What is Optimism?

Optimism is a side chain that allows Ethereum to run faster. It is a layer 2, similar to Polygon, that runs along the side of Ethereum. It can support all the same Dapps, and is perfectly compatible with each Dapp on the Ethereum network. Optimism reports that as of a year ago, they have saved users $10 million in gas fees across 100,000+ individual transactions.

What makes it unique?

The Optimism side chain allows multiple transactions to be put in a singular block on the Ethereum network. Optimism is considered a rollup- a rollup is where a layer 2 takes transactions that would typically be put directly to the main chain, and writes them to its own series of blocks. The optimistic rollup is said to take an entire week to upload their block to the Ethereum mainnet. A week is a long time for a block to be sitting in purgatory, but the rollup claims to handle a greater amount of transactions per second than the mainnet, which will increase speeds and lower transaction costs.

What is Ethereum?

Ethereum is the second largest crypto in terms of market cap only to Bitcoin, and the largest proof of stake network. Ethereum is the largest decentralized blockchain with support for smart contract. They are the host to all "ERC-20" tokens, such as Doge, Polygon, and Decentraland. Ethereum was the first major blockchain to support smart contract, in addition to being one of the first to run a proof of stake network. Although the transition from proof of work took slightly longer than expected, users with greater than 32 ETH are able to stake their coins.

What are Stablecoins?

Stable coins are cryptocurrencies that aim to keep the value of a $1 USD. Examples of these include Tether, TerraUSD, STBL, and USDC. These stable coins run on a myriad of blockchains, including the Ethereum, Terra, and Algo blockchains. Each one of theses stablecoins has a different way of maintaining its "peg" to keep its value of $1 USD:

• Tether
  • Tether DAO promises to purchase 1 USD for every Tether token sold
    • Gives them the ability to back 1 Tether token with a corresponding USD
  • In some hot water: The company of Tether was found guilty for not actually purchasing the USDs as promised
• Terra USD
  • An algorithmic stablecoin
  • Burns $1 of Luna to mint $1 of UST
  • Terra recently purchased $1 billion of Bitcoin to add to its reserve of collateral
• TUSD
  • The national digital currency of Dominica
• USDC
  • Similar to Tether
  • Purchases 1 USD for every USDC token bought
  • Not entirely decentralized
    • U.S. Govt has ability to freeze assets if needed

Methodology

• This dashboard will cover several key metrics across several currencies, measured both in total and broken down by week. These will be measures of activity across the layer ETH network and the layer 2 Optimism network. ==Additionally, similar metrics will be measured when referencing NFT data on the Optimism network==
  • This Currencies will include:
    • Ethereum
    • USDT
      • Tether
    • USDC
      • Circle
    • TUSD
      • True USD
  • The following measures will be broken down by both week and total
    • TX Count
    • Distinct user count
    • Volume in USD
    • Avg volume
    • Median volume
    • Cumulative volume in USD
    • Min volume in USD
    • Max Volume in USD

TX Count by Week/Total

TX Count by Week/Total- Analysis

• The graph above depicts the transaction count by week, per currency
• The ETH token dominates the total transaction count between the layers from November 2021-June 2022, but quickly thereafter loses ground to USDC and the other stablecoins
  • ==One potential reason for this is that because of the bear market, users are less likely to trade speculative assets and are looking to move coins pegged to the Dollar more frequently, as they are the “safer” pick==
• TUSD has minimal traction, and is the least popular of the stablecoins
• USDC is the most popular coin on the layer 2, with 70% of the total TX volume when compared to the ETH token
• Overall, Optimism has relatively low TX volume compared to the mainnet

Count of Unique Users by Week/Total

TX of Unique users by week/Total- Analysis

• The graph above depicts the unique users trading each token per week
• Similar to the total TX count, ETH dominates the field in terms of unique users from November 2021-June 2022
  • After that, USDC takes over the lead
• ==Again, this is likely due to the volatile times of the bear market, and users wanting to have security in a constantly fluctuating field==
• There are barely any users using TUSD, as it is still building up its reputation among the stables
• USDC has the most unique users among the stablecoins, but USDT is not far behind

