Token Terminal

Uniswap’s trading volume by chain provides some interesting signal amongst the growing noise on L2s — while also shining a light on Ethereum L1s continued dominance. Case & Point: 1. Ethereum L1 still controls 64% of Uniswaps trading volume. It was 72% last year. And 90% in 2022. 2. The number 1 L2 in terms of Uniswap volume? Arbitrum. It commands an 18.6% market share today (up slightly from 18.4% in ‘23 (2.5% in ‘22). 3. The number two L2? Base. Base has a 6% market share today. 4. Which chains are losing market share of Uniswap volume? Polygon has 4.6% today (5.3% in ‘22). All other chains are growing market share except for ETH L1. Uniswap has to share economics with all of these chains (MEV, transaction fees, etc.) But that's all changing now. Today Uniswap announced "Unichain" on Optimism. A move that integrates their product suite and allows them to control more of the value chain. The market seems to like the move as it's up 12% on the news. Data: Uniswap trading volume by chain powered by Token Terminal

Token holder distribution of TON has grown by 2400% this year, as the total number of TON holders now stands at 90M. To put this into perspective, OP and ARB have about 1.2M and 1.4M holders, respectively, while ETH has about 220M. The majority of this growth occurred over the past month, with more than 40.5M TON holders emerging since September. Daily trading volume during this time also reached an all-time high of $2.4B, but has since reverted to about $2.5B per week. Much of this activity can be attributed to gaming activity on the network as well as USDT activity, which now realizes about $1B in transfer volume per week. h/t Token Terminal

Never lose sight of the fact that valuation is a social construct. So when Wall Street analysts look at Bitcoin’s $1.2 trillion valuation and can’t make sense of it, what they’re really saying is they don’t understand this new social construct. Is Bitcoin overvalued? It could be. But the logic is flawed if you’re applying an old social construct as the basis of evaluation. The old social construct most often used? The one created in the 1930s by Benjamin Graham using discount cash flow analysis. Remember. It’s just a social construct that everyone agreed made sense for relative comparison of *stocks.* Which leads to my next point: New things (for example, crypto) that look completely different from old things (for example, stocks) have the potential for much higher valuations. Why? There is no consensus on how to value them. It’s that simple. Over time, the market has used Bitcoin and Ethereum as the relative benchmark. So, if you think BTC and ETH are overvalued, you’re going to think *everything in crypto is overvalued.* And if it turns out that BTC and ETH are undervalued, then you are completely offside as to what’s happening with this new social construct. ---- The people that "get" crypto or are "crypto native" understand this. I think it's because they tend to be better at seeing the world as it is, rather than how we were taught in business school. So don't be afraid to open yourself to the formation of new social constructs. New social consensus. New ways to value financial assets. Because history says this is how the world works. And we’re in the process of doing that today in crypto. Shout out to the data companies like Token Terminal that provide the tools to make it possible. Data: Blockchain Comparison powered by Token Terminal

As the Coinbase Base ecosystem continues to evolve, it's interesting to see how different applications emerge and gain traction. Aerodrome now accounts for 60% of all DEX activity on the network, followed by Uniswap (30%), and recently handled $3B of weekly volume (compared to Uniswap's $1.1B). Daily users have grown by nearly 270% from last month and now stand an all-time high (27K), while TVL is approaching $1.2B (up 95% on the month) and accounts for 43% of all TVL on Base. Aerodrome has also generated more than $20M in fees this past month, the 9th most of any protocol in the entire space, slightly trailing Jito ($21M) and Aave ($24M). It will be especially interesting to see how token incentives impact trading volumes and fees moving forward. So far, more than $39M of AERO token incentives have been paid out since September. Buckle up. h/t Token Terminal

In many ways, the closer you are to the crypto asset class (via crypto Twitter), the harder it is to see things with clear eyes. Here is a list of the top 5 people who will try to knock you off your game (and what to do about it): 1. The “Bitcoin Only” Guy. This person will get in your ear and tell you that “Bitcoin will swallow the entire asset class and all store of value assets.” They'll say things like “Bitcoin, not crypto.” This person is right that Bitcoin is a big deal. But they also live in an echo chamber. Of course, there will be periods in the market cycle where this guy starts to look like he’s correct. This is usually the best time to buy ETH and other quality alts. 2. Your “MBA Buddy.” This is the guy in your friend group who went to way more school than you, blindly trusts the government and academia, and can’t get past the fact that “Bitcoin has no intrinsic value.” The classic mid-curver. When this person finally decides to buy some crypto, it might be your signal to sell. 3. The Power Hungry Bureaucrat. These are the Elizabeth Warrens and Gary Gensler's of the world. The elected officials that gaslight the general public into thinking “crypto is only for criminals.” They’ll lie to your face and do anything for power.  Incentives drive everything. So you should question their incentive to block or slow innovation in America. The signal here is that every major industry has had similar misinformation attacks leveled at it. In fact, it would be a red flag if we didn’t see this.  4. The “Bitcoin is Old Tech” Guy. This person is fairly new to crypto but all in. In many ways, they are the polar opposite of the "Bitcoin Only" guy, but equally misguided. This person will jump on every new narrative in the space, and ultimately get rekt. Your job is to watch their emotions during the bull. When they start telling you they have a “system for identifying 10x memecoins” it's probably time to get out. 5. “The Arrogant Value Investor.” This person is similar to the “MBA Buddy” but is far more ignorant and arrogant about it. They will post on social media, using clickbait to spark outrage amongst crypto insiders. They’re extremely vocal at cycle bottoms. And they’ll make sure you are aware of the fact that they’ve “spent 30 years on Wall Street.” The truth is that this person hasn't studied the industry/tech/business models and prefers to be ignorantly blissful rather than do any real work. Their cognitive dissonance with crypto ultimately stems from having missed the capital gains over the years. It's emotional. That’s why they can’t help but walk on your grave at cycle lows. Their lack of EQ is your signal to buy. ---- Of course, you can avoid all of this nonsense by limiting your social media intake, studying crypto from first principles, and signing up for Token Terminal. P.S. What did I miss? Data: Top 20 Projects by Tokenholder count powered by Token Terminal

