Decentralized Exchanges Dominate: Finding the ‘Real’ Value of a Crypto Network

Determining the ‘real’ value of a blockchain network or a blockchain-based dapp can be an esoteric business. It’s no secret that much of the crypto industry is built on nothing but speculation and hype–projects that wouldn’t stand a chance in the rest of the fintech world somehow find ways to flourish (at least temporarily) in the blockchain space.

Therefore, finding innovative ways to examine data is important for discovering the ways that the blockchain world operates. In an epic ‘tweetstorm’, Tyson Drake, the Head of Digital Marketing at UnitiWireless, compiled data to visually compare dapps (decentralized apps) with the number of transactions that happen on them.

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Finding Better Ways to Measure and Compare Blockchain Networks

It all began with a tweet from Meltem Demirors, Director at Digital Currency Group. Seeing transaction volume as an “imperfect measure” for how a blockchain network’s value or actual usage is calculated, she proposed that comparing utilization against speculation was a better way to examine a network’s worth, and sent out an open call for “other ideas for how to measure” blockchain networks.

i love public speaking because it forces me to examine my thinking and try to organize it into logical structure. here is one set of charts i think are pretty sexy – utilization v speculation. tsxn volume is an imperfect measure – other ideas for how to measure? pic.twitter.com/gBF8BkCwrs

— Meltem Demirors (@Melt_Dem) April 4, 2018

Drake found that in terms of transaction volume, decentralized exchanges represent the largest amount of the transaction volume on all dapps–46.6 percent over a seven-day period. Crypto game dapps (ie CryptoKitties) came in second place, accounting for 32% of dapp transaction volume. “Almost 80% of dapp transaction volume is related to trading (tokens or kitties),” he wrote.

3/ Some interesting observations (7day Tx volume). DEX represents 46% of Dapps volume, followed by crypto games accounting for 32%. Almost 80% of dapp transaction volume is related to trading (tokens or kitties). pic.twitter.com/2ke8m6reYZ

— Tyson Drake (@tysondrake) April 4, 2018

Drake dissected the data further from there. He discovered that of all decentralized exchange dapps, IDEX was responsible for the largest trading volume by far–50 percent of trading volume over the same seven-day period happened on the exchange. ForkDelta followed with 37 percent of trading volume.

4/ IDEX accounts for 50% of all DEX 7 day Tx volume. @0xProject has 4.65x more 7 day Tx volume than @KyberNetwork but is only 2x more network value on CMC ($276M vs $127M) pic.twitter.com/tSjpyZPluY

— Tyson Drake (@tysondrake) April 4, 2018

The crypto gaming and gambling markets were similarly dominated by one or two larger players. Cryptokitties dominated crypto gaming with 37.2 percent of all gaming transaction volume; Etheroll, a blockchain-based casino game, accounted for 90 percent of all transaction volume in the crypto gambling sector.

The open-source, communal nature of much of blockchain’s technological culture is inspiring. True to this spirit, Drake has made his data public, and it can be viewed as a Google sheet.

8/ Google Sheets data from anyone to view. https://t.co/IsjH2lyoRA

— Tyson Drake (@tysondrake) April 4, 2018