Unique Users on Algorand
Q46. Intermediate Algorand Bounty by Flipside Crypto
- Compare the number of unique wallets that have sent a transaction since February 1st on Algorand vs Solana vs Ethereum vs Terra.
- How does user adoption seem to be trending for Algorand compared to these other major chains?
- Does it appear that market conditions are slowing down growth or activity on the networks?
The structure of this dashboard will be the following:
- Related algorand metrics. (introductory part)
- Benchmarking analysis. (main body)
- Sensitivity Analysis. (longer timeframe)
- Conclusion
The general approach will follow another bounty submission (Question 37) by Kaskz. All credits belong to the original author, as the SQL code was adapted from that analysis. The objective of his/her dashboard was to explore the activity of unique wallets for Ethereum, Solana and Terra. Therefore, that would be the starting point for the benchmarking of the 4 chains.
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- The goal of this area graph is to examine whether a different time period would result in different insights.
- In addition, Q1 2022 just ended, so it would be interesting to have a historical performance of the 4 chains, without any daily updates.
- Same pattern is observed even if we expand the date range to cover Q1 2022.
- Algo was busier in January, compared to February and March activity!
- There were two sudden spikes, around mid February and early March, which quadrupled and doubled the number of wallets respectively.
- The median value is below 80,000 unique wallets transacting per day. The median is a better metric than the average in this case because we want to exclude the outlier values.
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- Algorand is a fast blockchain (less than 5 seconds block finality) with very low fees.
- The daily transactions are over 1.5 million in February and March.
- There is a downward trend in the daily transactions after the peak on Feb 21, 2022.
- This area graph plots the number of unique wallets that have sent a transaction since February 1st on Ethereum, Solana, Algorand and Terra.
- Although Eth is still the undisputed dominant layer 1 in terms of unique users, the other chains are closing the gap.
- The market conditions (lower prices) are not slowing down growth on the analysed chains!
- The line graph below is a better visualisation to observe user adoption on each chain.
- The number of unique wallets sending daily transactions on Algo is not as stable as the other 3 blockchains.
- On Jan 12, Algo ranked first for the first time, surpassing Eth wallets by about 20k. This sudden spike was not consistent though. The second time that this occurred was on Feb 21 2022.
- Ethereum is consistently ranked first, and Solana second.
- Terra might have the lowest number of unique wallets, but it has the best tokenomics with the burn mechanism and the high yield of UST deposits that boost Luna's price even during bear markets.
- Further analysis is required to quantify the relationship between chain activity and price on Terra, identified by the analyst Kaskz in an older submission.
- Finally, better market conditions will probably accelerate user adoption. Having said that, the current market conditions did not slow down network activity significantly.
Since this is an Algo bounty, let's visualise some Algo metrics separately first. These graphs will update automatically once a day.
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- Ethereum's number of unique users transacting is relatively stable (400k wallets) because is the most mature chain. In March, it was performing better than February, reaching 515k wallets on March 10.
- Solana is gradually increasing the number of wallets. The daily median number is close to 200k wallets. It had a sudden peak at the same time as Eth on Mar 18, almost flipping it based on this metric.
- Algorand's unique users metric fluctuates greatly over time, unlike the other 3 chains. This could be an indication that some dapps are stress-testing it before onboarding users or activity is recurring at longer intervals.
- Both Terra and Algorand have less than 100k unique wallets transacting daily on average.
- The overall trend is similar for all the analysed chains, but they have different all time high peaks.
- Algorand has 2 outlier periods, while Solana only has 1.