Zhong: Q3 Crypto Industry Report |14th Oct 2023 | Sunway University | ETHKL 2023

we have uh J from coin Geo uh we'll be sharing quad 3 crypto industry report let's give him a big Applause thank you yeah okay uh good morning everybody um thanks for coming uh my name is dong I'm the head of research here at coino uh and uh I think we're going to just start because uh you know we're running out short time and stuff like that so um I think when Ross introduced the event if you were in the other Hall uh he actually said that you know we not going to talk about the price today and uh actually it's not very true because I I had to I you know what else do you come to co get go for right to look at the price so so so I promise you this is probably the only session that we're going to talk about the price and and some the other things uh but but yeah I mean uh just wanted to take you through this report uh you are getting a snake preview we don't publish this report until two weeks from from now but uh we rushed it out for the for the event um the obviously the the full report if you have not seen the past on the full report is 50 slides I'm not doing 50 slides today uh this is just a quick run through obviously tailored for people uh here since this is IFK and uh yeah let's let's just get into it that's only about like 10 slides yeah so this is what the market looks like at the moment at least from uh from up to Q3 uh starting from this year so I know a lot of people still say oh bad Market bad Market B market right it's it's it's it's it is that but actually if you look at the chart right and if you start from January uh we're up about whatever the slide says it is 35% um so yes Q3 is a down quarter uh is down about 99.63% but overall I think for the for for for the market we're actually up about 35% um surprisingly one of the big gainers uh this year is actually Bitcoin the grand Grand Daddy of all this up about 60% year to date even though again it also fell uh slightly um in 20 well in Q3 right um some of the other things I did mention in the in the notes I think uh the other thing to point out is obviously you can see the purple part of the of the slide uh volumes have fallen off a cliff um so um exchanges I think if you're in the audience uh I think it's it's it's been a challenging um nine months uh to be honest probably started from 2022 it's been quite challenging um average uh trading volume has come down to about 30ish uh billion uh daily yeah so I think from from that perspective it's is not doing great but otherwise I think you know despite I would say a 99.63% decline in Q3 uh actually the market uh from a from a return perspective is up about 35% this year which is better than last year um going zooming into ethereum actually ethereum is doing pretty much in line with the market uh you'll see that uh you know it's also up about 39.6% slightly up performing the market for the year it is down 13.6% in Q3 but uh yeah after two quarters of gains in the first half of the Year this is I would say probably characterized as some level of consolidation uh a lot of the dip as you can see happened in August 17 um don't really know why it's it's it's a strange dip I think anybody who's watching the market um the only two things that happened that day was that there were rumors that uh uh you know Elon sold some of his Bitcoin again and then uh uh everr the the Chinese property developer f for bankruptcy in uh in the US um not really things that you expect to affect the bit the the price of crypto but that's what happened and and that that's where we are are uh pretty much after August 17 is sort of flat and we sort of stayed there um I I think just a few things to point out that happened in Q tree really uh yeah the there there's EIP 7154 uh we're going to talk a bit more about this later but essentially there's a new um EIP that's being introduced to limit the number of validators coming into uh coming on to ethereum uh because of uh people start worrying about finalization issues this is supposed to be in dankun but I think we're going to talk about that later uh other than that I think layer tools are sort of a trend and you can see lots of layer tools are being launched in Q Tre alone that's the list you know some of them are here with us today mental linear base sharum um still a lot of people building uh layer TOS I think uh scroll just launched very quietly last week uh and there's a few more to go I think people outside like Tao and stuff like that they're still still building yeah um moving on this is staking so probably one of the big bws for ethereum uh in 2023 and 2022 pretty much ever since you know ethereum under under when it's merch and you can see now that there is about whatever the number is I really can't see there is about 27 million uh e that is now stick in the protocol if you cons if you count that against total in supply of e uh that's about 22% of all ethereum that is now stick in the network uh obviously this is a combination so the big purple chunk is actually people that we don't know these are actually Solo stakers or stakers that have chose not to declare themselves on the onto the market but I think you know lots of people talking about SDS right so liquid staking protocols liquid staking tokens uh liquid staking derivatives uh you can see that we put up some of the logos on on on the top right Lio is the leader 32% some people are in ethereum are losing sleep about that uh uh coin base is in second place and third place is actually something called figment which may not have been on your radar so actually they added a significant chunk of of of State e they are really a more institutional Focus uh provider and really shot up the ranking I think they were like fifth or six uh last quarter and they they're now like third uh other other than that you can see the the other um normal suspects as you expect binance Kraken uh then rocket pool yeah and and so on and so forth so very I would say it's a healthy development uh in fact it's been too healthy and that's why the EIP came about to try to slow this uh increase in in the number of of of Eve being stti in the network and the number of validators coming online uh however after they announced the IP actually the queue has fallen off a CLI right so if you understand how e staking Works actually there's a queue for Val validators to be activated um at one point it was like you have to wait like 2 weeks or something um right now or even a month I think the longest one was 46 days if if memory serves me right so you can't just plug in to ethereum and and decide to be a validator that's that's sort of a queue to to join uh right now it's down to half a day 0.

