Nansen report shows crypto going multi-chain with DeFi and NFTs

Ethereum, with its first-mover advantage, remained the biggest blockchain by TVL and market cap with Uniswap as the dominant application

Nansen, a blockchain analytics platform, has released its 2021 ‘State of the Crypto Industry Report’ showing crypto has gone multi-chain, with attractive yields and digital collectibles.

According to the analysis, Ethereum, with its first-mover advantage, remains the biggest blockchain by TVL and market cap.

Uniswap was the dominant application on Ethereum, responsible for more than 30% of the gas consumed by the top 20 entities.

Nansen added that many Layer 1 and Layer 2 blockchains had come up with innovative ways to solve problems regarding blockchain decentralisation, scalability, and security, as they are competing with each other for market dominance.

Notable statistics for other supported blockchains were as follows:

  • Polygon facilitated 300% more transactions than Ethereum, but the daily gas paid (in
    USD terms) is often less than 0.5% of gas fees paid on Ethereum
  • Binance Smart Chain’s daily active addresses were the highest among all L1s. At its
    peak in late November, the daily transactions on BSC hit 1,345% of Ethereum’s
  • Fantom Foundation announced a 370m FTM grant program in September 2021, daily
    active addresses on Fantom increased 440%, and TVL went from  approximately $1bn to over $6bn in November

DeFi grew 1,120% in 2021 based on TVL

After the meteoric rise of DeFi in 2020, the momentum continued into 2021.

Nansen stressed that, not only has DeFi grown about 1,120%, but also in terms of stickiness due to the maturity of stablecoins as well as the reliability of battle-tested dApps.

Stablecoins value distribution showed that whale wallets with over $1m made up more than 50% of
stablecoin volume through 2021, which has been steadily increasing.

Increased regulatory scrutiny into Tether in 2021 has eroded USDT’s dominance.

In 2021, USDC seemed to have found its niche as the preferred stablecoin in decentralised trades, closing up on USDT as second in stablecoin market cap on Ethereum.

NFTs took the world by storm

CryptoPunks and Bored Ape Yacht Club were the two key break-out projects and some of famous celebrities such as Stephen Curry and Jay-Z started using NFTs as their Twitter profile pictures.

The market saw two peaks during the year, one in May and one in late August.

The single highest trading day by volume was on August 29, with an unprecedented high of 132k ETH ($422m) in sales volume. The market ended the year off with over 4.6m ETH ($17bn) in total sales volume.

Nansen co-founder and CEO Alex Svanevik commented “crypto lending and options are expected to see increased adoption by institutions as more of them are exploring the crypto markets”.

“While few companies will hold BTC directly on their balance sheet like Tesla or MicroStrategy, the opportunity to pay using crypto might finally make it mainstream,” he said.

“Moreover, we expect crypto ownership from institutional investors to boom in 2022, possibly flipping that of retail.”

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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