Coin Metrics' State of the Network

Coin Metrics' State of the Network focuses on the analysis and insights into blockchain technology, cryptocurrency markets, and the decentralized finance (DeFi) ecosystem. It covers topics like hash functions, mining, market dynamics, stablecoins, regulatory developments, and the impact of technological upgrades on digital asset valuations and adoption.

Blockchain Technology Cryptocurrency Markets Decentralized Finance (DeFi) Market Analysis Regulatory Landscape Mining and Energy Consumption Stablecoins Exchange-Traded Funds (ETFs) Digital Asset Valuation Technological Upgrades and Adoption

The hottest Substack posts of Coin Metrics' State of the Network

And their main takeaways

Following Flows V: Pool Cross-Pollination

0 implied HN points • 05 Mar 24
đź•ą Technology Cryptocurrency Blockchain Mining Decentralization Data Analysis
  1. Decentralization concerns exist within Bitcoin mining due to the dominant control by a few major pools like Foundry and AntPool.
  2. Cross-pollination between mining pools is observed through shared addresses and flow of funds, indicating potential coordination among pools.
  3. Mining pools utilize different payout models and external networks like Cobo's Loop for liquidity, leading to a complex landscape with hidden consolidation of power.
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Coin Metrics’ State of the Network: Issue 215

0 implied HN points • 11 Jul 23
đź’° Finance Investment Digital Assets ETFs Crypto
  1. The introduction of spot Exchange-Traded Funds (ETFs) could simplify investment in digital assets for American investors.
  2. Investors face challenges with tax-advantaged accounts when wanting to invest directly in digital assets, creating a need for convenient exchange-traded products.
  3. Grayscale's trust products, such as the Bitcoin Trust (GBTC), fluctuate in value compared to the underlying asset, impacting investors' risk profiles and creating opportunities for arbitrage.

Ethereum’s Dencun Upgrade

0 implied HN points • 06 Feb 24
đź•ą Technology Blockchain Smart Contracts
  1. The Ethereum Dencun upgrade is a significant advancement that enhances scalability and security for the network.
  2. EIP-4844 introduces 'blob-carrying transactions' to improve data availability scaling and shift demand towards Layer-2 solutions.
  3. Upgrades such as EIP-4788, EIP-7514, and EIP-7045 impact validators, staking operations, and security within the Ethereum ecosystem.

Market Dynamics and Risks of Liquid Staking Derivatives

0 implied HN points • 12 Mar 24
đź’° Finance Cryptocurrency Market Dynamics Liquidity Risks
  1. Staking on the Ethereum network has seen significant growth, with 31M ETH staked on the Beacon chain, representing 26% of the supply.
  2. Liquid Staking Tokens (LST's) like Lido's stETH & wstETH have become a dominant form of collateral, with $9.5B in collateral across DeFi lending markets.
  3. Market risks associated with Liquid Staking Tokens include de-pegging, liquidity risk, and potential market instability during significant events like the Terra Luna collapse.

Coin Metrics’ State of the Network: Issue 200

0 implied HN points • 28 Mar 23
đź”® Crypto Bitcoin Mining Taxation Market Trends
  1. Bitcoin miners have seen a boost in revenue from Inscriptions despite some challenges with chain splits and indexing issues.
  2. American mining operations are facing challenges from bankruptcy, severe weather, but have maintained a strong foothold in the global hashrate landscape.
  3. Miners are enjoying a Q1 revenue rebound, but are struggling with increased energy costs and the potential impact of a proposed 30% excise tax on mining operations in the U.S.

Coin Metrics’ State of the Network: Issue 209

0 implied HN points • 31 May 23
đź”® Crypto Market Trends Correlations Volatility
  1. The digital asset market has evolved significantly since Bitcoin's inception, with emerging sectors like blockchain infrastructure, on-chain derivatives, DeFi, and NFTs.
  2. Sector correlations, like BTC and ETH, can provide insights into the relationships among different sectors within the digital asset market.
  3. Market volatility varies across sectors, with assets in the Decentralized Finance sector experiencing the highest average volatility in 2023.

Tether’s Ascent: Breaking Down the Dominant Stablecoin's Growth

0 implied HN points • 23 Jan 24
đź’° Finance Stablecoins Adoption
  1. Tether's supply has reached new heights, with significant growth and expansion on various blockchain networks.
  2. Tether is gaining popularity in decentralized finance (DeFi) applications, particularly in smart contracts and money markets.
  3. Tether's usage patterns show widespread adoption, especially in emerging markets, and its nature as a stablecoin facilitates trusted digital asset trading on exchanges.

Breaking Byzantine Fault Tolerance

0 implied HN points • 27 Feb 24
đź•ą Technology Blockchain Cryptocurrency Network Security Economic Analysis Market Trends
  1. The Total Cost to Attack (TCA) metric introduced in the research is a valuable tool for assessing the economic viability of potential threats to Bitcoin and Ethereum networks.
  2. Analyzing the economics of potential attacks on blockchain networks highlights significant economic disincentives for attackers, with the costs to compromise Bitcoin ranging from $5B to $20B and Ethereum's cost estimated around $34 billion, proving to be prohibitively high.
  3. The study emphasizes the security mechanisms of major blockchain networks like Bitcoin and Ethereum, indicating a promising future for the cryptocurrency industry amidst market growth.