6 days so um it actually shows that uh maybe this is going to Plateau after you know really really a big runup ever since you know merge and ever since Shanghai upgrade so yeah but otherwise I would say still Healthy Growth going and and I think it's going to go on for at least a few more months uh Lio is the elephant in the room guess uh another interesting thing I think uh is ethereum burn uh EIP 1559 and uh I think good news for all the ultrasound money uh narrative uh supporters I guess uh since the start of this year ethereum has been deflationary right so actually there is less ethereum in circulation now than there has been at the start of the year uh most of the so you can see the green line is the burn yellow line is the emissions and in the first two quarters of the year the burns have outnumber significantly out out outstrip uh emissions uh for Q3 we uh see a slight Slight Return to to to inflationary but you can see that you know pretty much is is around there and and that is you know really um because activities on chain have sort of reduced uh quite significantly in Q tree uh so yeah in deflationary um ethereum Supply uh you will see that some of the usual suspects are on the bottom to who are the ones that are causing most of the burn uh interestingly I I will point out you know unisa being the dominant um Dex or amm on chain is is obviously number one but you are seeing that some of the like zking arbit some of the layer twos are starting to make the list um uh they only burn ethereum when people bridge over to to to their layer to right so they making a list is a sign that you know people are moving their e off to off the main net onto those layer tools itself so good news for adoption the people that have fallen off the list that we're going to talk about in a bit is NPS unfortunately so openc used to be on the list but now it's kind of off and uh it's a it's a sign of you know what's happening in the F Market at the moment I did want to put up a slide so this slide is not in the final report but I did wanted to put it up I think this is a good measure of where we are from a layer two adoption perspective you can see the Gray Line the only straight line that runs through this is uh ethereum number of transactions um and you know pretty much ethereum has been at that level and then you know you stack up all the layer tools that have launched right and I CH this from the start of January as well so this is 202 I think 2023 um yeah I think it's a good sign so you know it it shows that the layer two thesis is sort of working people are actually migrating off Main net which is expensive which is kind of slow onto um Layer Two right which are supposed to be more efficient people are building more apps and stuff like that obviously the darling for Q3 is base right uh that that's run by coinbase they really I think you know had a very successful launch and then really search ahead in terms of number of transactions um but you know people like arbitrum and optimism which launched way earlier have have have actually also seen pretty good traction and and are still pretty dominant right uh so good signs I I think overall and really I think since the start of the year I think I say March or April um the total number of transactions on layer 2 have completely outstripped the transactions on Main net itself so this is all good for layer to adoption oh I see Matthew there so all the data come from you so if it's wrong it's his fault yeah but yeah but yeah I I think yeah so pull this up yeah just just to give you guys an idea of where we are and uh I think just the other thing to point out is probably like there are days now where you know a single layer two the number of transactions on a single layer two can completely outstrip the number of transactions on ethereum already we've seen that happen uh with uh arbitrum and we have now seen that happen with Pace as well so again good news for the tws moving on a bit to D5 uh I believe this is a breakdown of tvl so it's it's quite hard to measure D D5 um tvl is uh is is an interesting one it I I tend to tell people it's it's not the best but it's the best that we have in terms of trying to measure um measure you know adoption of defi on different chains uh it's interest uh well as as you may expect ethereum is in the lead is about 70% I think it say 69% uh as of September and you see that beyond that I think um the other chains behind that are also evm based right so it's a testament to the ecosystem is a testament I think to the success of solidity and you know the whole evm movement where a lot of this a lot of the development or a lot of the adoption of defi I would say is happening on one evm chain or another right um what I will point out is also interesting is um is is you look at ethereum and you see 70% but actually it's because we count LSD as part of this tvl so because of you know such a big adoption of of ASDS um you know they make up a big chunk of this of this percentage but it's about 20 it's about 20 or% so if we actually strip that out and we we I don't I didn't chart it here but if we strip that out actually we also do see dvl migrating of main net onto the layer twos as well right so that is again good news I think good developments for um for the L2 narrative I guess yeah um overall I think it's slightly down by 77.6% not that big of a drop I would say compared to markets pretty much in line with Market but yeah I think just interesting things I want to point out um the other thing that is sort of making a comeback I would say point out at this point is uh Solana uh we are seeing a Resurgence of that um close to one year now after FDX collapsed right and Solana was very closely associated with FTX but it seems like they have managed to survive the worst of that and are making a comeb back back um also interesting is you know maker talking about now wanting to build a svm a Solana VM um ler two on ethereum right so it's going to be interesting how how that's going to play out from a breakdown in terms of sectors okay I'm running out time but okay from breakdown in terms of sectors uh this is all of the bubbles that you would expect uh to appear I think no surprises that decentralized exchanges or amm are still the most popular sector within D5 uh and Then followed by Landing I think lsd's liquid staking has gotten pretty big as well uh but the the narrative uh this quarter was really oracles right uh really saw significant growth um most of you would have heard of chainlink right um I think doing a lot of good work and uh that's also being reflected uh in the price even though they are not the largest Gainer uh the largest Gainer is something called t uh within the Oracle um ecosystem uh the other one are real