ON–076: DeFi

Coverage on Helium, The Graph, Pocket Network, and Flashbots.

Jun 18, 2021

ON–076: DeFi

This is issue #76 of the on-chain analytics newsletter that reaches nearly 12k crypto investors every week 📈

About the editor: Spencer Noon is an investor at Variant, a first-check crypto VC fund.

This week our contributor analysts cover decentralized infrastructure projects: Helium, The Graph, Pocket Network, and Flashbots.

① Helium

📈 Helium Network Size Up 15x YoY

  • Helium is a crypto-economic protocol for deploying real-world wireless networks, starting with a LoRaWAN network for low-power IoT devices. In the last 12 months, almost 60k hotspots have been deployed around the world. The rate of hotspot deployment has rapidly accelerated as new manufacturers have come online.
  • Helium's peer-to-peer network now provides coverage in 80+ countries. Beyond LoRaWAN, work has started on expanding Helium to support 5G and LTE, which telcos could use as a low-cost backhaul for mobile phones.
Helium Explorer
  • Lastly, significant token-economic changes have been approved by the community. HIP20 added a capped supply to HNT via Bitcoin-style halving, plus a novel "net emissions" recycling mechanic; HIP25 moves blockchain consensus to a dedicated validator system that requires long-term staking of HNT.

② Flashbots

📈 ~85% Of ETH Hashpower Leverages Flashbots

  • Flashbots provides a private communication channel to Ethereum miners, where searchers can submit transactions with a bid for preferred ordering within a block. The goal is to provide a permissionless & transparent marketplace that democratizes MEV extraction across mining pools, and eventually across validators in Eth2. Since launching in January 2021, the ecosystem has seen an exponential rate of adoption, with ~85% of Ethereum’s mining hashpower now participating and ~$90M in cumulative miner payments to date.
  • The percentage of Ethereum blocks that include Flashbots bundles, as well as the total number of bundles landing on-chain, have both been steadily increasing. The former is hovering around ~60% of blocks and the latter is at ~90,000 bundles included weekly. With bundle merging (ability for miners to accept multiple bundles per block) added in late May, the number of weekly bundles included is expected to continue rising rapidly.
  • It is interesting to look at how Flashbots is affecting total miner revenues, with MEV payments continuing to account for an increasing portion. This is relevant when thinking about expected Eth2 validator revenue in the sense that: a) without Flashbots, validators that extract MEV themselves could compound their ETH stakes at a faster rate than non-extracting validators, potentially fueling increased network centralization and b) with Flashbots, MEV payments may ultimately make up a substantial portion of the revenue to all stakers. There’s also an intriguing debate as to whether miner payments are likely to converge asymptotically towards 100% over time as a portion of total MEV extractable in a given opportunity. This moves searcher profits towards 0 over the long run, so we’ve seen searchers instead engaging in off-chain coordination to keep bids low.

③ The Graph

📈 25B Queries Processed In May

  • In its lifetime, The Graph's hosted service processed over 130 billion queries for top DeFi, NFT, and scaling dapps. From 1 billion queries in June 2020 to over 25B queries processed in May 2021 alone, the hosted service usage has acted as a good proxy for usage growth on Ethereum. Between April-May 2021, the hosted service saw 25% growth in queries. As we continue through subgraph migration, where subgraphs are migrated to the network, we thank the hosted service for serving us well.
The Graph
  • This week, 8 dapps went live in production with The Graph on mainnet: Audius, Reflexer, Opyn, Livepeer, UMA, DODO, mStable, and PoolTogether. Indexers allocate GRT to subgraphs to process queries. While PoolTogether has the most allocations, the Opyn, UMA, and mStable subgraphs are picking up steam.
The Graph
  • There are over 7K Delegators and over 150 Indexers contributing to The Graph. 2.9B GRT has been staked (allocated) on the network. Over 139M GRT in Indexing Rewards has been awarded to Indexers and Delegators. 95 Indexers have earned over 100K GRT, 41 of these Indexers have earned over 500K GRT.
Graph Network Dashboard

④ Pocket Network

📈 # Of Apps Staking On Pocket Approaches 400

  • Pocket Network is a decentralized relay network that provides apps with RPC access to the long tail of blockchain networks using independent full nodes. Average daily relays on Pocket has averaged ~4m and ~1/3 of the network’s peak at 12m in April. Over the last four weeks, 142M relays have been driven by the Pocket Gateway. In May, node operators served 169.7M relays from blockchain applications. The upcoming launch of wPOKT aims to boost relays by creating a data farming programme for apps.
  • In May, the chain halted temporarily due to a change in transaction indexer but did not impact node count overall. Tendermint began treating nodes beyond the MaxValidators limit (5k) differently, causing a temporary spike in jailed nodes. PUP-8 upgrade increased the node limit to 50k to address this.
  • The number of apps integrated with Pocket has been consistently growing, indicating a growing demand for developers to route requests through Pocket’s independent nodes. This has lead to a growing amount of POKT being staked by those apps which stands at an all-time-high of 10M POKT.