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Ecosystem Chart Book July 2023
Aug 7, 2023Â â‹…Â Â 5Â min read
Across the major ecosystems, there has been a modest uptick in activity, primarily in stablecoins and credential protocols, over the last month. Optimism, while still lagging competitors like Arbitrum One in many aspects, has attracted most of the growth on percentage terms over the last month following its Bedrock upgrade, which lowered standard transaction costs for users.
Evident in the growth data over the last month is the rise of more consumer-led use cases such as credentials, wallets, and stablecoin usage. Low-cost chains like Solana, Optimism, Polygon, and more are attracting the most growth as the low transaction cost facilitates products with high-volume, low-value transactions.
Let’s break down the details of the top movers in the smart contract chain space.
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Source:Â Messari Major Ecosystem Screener
Top-of-the-market Layer-1 tokens have seen modest growth over the last month, with Optimism, Hedera, and Solana having the largest price increases.
Hedera’s nearly 40% 30-day growth comes after detailing its EVM equivalence approach and completing a successful stablecoin remittances proof-of-concept with Korean Shinhan Bank and SCB TechX.
Additionally, Hedera has seen increased NFT and general activity as Karate Combat launched its KARATE token and mobile application, along with the Karateka’s NFT collection, a game based on the Karate Combat IP.
Optimism and Solana’s above-market price appreciation can largely be traced back to continued improvement in fundamentals such as TVL and active address activity. Additionally, Optimism carries a premium for being associated with Coinbase’s launch of its Base rollup.
With over 50% growth in market cap over the last 30 days, Optimism is the fastest-growing emerging ecosystem in terms of market cap despite a roughly 25% decline from the broader market over the last 180 days.
The market cap growth of Optimism and Solana follows TVL trends across the major chains, where all other ecosystems have seen declines in TVL over the last 30 days, while Optimism and Solana have seen modest gains.
Driving the TVL growth on Optimism has been the recent growth of Exactly protocol (fixed rate lending) and Yearn. Between the two protocols, over $90 million of TVL has been added to the Optimism ecosystem. Exactly has driven the bulk of the growth since launching its token in mid-July and providing liquidity rewards on the protocol. It is now the second-largest lending protocol on Optimism behind Aave. However, Exactly has deeper liquidity in key markets with over $80 million USDC locked, which is over three times as much USDC locked in Aave Optimism.
Despite the decline in DeFi TVL across most major chains, all have seen an increase in the TVL valuation multiple. Outside of Solana, each chain’s TVL valuation premium increased by over 10%, and in the case of Optimism, its valuation multiple increased by over 50%.
Across major ecosystems, the daily active address count has modestly increased, with Polygon, Optimism, and Ethereum leading the growth.
Optimism has seen the largest percent change growth in active addresses, with 32% 30-day growth passing Avalanche in overall count. With just over 100,000 daily active addresses, Optimism is approaching Arbitrum as Arbitrum continues to see flat-to-down activity growth.
While LayerZero airdrop farming and general bridge activity have driven Optimsim’s growth in the past, the recent activity growth has come from general wallet transfers, stablecoins, and NFTs.
On the application side, both USDC (Circle) and Tether have driven large address activity growth on Optimism. Additionally, NFTs have seen over 80% address growth over the last 30 days, as Rabbithole saw a significant uptick in users completing Optimism quests.
Wallet activity has largely been driven by Omni Wallet and the continued deployment of new Gnosis Safe wallets on Optimism.
Similar to Optimism which saw large activity growth from Rabbithole credentials, Polygon’s recent address growth has also come from credentials issued by Galxe.
Galxe has shot up since mid-July to become the largest application by active address on Polygon, with over 43,000 daily active addresses.
Galxe campaigns are used by various projects like Gitcoin Passport to incentivize users to take specific actions on their applications. The credentials or rewards are then issued on a chain, like Polygon, which has low transactions cost needed by low-value transactions like credentials.