, @sealaunch analyses these “up and coming” marketplaces. Let’s review.
Overall, 30-50% of total users have abandoned these platforms since late summer.
The platform with the highest churn seems to be Element, which has lost ~80% of its users since the end of August. It’s a similar story for Sudoswap:
There’s no clear leader in terms of active users.
Sudoswap, Element & ENS.Vision are on top, but the market is fragmented and no single platform is head and shoulders above the others.
It’s a similar case with sales, though Sudoswap still has some edge despite losing serious ground over the past 3 months:
That’s not to say that they necessarily are competing with each other. Some serve niche markets.
In volume terms, the pack is lead by cryptopunks.app - which typically accounts for >50% of the total.
This app, as you might guess, only sells Crypto Punks.
It typically does 500-1000 $ETH in daily volume, outshining the rest by a significant margin even though its share of total sales is generally <1%.
No surprise when you consider the cost of a punk.
So who are the main winners and losers over the past 3 months?
Element is down bad, seeing sales evaporate since mid October:
Sudoswap hasn’t been doing too well either.
It had a lot of hype in late summer, and is an interesting project, but the platform has seen a consistent decline in key metrics since:
ENS.Vision, a marketplace dedicated exclusively to .eth domains, has seen a sharp decline across the board too.
Moving up the spectrum, Foundation has performed OK considering the macro conditions, and has even seen an increase in sales through November, which nevertheless remain very low in absolute terms.
The surprising success story is Coinbase NFT, which has seen growth in users, volume & sales through November:
Coinbase remains, in NFTs at least, a small player with <200 daily users/sales and rarely cracking 10 $ETH in volume.
Another recent success story is sound.xyz, but more on that in the next story.
Overall, the small fish are suffering just like the big ones.
With a few minor exceptions, these platforms have taken major hits over the past few months. For as long as the bear market lasts, their focus will surely be on survival……
Check out the full dashboard for more.
Sound.xyz
Even in the depths of the bear market, some players continue to do well and hit new highs.
One such player is sound.xyz, the most well-known music NFT platform, covered in a new dashboard by @nicoelzer. Let’s take a look.
Sound allows artists to debut new music and monetize it through NFTs. So far over 28k music NFTs have been minted, generating almost $3.5m in primary volume:
The platform is pitched to collectors as a way to more directly support up-and-coming artists, and to own part of their work in a unique way.
5995 of them have bought an average of 4 songs each!
New mints have been thriving over the past few months, hitting ATHs in October & November with almost 15k mints in total:
October & November were also the biggest 2 months on record for new drops, with 284 new songs released.
That’s more drops than the previous 9 months combined:
Though activity is higher than ever, volume is still way down from the bull market highs.
It is higher than any time since May though, with around $200k in monthly primary volume over the past 2 months.
Secondary market volume has shown a similar pattern of recent recovery.
November also brought the most new users to the platform ever - 1.26k - and total active wallets have never been higher.
Overall Sound has seen the best month ever by many core metrics. They seem to be continuing to build through the bear and are trying to position themselves for the long-haul.
An interesting case of bucking the general macro trend and going against the grain while other NFT projects are flailing.
Check out the full dashboard for more.
NFTperp
A new platform - nftperp.xyz - has launched a perpetual futures DEX for NFTs on Arbitrum.
The platform will allow traders to go long or short on NFTs with up to 5x leverage, speculating on the future floor price of specific projects.
Today they launched in private beta, but we can see what has been going on thanks to a new dashboard by @conelohan…..
44 degens have traded on the platform so far, making 96 trades and generating almost 37 $ETH in volume:
Most of that volume so far has come from the BAYC pool, with 10.5 $ETH from Punks:
There isn’t much more to say about the stats yet, but we look forward to a full dashboard once it’s out of beta.
This is interesting as part of the wider trend of NFT financialization, and could be popular with speculators in volatile markets.
Check out the full dashboard for more.
More Dashboards
GN
Thanks for reading and of course - a special thanks to all you Wizards for your amazing work.
Have a great weekend, and we’ll see you again next week for more data, dashboards & Wizardry.