ON–013: DeFi

Coverage on Opyn, Handshake, Coda Protocol, Kadena and Polkadot.

Mar 19, 2020

ON–013: DeFi

Welcome to Issue #13 of Our Network, a weekly newsletter where top blockchain projects and communities share data-driven insights and advanced metrics.

This week our contributors deliver updates on emerging networks:

  • Opyn 🆕
  • Handshake
  • Coda Protocol 🆕
  • Kadena
  • Polkadot

Network Coverage

📌 Opyn

Contributors: Zubin Koticha, Co-Founder & CEO of Opyn

  • Opyn provides DeFi insurance and risk management built using protective put options. Opyn launched one month ago and has 1851 ETH ($234k at time of writing) collateral backing $130k of insurance. This is across three insurance markets: ocUSDC, protecting USDC deposits on Compound; ocDAI, protecting DAI deposits on Compound; oCRV, protecting y.curve.fi. The graph below shows the collateral locked up over time. (Source - Opyn dashboard by Tom Schmidt)
  • In the past month there have been 166 unique Ethereum addresses holding oTokens, protecting themselves against DeFi risks. (Source - Opyn dashboard by Tom Schmidt)
  • To provide protection, insurance providers put down ETH into a vault to mint oTokens. Insurance providers must maintain a minimum collateralization ratio of 140%. Given recent ETH price volatility, a decentralized response has formed with community members liquidating on the platform. Decentralized liquidators and the liquidation process is necessary for a robust protocol. The graph below shows the amount of collateral liquidated over time. In total $81,474.21 has been liquidated. (Source - Query by Matteo Leibowitz)
  • Right now insurance buyers and insurance providers buy / sell oTokens through Uniswap. This means that the price of oTokens is also determined by demand / supply on Uniswap. Uniswap liquidity is crucial to allow for buying and selling oTokens. The graph below shows Uniswap pool liquidity and activity for each oToken over time. (Source - Opyn dashboard by Tom Schmidt)

📌 Handshake

Contributor: Chjango Unchained, Handshake Enthusiast

Supply: The total circulating supply of HNS was hampered during the period of transfer lockups, reflecting only mining rewards, that is, until transfers were unlocked on February 13th, when the blockchain surpassed 2016 blocks. The subsequent and sudden increase in total circulatory supply jumped by 63%, increasing the total circulating supply from 3.7M to 237.8M, over the course of 24 hours.

The majority of those transaction activities are characterized by airdrop redemptions. While airdrop amounts were pre-allocated to recipients, the allocated amounts did not count toward circulating supply until airdrops were redeemed.

Fun fact: As to be expected anytime there is financial incentive involved, people will find ways to capitalize on those incentives. Knowing that a majority of the Handshake supply was pre-allocated to unique GitHub SSH and PGP key holders, certain individuals went so far as to try to buy SSH/PGP keys from GitHub users, causing a stir in GitHub land.

Transaction Volume: Since launch, Handshake has seen over 170 thousand transactions executed on-chain, a transaction volume far exceeding that of comparable decentralized naming systems.

The spike you're seeing in the chart indicates over 13 thousand transactions executed in one day. It so happens that, on that day, there was a spike in the number of name redemptions on the Alexa Top 100,000 that were expired. We think that this is attributed to a single person who scraped the top 100,000 list for expired names, bought them all at deep discounts on a regular domain name registrar, and collected the 503 HNS bounty per name redeemed on the list, making a ~33% profit per name if we assume 1 HNS = $0.20 and $3/name.

On Handshake, if you own a name belonging to the the Alexa Top 101-100,000, then you'd receive 503 HNS as an incentive for redeeming your name. If you own a name belonging to the Alexa Top 100, then your incentive is disproportionately higher. No pre-reserved Top 100 name has yet been redeemed.

Coins Burned: The total number of HNS that has been burned since mainnet launch is over 1 million. This represents the total number of HNS that's been spent on name auctions to procure the names that have become available so far (over 13,000 names have been opened for auction to date).

Name purchasing comprises of 0.4% of the total transaction volume, based on number of coins burned. The activity that comprises the majority of transaction activity would, again, be airdrop redemptions.

  • Hashrate: The network hashrate has risen to over 50.96 TH/s since we last visited Handshake on Our Network. That's a 162% increase in hashrate since a month ago. If the network hashrate continues on this trajectory, it would only need to grow 3 times more in order to catch up to the network hashrate on Ethereum.

Profitability: Handshake is currently the most profitable coin to mine with GPUs. It's currently 87 times more profitable to mine than Ethereum and 10 times for profitable to mine than Bitcoin.

Estimated Daily Revenue for 1 GH/s ≈ 5.53459012 HNS ≈ $ 0.7973 according to F2pool's mining profitability calculator.