Volume in USD, by Week/Total

Average Volume in USD, by Week/Total

Volume in USD, by Week/Total- Analysis

• The line chart above plots the total volume in USD over time among the stables and the ETH token itself
• Interestingly enough, the volume traded in USDC outweighs that of ETH
• Even though ETH had more total transactions, it is nearly doubled in the amount in USD compared to ETH
• ==This implies that users are sending massive amounts of stables over the layer 2, especially recently==
• ==Even thought the bear market was under weigh in early February and we were very much in the brunt of it by April, USDC tx volume did not catchup until June==
  • ==However, the amount in USD surpassed that of ETH in May==
• Once more, a lot of this activity can be attributed to the bear market and consumer nerves
• Surprisingly, even though USDT is similar to USDC in TX count, it lags far far behind (by a degree of 10x) compared to USDC in terms of actual value

Average Volume in USD, by Week/Total

• The graph above plots the average (mean) volume in USD
• From May- October 2021, USDC had the largest average transaction amount in USD
• This is uprooted by USDT (another stablecoin)
• ==Shockingly, Ethereum actually has the smallest average transaction size out of all of the tokens being evaluated==
  • Again, the bear market likely is the cause as users seek stability in times of volatility
• Even TUSD in its small volume posted a larger mean transaction size
  • This may be because only fairly advanced users are trading TUSD while more recreational users are trading ETH

Median Volume in USD, by Week/Total

Median Volume in USD, by Week/Total- Analysis

• The graph above depicts the median Transaction size by token over time
• TUSD once again has a large average (median) transaction size, but this is due to the very small volume passing through the token
• USDC on the other hand has a large median transaction size, and has the highest count of weeks with the largest median, although USDT is not far behind
• ==ETH has a relatively small median transaction size, and his may be because it draws more recreational users exploring Optimism as an L2 compared to the stablecoins==
• Regardless, the relatively massive median transaction size implies that high-end or more advanced users are taking advantage of the bridge compared to more recreational users that are more often than not staying on the mainnet.

Cumulative Volume in USD, by Week/Total

Cumulative Volume in USD, by Week/Total- Analysis

• The cumulative number of users is slowly growing at an increasing rate over time
• USDC is growing at the quickest rate, which is fairly unsurprising as it is the most popular stablecoin of the bunch
• ==It is difficult to evaluate volatile tokens such as Ethereum in times of bear markets, when users are more concerned about securing their funds rather than growing their portfolio at the risk of destruction==
• ==The important takeaway is that the number of users is growing at an increasing rate- this is a fantastic sign for a layer 2, or truly any protocol==
  • This shows that adoption is underway, and new users are either sticking around or making larger transactions
• TUSD still has very little traction, which is to be expected of a new stablecoin, especially in a bear market

Min/Max Volume by Week/Total

Min/Max Volume by Week/Total- Analysis

• The visuals above depict the min/max volume over time of transaction sizes in USD
• USDC has the largest max volume and 3x the closest competitor, showing that it is the most trusted of the stablecoins
• TUSD has the smallest by a factor of 26x, showing it truly has the lowest safety rating, from a consumer perspective standpoint
• ==Each of the 6 largest transactions came months into the bear market==
  • Consumers tend to hold non-volatile assets in times of uncertainty, which makes sense
• There were a plethora of weeks where the smallest transactions were absolutely minisule
  • Under $1,000 as the smallest