world assets I'm going to talk about that slightly in the next slide but yeah it's another emerging um Trend and emerging I would say segment within defi that that we are tracking here at coo I I want to point out um two major Trends uh in def I I don't have charts for them but hopefully give you an idea of you know s of what's Happening you're going to hear from some of them outside as well uh later in the conference either today or tomorrow one of them is LSD F so since we have lsds already right we have liquid staking tokens that are liquid then they can be part of the Lego right so LSD is the main core primitive and people are starting to build stuff on top of it uh you can see the slides I won't drain the slides I think the main one is pandle I think tn's going to speak uh from pendo great I think T TN which is one of the founders is going to speak tomorrow uh he's going to he you'll be able to tell you more about that project the other one that's pretty big is Libra so on the top right corner Libra is uh is a LSD based stable coin so it's a stable coin that now uh is is backed by lsds and gives you the yield from those lsds as well as sort of like a like an interest so I think it has about 200 plus million uh TBL uh Pendle is sort of 100 plus million uh the other hot one obviously is igen layer I think uh that's a emerging narrative as well people are talking about reaking so after you stake it once in the protocol what else can you do can you stake it second time take it third time take it fourth time to to use it to secure other apps right uh so so that's also something that's quite interesting the other thing to talk about is uh real assets really it's the I think the the continued integration and I think you know uh continued integration of you know real world and what we call trafi right traditional Finance with uh onchain web tree uh crypto and defi right so you can see the projects um most of you probably familiar with pexg right those were the start of the you know just tokenizing gold but really now I think the the big trend is uh on the far left corner treasuries right on chain treasuries they now have about 665 million um TV uh market cap on chain uh surprisingly I think it's the old guys right the traditional guys who are leading the charge Franklin ton which is one of the biggest asset managers in the world is like half of that market cap is like yeah so it's I think it's a it's to me I think it's a huge validation of you know the track five World starting to embrace more right just when we thought like we're going to where crypto like djm people are during winter um the TR by guys have W woken up I think and are starting to actually embrace this in a big way um the the big names like JP Morgan Black Rock all have more or less talked about tokenization at some point and you're going to see this sector I think grow uh even more um talking about treasuries I I will point out that you know so I said about 665 million in tvl uh sorry in market cap uh half of that actually on Stella but the other half is uh pretty much on ethereum itself yeah nfds uh don't really want to talk about nfds it's s of like punching down um at at at the moment um yeah uh sorry about that but uh it it I think I think pretty much it's one of the sectors that sort of Boom in 2021 right and it's really going through its first bare Market cycle so I think people are still trying to figure out what to do with nfts you know beyond pfps uh we have seen some success I know there are some PES in the in the in the audience you know congrats to you guys uh but by and large I think Market is down pretty back um I think I I didn't put up a chain breakdown chart but I think you can see from the name I mean blur is still in the lead and openc is close behind most of this are built on ethereum okay three okay there is a timer okay uh yeah about finish uh so yeah bad times for nfds really not much to see but but yeah I mean I think a lot of the interest or a lot of the Focus right now is really on blood right and to a certain extent it's Landing platform blend right and uh seeing how they will continue to Duke it out for market share whether the continuously giving people air drop of blur tokens is going to work or is just going to all run out the the impact of it anyway is going to run out at some point lastly I think I want to close out I have some slides on exchanges uh because these are still pretty important in in our space and uh this is a chart of sport centralized exchanges I already mentioned that volumes are down by 20 uh are down this quarter and on on sport centralized exchanges these are down by 20.1% uh the big thing I will point out is uh binance losing its market share now um it was 50 it was always above 50% for a long time but now this is the first quarter that it has fallen below um 50% um yeah uh if we move on to the decentralized bits I think maybe more relevant for ethereum Builders today this is how the decentralized landscape for amm look um they are down they're down a bit more uh compared to their centralized counterparts about 31.2% uh but you can see I think like Unis swap is the Undisputed leader uh right now and has been for a long time uh we aggregate this across different chains so this is not just on ethereum so you know uh multi-chain or cross chain deployments of uh amm have been a recurring theme uh for a long time and you are seeing that impact actually play out you know they they have been able to get market share not just on ethereum but on places like polygon arbitrum optimism and and those things as well so yeah um other things to point now not really me yeah I think this is the last one so so just give me 30 seconds to W um activity right so uh this is the last one so it's the same chart from before I just layer on a chain uh view instead of uh of of of the pro individual protocols I think no surprise that ethereum is still dominant uh you're seeing some of the effects I think of's uh airdrop wear off right it was pick in April when you know the air drop happened and it sort of have moderated over time and I think it's going to be interesting to see whether you know it can so of hold on to its position as number two I would say right so it it briefly overtook uh BSC right with traditional uh more more traditional uh number two but uh now they are pretty much neck and neck as of as of second so yeah uh This is the End um quick quick quick quick summary um like I said going to be published in about two weeks do watch out for it on our website hopefully you guys are all coin Geo users um if you have any questions I guess I'm hanging around for a few more hours but yeah thanks and pass on to the next guy okay Round of Applause for Jo from K for sharing so much insightful