Singapore, Jan. 27, 2022 (GLOBE NEWSWIRE) -- Today, Nansen, a blockchain analytics platform that analyzes 100M+ labeled wallets and their activity on Ethereum, Polygon, Avalanche, and numerous other L1 and L2 blockchains, released its 2021 State of the Crypto Industry Report. The company’s first release of this kind includes the most notable trends and insights across the cryptocurrency, NFT, and DeFi markets over the last year. It highlights statistics and movement within key sectors of the blockchain industry as well as an outlook for 2022 from Nansen Co-Founder and CEO Alex Svanevik. Nansen has plans to continue releasing reports of this nature, annually and periodically with a focus on different sectors.
Ethereum, with its first mover advantage, remains the biggest blockchain by TVL and market cap. Uniswap was the dominant application on Ethereum, responsible for >30% of the gas consumed by the top 20 entities.
Many Layer 1 and Layer 2 blockchains have come up with innovative ways to solve problems regarding blockchain decentralization, scalability, and security, and are fiercely competing with each other for market dominance. Notable statistics for other supported blockchains are as follows:
Polygon facilitates 300% more transactions than Ethereum, but the daily gas paid (in USD terms) is often less than 0.5% of gas fees paid on Ethereum.
Binance Smart Chain’s daily active addresses are the highest among all L1s. At its peak in late November, the daily transactions on BSC hit 1,345% of Ethereum’s.
Fantom Foundation announced a 370M FTM grant program in September 2021, daily active addresses on Fantom increased 440%, and TVL went from ~$1B to over $6B in November.
DeFi grew 1,120% in 2021 based on TVL (Total Volume Locked).
After the meteoric rise of DeFi in 2020, the momentum continued into 2021. Not only has DeFi grown about 1,120%, but also in terms of stickiness due to the maturity of stablecoins as well as the reliability of battle-tested dApps.
Nansen also followed the moves of “smart money” and highlighted a few valuable moments, including one where DeFiance Capital received $MUSE prior to the official funding announcement, followed by a doubling of the token price upon public launch.
Stablecoins value distribution showed that whale wallets with >$1M made up >50% of stablecoin volume through 2021, which has been steadily increasing.
Increased regulatory scrutiny into Tether in 2021 has eroded USDT’s dominance. In 2021, USDC seems to have found its niche as the preferred stablecoin in decentralized trades, closing up on USDT as second in stablecoin market cap on Ethereum.
As the NFT market grew, the end of 2021 resulted in a total sales volume that surpassed 4.6M ETH (17B USD).
NFTs gained major traction in 2021, growing from a niche use case to dominating blockchain platforms. They became popular as profile pictures on social media, with celebrities such as Jay-Z, Reese Witherspoon, Snoop Dogg, and Steph Curry using them as their Twitter profile pictures.
As the NFT market grew, so did the pace of investment – a dynamic market emerged. Minting as a form of initial NFT sales became one of the most innovative, fun, and complex parts of this new market. 1.2M wallets participated in directly minting NFT projects in 2021.
DAOs gained popularity, with ConstitutionDAO setting records by raising $47 million USD in the form of ETH from over 17,000 participants, showing the power of people coming together for a common purpose.
DAOs were created as decentralized autonomous organizations that range from purely social platforms like token-gated Discord servers such as Friends With Benefits to purely investment driven platforms such as MetaCartel. To find signals of long term value appreciation, Nansen took the approach of analyzing the evolution of a DAO’s native token price over time.
Axie Infinity was the most popular play-to-earn game, which led at an annual revenue figure of $1.3B. At its peak on August 6, 2021, Axie generated $17.5M in just one day.
Gaming offers a compelling use-case for NFTs - it allows players to truly own their in-game items, enjoy the value accrual of the in-game economy, and at the same time, earn a living by playing. Developers are given the privilege of creating a vibrant virtual economy, in which they stand to profit enormously from if carefully crafted.
With Nansen’s Smart Money wallet labels, you can track what the best DeFi and NFT players in the space are up to in real time.
On average, Smart Money outperforms the rest of the market. With Nansen’s wallet labels and smart alerts, users can follow the activity of influential crypto investors, trading desks, and other entities in the space.
To date, institutional investors have primarily gained cryptocurrency exposure through ETFs and derivatives.
While institutions have shown significant interest in investing in cryptocurrencies and DeFi markets in 2021, there are still major obstacles preventing further institutional adoption. For instance, investment mandates often limit participation from traditional finance institutions, as their investments must meet certain criteria, all of which are based on traditional financial instruments.
Outlook to 2022, provided by Alex Svanevik, Co-Founder and CEO of Nansen
“Crypto lending/borrowing and options are expected to see increased adoption by institutions as more of them are exploring the crypto markets. While few companies will hold BTC directly on their balance sheet like Tesla or MicroStrategy, the opportunity to pay using crypto might finally make it mainstream. Moreover, we expect crypto ownership from institutional investors to boom in 2022, possibly flipping that of retail.”
Nansen is a blockchain analytics platform that analyzes 100M+ labeled cryptocurrency wallets and their activity to provide trading firms, hedge funds, and VCs with insights into the crypto and NFT markets. Nansen is funded by a16z, Coinbase Ventures, and Accel, among others. Please visit www.nansen.ai to learn more.
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