One of the biggest questions most founders have in whats seems like a bull-market is often “ Am I doing something wrong”. It looks as though money is falling out of the sky on everyone with a dot finance domain and many founders building on sound economics often get lost in the hubris. There is also a data-problem when it comes to reporting on blockchain financing. A large chunk of the figures reported for total funding is over-represented due to ICOs, and then there are deals involving large enterprises that use blockchains as a small part of their tech-stack. Keeping this in mind, I spent a considerable amount of time cleaning out data from non-identifiable venture rounds and large-firms with no clear connection to blockchain. For this piece, we will look solely at Pre-seed to Series E venture rounds and not include ICO data. The reason for this is simple. Equity markets are a sign of what could eventually be the public token markets. Take Uniswap for instance. Before it could be the darling of the industry for retroactively dropping tokens and building a very sticky product, the team raised from investors. A similar dynamic is visible across multiple successful network launches. …


I wanted to see how traditional credit scores are coming to DeFi today. The challenge with DeFi today is that almost nobody outside the ecosystem can use it. Individuals without tokens cannot deposit collateral and thus cannot get a line of credit. Similarly, those without digital assets cannot offer it on platforms like Curve to generate yield even when the returns are in multiples of what a bank offers. People have to care about the industry if we are anticipating a generation of large firms from the industry. Lowering the barrier to entry has been a common tactic in financial markets. Mortgages on housing and car ownership are what has fuelled consumption in much of the developing world. For blockchains to be able to replicate the same success they need to be able to intermingle with the traditional ecosystem. However, in doing so they may become vulnerable to censorship and surveillance. …


I dug into stablecoins for the first time in December 2019. If you had told me then that the market-supply of tokens in the space would cross $10 billion and user-count could be close to 100,000, I might have written you off as an optimist. And yet, here we are in June 2020 looking precisely at that at the late stages of a pandemic. As of writing this, combined stablecoin market-cap of the seven most significant projects is at $10.5 billion (across chains).

In writing this piece, there are a few considerations I made

  1. You will often see me offer two separate charts for Tether and other coins. This is because Tether is in a league of its own and using logarithmic charts may not do justice on shedding light on leading contenders in the non-tether group of coins. In making this piece, except the market-cap, all data is derived from the on-chain activity on Ethereum. I have discounted Omni, Tron and Algorand for the time being due to their nascent ecosystem and aim to dive into them at a later point in time. …

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March 2020 may have been the worst month to be in blockchain-related ventures since February 2014. The last time I had observed so much fear and pain, Mt Gox was going down after months of reported insolvency. Ironically, six years later, another exchange (Bitmex) played just as crucial a role in the price of Bitcoin swaying drastically. We will not be looking at token prices in this piece. We stand at an odd juncture, where there are reasons to be bullish on Bitcoin’s price given that halving is round the corner. But the macro-economic backdrop could not possibly look uglier. And that is what is truly in the minds of every founder I know. While venture capitalists may proclaim that they are “open” for business, deal closures announced are the only real measure of what is really going on in the ground. …


Bitcoin’s rising price has often been both a boon and a bane. A boon because it incentivises individuals to connect to the network. A bane because it inevitably forces individuals to look at a single metric when it is far more than “number go up, number go down”. It reduces a complex financial ecosystem to a bubble economy where speculation looks like the most significant use-case. This post isn’t an argument for a better comparison of digital assets against traditional ones based on the growth stage of the asset. It merely looks at the numbers we ignore when we discuss Bitcoin. When Satoshi Nakamoto wrote in 2010 that Wikileaks had kicked the hornet’s nest when they integrated Bitcoin, he may not have foreseen the extent to which it was true. …


Note : If I were to be idealistic, I’d likely have only DAI in this data-set. However, markets don’t really care about my idealism. As much as there is controversy around USDT today — fact remains that it is a crucial component of the stablecoin ecosystem. I would appreciate it if conversations that stem from this piece does not go into “is tether a stable coin”. My honest stance on the matter is that in the absence of verifiable audits, it is not.