Traditional financial assets benefit from agreed upon valuation techniques and comparable data points that have been honed over decades of research and taught to millions of finance graduates. Crypto Assets are in their infancy and the pace of innovation is frenetic but in many cases these new assets can be valued and analysed through the same lens as their TradFi predecessors. This is why I am excited to announce that I have joined Token Terminal, an innovator in this space, as Strategic Advisor. Crypto, as an asset class, is at the beginning of its mainstream adoption journey and I look forward to helping the Token Terminal team realise their potential as an integral part of this evolving industry. DM if you would like to know more about Token Terminal and their mission.

🚨 Agora's AUSD stablecoin is taking off on Avalanche 🔺📈 A majority of the AUSD supply is still on Ethereum, but most of the transfer volume is on Avalanche.

Token Terminal Welcomes Alex Wenham, FRM as a Strategic Advisor We are thrilled to announce the appointment of Alex Wenham as a Strategic Advisor at Token Terminal. Alex brings over fifteen years of experience from the intersection of traditional finance and crypto, having spent a significant part of his career at Bloomberg, where he held key leadership roles focused on institutional sales and product strategy. As we continue to shape the future of onchain data analytics, we are confident that Alex’s market knowledge and operational expertise will play a significant role in helping the company expand its footprint in the institutional market.

Remember when Wall Street was struggling to figure out how Facebook would monetize back in 2010? Sometimes I wonder if the same thing is playing out with Uniswap and concerns around *value accrual to the token.* Case & Point: Uniswap Labs has done over $56m in revenue since turning on a fee for swapping directly on Uniswap's interface.  $49m over the last 6 months. To be clear, this is a fee that was implemented by Uniswap Labs, not the Foundation/Uniswap DAO. They increased the fee to .25% in April and have done nearly $50m since (11.6% of protocol fees). It’s turned into a nice little business — allowing the core team to sustainably finance operations, research, and development of the Uniswap Protocol. *This business alone is a Unicorn based on annualized revenue at a 10x multiple.* Of course the market doesn’t seem to care about this since the $ is not being returned to token holders just yet. But there is some signal in here. The signal is that Uniswap has: 1. Product/market fit 2. A strong and growing user base 3. A liquidity moat 4. Trust/lindy/brand 5. A dominant market share amongst DEXs That’s what is allowing them to monetize the interface and fund operations via user fees. Not to mention, Uniswap has an army of service workers globally (liquidity providers) that earned $898m in swap fees from the protocol. Meanwhile, crypto hasn't even come close to going mainstream. And here we are wondering how Uniswap will find a way to reward token holders in the future. Will we one day look back thinking how silly it was that we were debating the token fee switch? Just as many on Wall Street couldn't foresee Facebook's advertising business? Time will tell. Data: Uniswap Protocol Fees vs Uniswap Lab Fees over the last 6 months powered by Token Terminal

Making the case for ETH/BTC having bottomed: 1. ETH/BTC has been establishing higher lows since 2016. The ratio bottomed at just under .01 in early 2017. It bottomed at just under .02 late in 2019 and then again during the Covid crash in March 2020. Fast forward to Sept. 2024, and ETH just ticked below .04. To me this signals that the market is becoming more convicted on ETH over time. We’ll see if it holds at .04. 2. In prior cycles, when ETH/BTC capitulated, it established a low shortly thereafter. The ratio appears to have capitulated with the move from .057 to .038 over the last few months. 3. Last cycle ETH bottomed just after rate cuts. The Fed started cutting a few weeks ago. 4. Same idea with the Fed balance sheet — as we moved from net tightening to net expansion, ETH/BTC bottomed. With liquidity conditions rising, we could see the same dynamic in this cycle. 5. Bitcoin dominance historically drops as liquidity conditions improve. It’s currently at 56% (near cycle highs). 6. From a sentiment perspective, ETH just went through a period of disillusionment we haven’t seen in some time (fees down due to EIP4844, “roadmap in shambles.”). This is market psychology and the impatience of crypto Twitter. The reality is that Ethereum continues to execute on its roadmap. 7. The Bitcoin only crowd tends to come out dancing on graves as ETH/BTC bottoms. “ETH is dead” becomes the narrative, which is what you need for a hated rally off the lows. --- What do you think? Is ETH/BTC going lower or has it bottomed for this cycle? Share your views below.  --- P.S. I'm sharing more views on the market set up next week via The DeFi Report. If you'd like to have our latest research dropped into your inbox as it's published, see the first comment below 👇 Data: ETH/BTC powered by Token Terminal