📌 Coda Protocol

Contributors: Claire Kart, Head of Marketing & Community

  • Coda’s become one of the largest layer 1 testnets by number of unique users since launch in July 2019. Currently, there are 400+ users, growing 1.5-3X with each testnet release. 20% of network participants are running a node for the first time, growing the overall ecosystem of node operators. The easy of use & maintenance, quality of technical documentation and community-based support for new users have been the main drivers of both overall growth and first-time operators. This broad participation will increase decentralization at launch.

  • The most recent testnet release, 3.1, saw 300+ users stake and become block producers. 3x the size of the prior stable release. This influx of new users uncovered critical bugs, broke the testnet and aided the team in identifying where to focus future development. The testnet is currently down and the team is addressing the identified issues.

  • The last stable testnet, “Winter Special”, was conducted from Dec 2019 - Jan 2020 and achieved several milestones that advanced the stability and health of the network. These include:

    • 10+ week live network with over 12,000 blocks on the longest chain

    • 150,000+ SNARKs were accepted in blocks. Most successful SNARK worker sold over 20,000 SNARKs to block producers on the SNARKetplace

    We started to see users specializing their skills sets between block production and SNARK work, suggesting that users are exploring the different network roles on Coda, the incentive mechanisms, and finding ways to optimize their performance and results. Only one participant was able to become a top performer in both categories. As we progress towards mainnet, more of this type of behavior will be measured and analyzed.

  • The team recently published a new mental model, ScaDe (Scalability-per-unit-of-Decentralization) to guide choices during the design & optimization of blockchains. From the analysis, it appears that the industry has hit a frontier in how powerful we can design these trust machines, and a new model of optimization is needed. The hypothetical mapping of the mental model matches fairly closely with real world data. The team uses this model to consider how certain choices will impact the performance and stability of our network.

📌 Kadena

Contributor: Tony Pham, Head of Marketing at Kadena

  • Kadena's hash rate has grown considerably by 3x to consistently ~100 TH / s. A couple weeks ago, the hash rate was averaging 30-40 TH / s.
  • Since our last update about 6 weeks ago, over four million blocks have been mined on Kadena's public network, a 33%+ increase.
  • There have been 75,000 successful token transfers on the Kadena network. That is a 20% increase in the number of transactions taking place since the last update. Below is a visualization of the transactions:
  • Block time for KDA remains consistent at ~3 seconds, making Kadena among the fastest public chains in the market. (For context, Ripple runs one block about every 3.5 seconds.)

📌 Polkadot

Contributor: Bill Laboon, Technical Education Lead at Web3 Foundation

  • Although Polkadot mainnet has not been released yet, our canary network, Kusama, has now been running since August 2019. A canary is an early and unaudited release of software; it is not a testnet. Kusama currently has 378 nodes running and registered with our telemetry server, with 180 validators producing and finalizing blocks. The number of active validators was recently increased from 160, by vote through on-chain governance. Additionally, 520 nodes are running other Substrate-based chains, which can be parachains on Polkadot or Kusama. The latest statistics for all chains can be found on the Polkadot telemetry server (link).
  • As a nominated proof-of-stake network, the security of the network can be measured in terms of the amount of economic power backing the validators. Currently, the validators on Kusama are backed by a total 3.201 million KSM, or approximately US $4.7 million. This has more than doubled from January, when less than US $2 million worth of KSM was staked.
  • One of the more interesting aspects of Polkadot (and Kusama) is the ability to do an on-chain upgrade by propagating a new runtime over the network. This is because the entire runtime is a blob of Wasm code, which is executed by the Polkadot Host software running on the node. After on-chain governance votes on new runtime code, the Wasm blob can then be sent to running nodes. Twenty-two on-chain runtime upgrades have now occurred on the Kusama network, showing the feasibility of this approach.

During Kusama's run, mean block production time has, with one noticeable exception (detailed below), stayed remarkably close to the target of 6 seconds per block. In fact, over the last two weeks, the most the daily mean has strayed from 6 seconds was 6.22 seconds on 9 March. Block production has been steady even during higher-than-expected network usage and runtime upgrades.

You will notice a spike in block production time in early January. This was an intentional blip where the timestamps were artificially sped up to fix a problem with the network Gav's post for details. (Data courtesy of Polkascan.)

  • Web3 Foundation's grants program has continued to review grant proposals and has accepted almost 100 different projects, in fields ranging from new development tools and runtime modules, to wallets and bridges to external blockchains, and even basic cryptography. A full list of accepted grant applications can be found here.

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About the editor: Spencer Noon leads investments for DTC Capital, a fundamentals-focused crypto fund. He actively tweets about on-chain metrics.