Stable coins are what happens when crypto finds product-market fit. A pro-longed winter in 2018 combined with increasing scrutiny from banks around the world set the stage for adoption of stable tokens, which in turn has fed into the growth of the broader DeFi ecosystem. About a quarter trillion dollars had been moved on-chain through stablecoins when I began work on this piece (early November). However, little literature was available on who leads, to what extent and the nature of user-behaviour on these chains. What followed has been a month-long exploration of data from Token Analyst, Santiment and loads of procrastination as I struggled with the idea that currency kept in a central bank somewhere, represented as a token on-chain has seen the most traction in 2019. (Discounting DAI ofcourse). This is my attempt at summarising what has been going on in terms of volume and user behavior within stable coins. …


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Photo by Craig Sybert / Unsplash

Decentralised applications are hailed as the pathway to massive adoption. It seems the hype around much of them has been slowly dying out. The present status of DApps are very similar to the state of the internet before the launch of Netscape and sadly enough, Brave’s rapid growth may not be compensating in terms of bringing onboard new users to the broader DApp ecosystem. I have been wondering whether DApps are dying a slow but definitive death much like other trends like ICOs. As the token ecosystem transitions focus to new trends like DeFi, staking and DAOs, it may be worth looking at where the previous “hot thing” in town has been trending towards.Data Source : Dapp.review I have not included Blockstack in this. …


Blockchain Founders Raise over $822 million by Q2

Despite several strong indicators in both network activity and user growth price continues to lag well behind the highs of 2017–18. The ecosystem is more robust and becoming increasingly professionalised with several new institutional participants

All on-chain indicators hint at what is about to come

Markets and the weather hold one common attribute — they function in cycles. The token economy has suffered a prolonged winter throughout 2018 to Spring 2019. However, things have been looking increasingly positive throughout the second quarter of 2019. Whilst the price of tokens are already up roughly 3 times, analysis of on-chain activity indicates that a full recovery may be imminent. Metrics such as transactions, hash power (dedicated to mining) and the number of new wallets opened have begun showing recovery signs similar to highs witnessed during the bull run of 2017. …


Peer-to-peer electronic financial instruments

Bitcoin is a peer-to-peer electronic cash system. DeFi is a peer-to-peer electronic financial instrument system and refers to projects that are using cryptographic tokens and blockchains enabling anyone to issue, transfer and own financial instruments. The maturity of the Ethereum network has resulted in a slew of projects that are issuing not just ERC20 tokens but all types of financial instruments. Bitcoin emerged as an alternative to the financial system but the lack of features (which is a feature in itself) — has made it difficult to create complex financial instruments on it. But the smart contract functionality on Ethereum led to the relatively easy creation of complex financial instruments. While the Lightning Network does open Bitcoin up to micropayment use cases, realistically it is unsuitable for the sorts of instruments that can be created using full smart contract functionality. …


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If you were born after 1995 and grew up in a developing economy, odds are high that Facebook has encompassed the vast majority of your digital life. The platform hit a billion users right around the time you were 13 (2008), leveraged network effects of Mobwars and Farmville to keep a younger demographic hooked and converted to ownership of Whatsapp and Instagram as they grew older. For many of us — Facebook provided the means to connect to friends far and wide, hold conversations that’d otherwise be impossible and easily connect to influencers that were continents apart. In a pre-4G world, where e-commerce had not taken off, Facebook was the internet for so many of us. And it remains to be the case. If not on the platform itself, through Instagram or Whatsapp, Facebook owns much of the world, by its most private conversations and intimate moments shared in pictures. Zuckerburg is simultaneously the brand ambassador of a digital nation whose powers remain unchecked and the CEO of one of the fastest growing companies of our times. His board struggles to tame him, his regulators fail to understand his business model and his competitors crawl far away in the distance as the corporation sustains its growth consistently. …

About

Joel John

Senior Analyst at LedgerPrime. Board advisor, sporadic writer, bibliophile.

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