ON–030: DeFi

This is issue #30 of Our Network, the free newsletter about on-chain analytics that reaches nearly 3000 crypto investors every week.

This week our contributors cover Web3: Numerai, Handshake, ETH Gas Markets, Basic Attention Token, and Chainlink.

Numerai’s Erasure protocol, a series of Ethereum contracts designed by the company to facilitate the on-chain staking of predictions and machine learning based signals, has seen sustained growth over the last 6 months. The recent 200k peak in $NMR staked is a direct result of iterations on the weekly data science tournament where real data scientists stake on the quality of their artificial intelligence derived market predictions.

The longevity of the data science tournament has extended to 210 rounds and is well established, with an average 1,500 unique predictions submitted weekly. Numerai’s future expansion is likely to be linked to its other distributed applications, one of which is Erasure Bay, their Twitter integrated request fulfillment platform that went live on Mainnet in mid-March, and the reason for the emergence of staked $DAI on the graph. (Source)

• Through the Erasure Bay platform users can make requests for services, data or any other form of electronic information. After a dual sign up process involving Authereum and Twitter portals, requests are made and $DAI is staked as a signal to fulfillers that actual crypto is backing the request. Example:

• Since inception the number of requests have grown steadily as awareness of the platform has increased, culminating in a total of slightly more than 130.

• To date $14,000 in $DAI has been staked on the platform. The nature of this increasing step function shows many small requests, with an intermittent spike in cumulative stakes as users request services with large bounties.

• Finally, it is possible to drill down into the verbiage of the requests themselves, where you can see a broad spectrum of topics ranging from crypto, medical technology, lists of profiles or investors, graphic design, and coding solutions. The breadth of requests highlights how the versatility of the Erasure Bay platform positions it well to support future adoption as the use cases and creativity of requests evolve over time.

• The Handshake chain has seen substantial growth in overall usage in the last 5 weeks (source):

  • Over 170,929 HNS TLD auctions have been started to date.

  • Bid amounts for Handshake TLD auctions on-chain have totaled 50,804,417 HNS (with only 33,720,758 HNS REVEALed, which could suggest millions of HNS have been lost to-date/burned from not successfully completing their auctions).

  • 5998 airdrop recipients have received their HNS to date (this includes ‘Faucet’+’Airdrop’).

  • 143,068 names have successfully completed REGISTERing their names on-chain.

• As noted above, HNS burning has climbed as successful name auctions are registered upon completion, with now 6,369,449 HNS burned and removed from circulation. At the time of this writing, over 20,000,000+ HNS is locked in the various Handshake covenants—as this number climbs with the network’s usage, the circulating/liquid supply will grow continuously more scarce. (Source)

• Daily transactions for HNS remain steady, as individuals send HNS P2P and move through the various covenant auction states, the chain retains consistent daily usage, averaging 10,000-25,000 transactions day. We’ve now surpassed the 1 million transaction milestone, and are now well over 1.2million transactions since the chain launched just 164 days ago. (Source)

• Handshake’s Blake2bSHA3 hashrate has seen an enormous parabolic gain as it surged from roughly 25TH a month ago, to now over 500 terahashes, a 1900% gain in one month. As 4-5 various reported competitors are now working to build Handshake ASICs, we can likely expect Handshake to reach 1 petahash in network hashrate before the end of Q3, setting a trend to eclipse 2-3 petahashes by mid-Q4. (Source)

With Handshake's Blake2bSHA3 hashrate now mature and long-term stable with the addition of ASICs, the pools are diversifying as well. DXPool and Easy2Mine have joined the network and 6Block has been knocked down to the 4th largest pool, now trailing behind HNSPool/DXPool/F2Pool as new ASICs are deployed to the network. With the surge of new hash, we can likely expect more major pools to reveal they're mining Handshake in the coming weeks/month as new mining hardware is deployed by impending competitors.

With only 144 blocks a day at 2000 HNS per block (HNS halves every 170k blocks which is roughly 3.25yrs), the daily emission is 288,000 HNS a day, this means the amount of HNS available for those seeking a ROI on their newfound hardware may put a squeeze on the price as miners begin competing for marketshare to account for their operating expenditures. (Source)

• The total gas used on the Ethereum blockchain has reached a new all-time high, after the vote by Ethereum miners to increase the block gas limit by 25% (from 10,000,000 to 12,500,000). There has been a great deal of discussion about this from different angles. bloXroute is connected to many ETH pools and services, which gives us a unique vantage point on what’s happening in the Ethereum network. Our data implies that the recent gas limit increase is modest, and that a much higher gas limit can be safely deployed.

• The increase of the block gas limit by 25% has, in theory, allowed the Ethereum network to handle around 44 transactions per second, instead of the previous limit of around 35. Ethereum’s on-chain transaction volume has remained fairly stable after the gas limit increase, indicating that the surge in the total gas usage likely originates from the increased use of more complex smart contracts which, in turn, require more gas.

• Despite the gas limit increase, the demand for on-chain transactions on the Ethereum network remains high. In the days after the 25% gas increase, Ethereum blocks are full, which implies that further gas limit increase is needed.

• An important parameter to show the “health” of the Ethereum mainnet is the uncle rate. Through our close work with many of the mining pools, we can further see that the network is healthy and can handle a higher volume of TPS. There was no statistically significant increase in the uncle rate after the gas fee was increased by 25%.