Summary of Key Points

• The ETH token dominates the total transaction count between the layers from November 2021-June 2022, but quickly thereafter loses ground to USDC and the other stablecoins
  • One potential reason for this is that because of the bear market, users are less likely to trade speculative assets and are looking to move coins pegged to the Dollar more frequently, as they are the “safer” pick
• TUSD has minimal traction, and is the least popular of the stablecoins
• USDC is the most popular coin on the layer 2, with 70% of the total TX volume when compared to the ETH token
• ==Overall, Optimism has relatively low TX volume compared to the mainnet==
• ==Similar to the total TX count, ETH dominates the field in terms of unique users from November 2021-June 2022==
  • After that, USDC takes over the lead
• Again, this is likely due to the volatile times of the bear market, and users wanting to have security in a constantly fluctuating field
• There are barely any users using TUSD, as it is still building up its reputation among the stables
• ==Interestingly enough, the volume traded in USDC outweighs that of ETH==
• Even though ETH had more total transactions, it is nearly doubled in the amount in USD compared to ETH
• This implies that users are sending massive amounts of stables over the layer 2, especially recently
• ==Even thought the bear market was under weigh in early February and we were very much in the brunt of it by April, USDC tx volume did not catchup until June==
  • ==However, the amount in USD surpassed that of ETH in May==
• Once more, a lot of this activity can be attributed to the bear market and consumer nerves
• Surprisingly, even though USDT is similar to USDC in TX count, it lags far far behind (by a degree of 10x) compared to USDC in terms of actual value
• ==USDC has the most unique users among the stablecoins, but USDT is not far behind==
• From May- October 2021, USDC had the largest average transaction amount in USD
• This is uprooted by USDT (another stablecoin)
• ==Shockingly, Ethereum actually has the smallest average transaction size out of all of the tokens being evaluated==
  • Again, the bear market likely is the cause as users seek stability in times of volatility
• Even TUSD in its small volume posted a larger mean transaction size
  • This may be because only fairly advanced users are trading TUSD while more recreational users are trading ETH
• TUSD once again has a large average (median) transaction size, but this is due to the very small volume passing through the token
• USDC on the other hand has a large median transaction size, and has the highest count of weeks with the largest median, although USDT is not far behind
• ETH has a relatively small median transaction size, and his may be because it draws more recreational users exploring Optimism as an L2 compared to the stablecoins
• Regardless, the relatively massive median transaction size implies that high-end or more advanced users are taking advantage of the bridge compared to more recreational users that are more often than not staying on the mainnet
• The cumulative number of users is slowly growing at an increasing rate over time
• USDC is growing at the quickest rate, which is fairly unsurprising as it is the most popular stablecoin of the bunch
• ==It is difficult to evaluate volatile tokens such as Ethereum in times of bear markets, when users are more concerned about securing their funds rather than growing their portfolio at the risk of destruction==
• ==The important takeaway is that the number of users is growing at an increasing rate- this is a fantastic sign for a layer 2, or truly any protocol==
  • This shows that adoption is underway, and new users are either sticking around or making larger transactions
• TUSD still has very little traction, which is to be expected of a new stablecoin, especially in a bear market
• USDC has the largest max volume and 3x the closest competitor, showing that it is the most trusted of the stablecoins
• TUSD has the smallest by a factor of 26x, showing it truly has the lowest safety rating, from a consumer perspective standpoint
• ==Each of the 6 largest transactions came months into the bear market==
  • Consumers tend to hold non-volatile assets in times of uncertainty, which makes sense
• The visuals above represent the overall activity on the network in various metrics
• However, the clear and obvious takeaway is that Quixotic dominates the Optimism NFT market place
• That is in part, due to the recent nature of Seaport’s launch. They only began selling as a platform fairly recently- as in September of 2022 and well into the bear market
• Quixotic donminates Seaport in each of the metrics above: Sales count, sales volume in USD, distinct sellers, and distinct buyers
• ==However, most importantly, they appear to lack a correlation of any kind to the stables activity on the network which is rarely the case. Typically as stable activity increases, so does the NFT activity- but again, that is not the case here==
• There were a plethora of weeks where the smallest transactions were absolutely minisule
  • Under $1,000 as the smallest
• The average sales price in USD between the two platforms favors Quixotic, until Seaport burst on to the scene and quickly overtook Quioxotic in terms of average sales price per NFT per week
• The same happened with median price in the short run, but then Quixotic quickly took it back over
• Overall, the median sales price is roughly half of that compared to the mean
• ==This means that there is a slight skew in the data, and that the average price is being lifted up by the whale activity on the network. This further shows that the better representation of the average customer is actually the median, and not the mean as it is clearly not a normal distribution==

NFT Sales Data- Distinct buyers vs. sellers & sales count vs. sales volume

NFT Sales Data- Average sales price vs median sales price

NFT Sales Data- Distinct buyers vs. sellers & sales count vs. sales volume

• The visuals above represent the overall activity on the network in various metrics
• However, the clear and obvious takeaway is that Quixotic dominates the Optimism NFT market place
• That is in part, due to the recent nature of Seaport’s launch. They only began selling as a platform fairly recently- as in September of 2022 and well into the bear market
• Quixotic donminates Seaport in each of the metrics above: Sales count, sales volume in USD, distinct sellers, and distinct buyers
• ==However, most importantly, they appear to lack a correlation of any kind to the stables activity on the network which is rarely the case. Typically as stable activity increases, so does the NFT activity- but again, that is not the case here==

NFT Sales Data- Average sales price vs median sales price

• The average sales price in USD between the two platforms favors Quixotic, until Seaport burst on to the scene and quickly overtook Quioxotic in terms of average sales price per NFT per week
• The same happened with median price in the short run, but then Quixotic quickly took it back over
• Overall, the median sales price is roughly half of that compared to the mean
• ==This means that there is a slight skew in the data, and that the average price is being lifted up by the whale activity on the network. This further shows that the better representation of the average customer is actually the median, and not the mean as it is clearly not a normal distribution==