Conducting the ETH Census

0 implied HN points • 30 Jan 24
đź”® Crypto Technology Blockchain Data Analysis Economics Innovation
  1. Calculating Ethereum's total supply is a complex task due to its multi-layered system.
  2. The total supply of ETH as of January 20th, 2024, was 120,179,693.24908, but accurate tracking is essential to avoid double counting.
  3. Accurate supply metrics impact various aspects like wealth distribution, market capitalization, and index creation in the cryptocurrency space.

At the Crossroads: Bitcoin ETFs & Coinbase

0 implied HN points • 21 Feb 24
đź’° Finance Crypto Investing Earnings Regulation Market Analysis
  1. The launch of Bitcoin spot ETFs has led to significant changes in Bitcoin distribution and trading volume, with inflows into new ETFs and outflows from existing ones.
  2. Coinbase's Q4 2023 earnings reported strong revenue, with a notable increase in transaction revenue and diversification into subscription and services revenue.
  3. Coinbase's revenue growth is attributed to factors such as staking services, stablecoins, and new business verticals, showcasing strategic diversification and adaptation to market trends.

Navigating the Avalanche: An Introduction to the Avalanche Network

0 implied HN points • 13 Feb 24
đź•ą Technology Blockchain Cryptocurrency Tokenomics
  1. Avalanche is a blockchain network with unique architecture and features like subnets, making it versatile for a wide range of applications like DeFi and gaming.
  2. The AVAX token is central to Avalanche, used for transaction fees, network security through staking, and has shown notable success with market capitalization peaking at $30B.
  3. Avalanche's consensus mechanism, called Avalanche Consensus, is structured to handle high throughput with fast transaction speeds, enhanced scalability, and a permissionless approach different from traditional blockchains.

Coin Metrics’ State of the Network: Issue 211

0 implied HN points • 13 Jun 23
đź”® Crypto Bitcoin Mining Energy consumption Data Analysis
  1. Study presented a new methodology for estimating Bitcoin's energy consumption using data patterns from mining hardware.
  2. Mining process involves searching for a special number called 'nonce' and each mining machine leaves an identifiable pattern.
  3. The study estimated Bitcoin's power draw at 13.4 GW in May 2023, which is around 16% less than Cambridge University's estimate, showcasing the importance of accurate analysis in the cryptocurrency industry.

Coin Metrics’ State of the Network: Issue 213

0 implied HN points • 27 Jun 23
đź”® Crypto Market Analysis Bitcoin Ethereum Regulation Digital Assets
  1. Bitcoin's dominance in the digital assets market is at 58%, the highest since April 2021.
  2. Bitcoin's market cap of $590B is significantly higher than the aggregate market cap of other assets in the cryptocurrency universe.
  3. Ethereum continues to track Bitcoin closely, maintaining a significant lead in the smart contract platform sector.

Coin Metrics’ State of the Network: Issue 214

0 implied HN points • 05 Jul 23
đź”® Crypto Market Analysis Regulation
  1. Digital asset markets experienced fluctuations in performance during Q2 2023 due to regulatory scrutiny and evolving market dynamics.
  2. Stablecoins like USDT and USDC saw contrasting trends in supply, impacted by regulatory pressures and market conditions.
  3. Institutional interest in cryptocurrencies surged in the second half of Q2 2023, marked by ETF applications and positive market developments.

Coin Metrics’ State of the Network: Issue 216

0 implied HN points • 18 Jul 23
đź”® Crypto Regulation Market Impact Exchanges Securities
  1. A milestone ruling favored Ripple Labs Inc. in its case with the SEC regarding the XRP token.
  2. The market reacted strongly to the ruling, with XRP price surging and U.S. exchanges re-listing XRP for trading.
  3. The ruling highlights the complexities of applying securities laws to digital assets and the ongoing battle between the crypto industry and regulators.

Coin Metrics’ State of the Network: Issue 217

0 implied HN points • 25 Jul 23
đź”® Crypto Regulation Blockchain Securities Market Analysis
  1. Determining which cryptocurrencies are considered securities remains a complex and critical issue in the evolving regulatory landscape.
  2. On-chain metrics provide valuable insights but are not the sole criteria for classifying assets as securities.
  3. Clear securities regulations could bring transparency and compliance measurements to the crypto industry, with on-chain data playing a potentially crucial role.

Market Structure on the Cusp of Spot Bitcoin ETF Launches

0 implied HN points • 09 Jan 24
đź’° Finance Cryptocurrency Market structure ETFs
  1. The cryptocurrency market eagerly awaits the launch of a spot Bitcoin ETF, marking a historic milestone.
  2. BTC spot trading volumes are affected by ETF anticipation, surging back with potential ETF launches on the horizon.
  3. The volatility and return characteristics of digital assets like BTC are evolving, showcasing their potential role in diversified investment portfolios.