Research Questions

1. Query the number of application transaction calls per block, per day

2. Number of wallets making application calls

3. Then do your own analysis that shows whether there is more or less application usage on Algorand in the first half of 2022 compared to the 2nd half of 2021.

Method

Data Source Table - algorand.application_call_transaction

Algorand has a new block every 4.5 seconds, which leads to more than 19,000 blocks per day.

Therefore, the primary analysis will group the daily application calls and count the number of transactions, number of wallets and number of distinct wallets since July 2021.

Analysis

The next section will show the number of application calls per block in July 2021 and June 2022.

Bear in mind that this is only a snapshot of 10 blocks during those time periods.

Conclusion

Application call transactions rose substantially when the first DEX (Tinyman) launched. The period between July 2021 to October 2021 had very low applications on Algorand, as the only DeFi dapp back then was Yieldly with minimum functionality.

The peak was recorded on Jan 2nd, following the Tinyman exploit and the removal of liquidity from the DEX.

Another outlier was in February, when two more DEXes (Algofi and Pactfi) launched.

Finally the last outlier was in early May, possibly related to the UST depeg incident on Terra.

1. Application usage increased dramatically in the first half of 2022.
2. The growth was expected based on the trajectory during the second half of 2021 and the announcement of new dapps launching in early 2022.
3. There are some signs of slowing down in the last couple of months, reflected on the number of distinct wallets and daily application calls.
4. Algorand still has a lot of potential until it reaches its theoretical capacity limit of 1,000 transactions per second.

Number of wallets has the exact same trajectory as the application calls with the same outlier peaks.

June 2022 has a 10x increase from July 2021.

However, looking at distinct wallets is more accurate to evaluate user growth.

Even though application usage exploded in the first half of 2022, number of distinct wallets increase at a much lower rate.

Number of distinct wallets calling applications increased slightly based on these samples.

Applications per block also rose, probably because some smart contracts (e.g. Algofi) have plenty of application calls in a group transaction.

This obviously might change in the future when the Algorand Virtual Machine is updated to TEAL 6.

Definitions

DeFi = Decentralised Finance

DEX = Decentralised Exchange

dapp = decentralised application

UST = algorithmic stablecoin pegged to the USD $