Coin Metrics is committed to building the crypto economy on a foundation of truth, providing authentic and accurate data with the highest standards of clarity and precision. Keeping this mission in mind, we are proud to share a new monthly resource aiming to bring more transparency and credibility to the rapidly evolving crypto space.
Introducing: Movers and Shakers
As new assets reach a certain degree of accessibility to investors, specifically as they achieve alignment with our Market Selection Framework and the Trusted Volume Framework, Coin Metrics uses its crypto expertise to describe the assets’ context of use. The following assets are expected to reach alignment this month:
Arbitrum (ARB)
Arbitrum (ARB) is a blockchain utilities protocol that utilizes Optimistic Rollups to offer scaling solutions on Ethereum. Arbitrum provides users faster speeds and cheaper transaction costs when using Ethereum dApps. There are two chains: Arbitrum One, which houses major applications – mainly DeFi protocols, and Arbitrum Nova, which uses milder trust assumptions in exchange for lower fees to cater to higher-volume applications. The project consists of four major components: (1) Arbitrum Nitro – the underlying Arbitrum Optimistic Rollup technical stack; (2) Arbitrum Rollup – where transactions are batched and posted to Ethereum to inherit its security; (3) Arbitrum AnyTrust – a variant of Arbitrum Nitro that instead relies on an external Data Availability Committee, providing quicker transactions and lower fees in exchange for milder trust assumptions; and (4) Orbit – a permissionless platform that launches layer-3 scaling solutions on Arbitrum. The ARB token is the project’s native token, allowing holders to vote on Arbitrum DAO governance proposals. The leading dApps on Arbitrum currently are GMX, Uniswap V3, and Aave.
Aptos (APT)
Aptos (APT) is a layer-1 smart contract platform based on the Move programming language. Move is a new smart contract programming language focused on flexibility and safety that was originally developed by Meta as part of their Diem blockchain initiative. As such, much of the Aptos team is composed of former Diem employees, including its founders. Aptos also uses parallel processing execution, and a unique Byzantine Fault Tolerance consensus mechanism, Aptos BFT Consensus, in an attempt to improve efficiency. APT is the native token of the blockchain with three primary use cases: network fees, validator staking, and governance. PancakeSwap is currently the largest dApp on the Aptos blockchain.
Flare (FLR)
Flare (FLR) is a EMV-compatible layer-1 smart contract platform. Flare’s value proposition is to create interoperability between blockchains and between blockchains and “Web2.” The network is built around two native interoperability platforms: the State Connector and the Flare Time Series Oracle (FTSO), which allow for on-chain decentralized acquisition of blockchain and time series data, respectively. The State Connector keeps consensus with external blockchains, while the FTSO is an oracle for off-chain assets. FLR is the native token of the blockchain with three primary use cases: network fees, validator staking, and governance.
Astar Network (ASTR)
Astar Network (ASTR) is a scalable, decentralized blockchain for cross-chain interoperability. Astar is the largest smart contract platform in the Polkadot ecosystem, supporting both Wasm and EVM. While providing native access to the Polkadot ecosystem through its parachain slot, Astar also has bridges into other major ecosystems, including Ethereum, BSC, Cosmos, Polygon, and more. Through the #Build2Earn program, Astar offers a basic income to dApp developers through inflation and provides direct funding to projects through the Astar Incubation Program. ASTR is the native token of Astar with three primary functions: dApp staking, transactions (fees), and on-chain governance.
Blur (BLUR)
Blur (BLUR) is a decentralized NFT marketplace and aggregation platform that caters towards professional NFT traders. Blur allows users to list NFTs for sale on multiple platforms simultaneously and provides advanced trading tools and aggregated data including aggregate prices, volume, supply, etc. Currently, it connects to X2Y2, OpenSea, and LooksRare. Released through airdrops, the protocol’s BLUR token (ERC-20) allows the community to actively participate in governance of the Blur DAO, which includes the ability to control protocol’s value accrual and distribution.
Ethereum POW (ETHW)
Ethereum POW (ETHW) is a hard fork of the Ethereum blockchain that occurred after the Ethereum Merge. The Merge occurred on September 15, 2022 when the Ethereum network went through an upgrade that removed the original Proof of Work Consensus through mining and merged with the Beacon Chain where Proof of Stake took over as the accepted Consensus Mechanism. During this Merge, Miners of the Ethereum Network maintained a version of the previous network. Support for ETHW tokens was made by a few exchanges. ETHW is a native token of Ethereum Proof of Work, it is used as rewards, payments, and transfers.
Terra 2.0 (LUNA)
Terra 2.0 (LUNA) is a smart contract platform that emerged from Terra Classic in May 2022. After the depegging of USTC, Terra Classic’s algorithmic stablecoin, the Terra community decided to create a new blockchain without the stablecoin. Older users were airdropped new LUNA tokens. Terra 2.0 consists of three core parts: (1) Terra Core, the implementation of the protocol, (2) Terra Station, the official wallet; and (3) Terraform Labs, the development entity that also maintains the platform. LUNA is currently used for staking, governance, and paying fees.
DigiByte (DGB)
DigiByte (DGB) is a UTXO blockchain value transfer token that was launched in January 2014. The project made use of Litecoin’s code, but with several modifications. It uses a Odocrypto consensus algorithm that modifies itself every 10 days to prevent ASIC dominance. The project also uses DigiShield, which stabilizes block time despite changes in mining hash power in real-time. DigiByte was one of the first decentralized networks to implement SegWit to improve network scalability. DigiByte now also has built smart contracts into its blockchain.
Dusk Network (DUSK)
Dusk Network (DUSK) is a privacy-focused, layer-1 smart contract platform focused on financial applications. It uses a novel Proof-of-Stake consensus, called the Succinct Attestation, that uses settlement finality guarantees, which is key for financial use cases. Dusk Network also relies on the Segregated Byzantine Agreement (“SBA”). According to DUSK developers, SBA combines “cryptographic sortition (lottery), stealth time-locked transactions (hidden stake amounts) and a reputation module to increase the chances of selecting honest nodes and further promote decentralization.” The network uses confidential security contracts, which encodes privacy measures into a traditional smart contract with zero-knowledge technology. DUSK tokens are used for network services, deploying and running smart contracts, and staking.
Hashflow (HFT)
Hashflow (HFT) is a multi-chain, decentralized exchange designed for interoperability, zero-slippage, and MEV-protected trades. Hashflow uses a request-for-quote model, where users get quotes directly from market markers with MEV protection and without slippage. While settlement and swapping occur on-chain, Hashflow’s model uses quotes from market makers to price assets off-chain. Market makers must cryptographically sign quotes that remain unchanged for the duration of the trade to ensure there is no front-running or arbitrage. Hashflow also offers swap across chains without the use of bridges or synthetic assets. Hashflow is currently available on Ethereum, BNB Chain, Polygon, Avalanche, Arbitrum, and Optimism.
IDEX (IDEX)
IDEX is a decentralized exchange that attempts to combine features of a traditional order book with an automated market maker. IDEX uses an off-chain trading engine for execution to bring top performance with guaranteed sequencing. It also uses an off-chain order book, which minimizes gas costs and maximizes the benefits of the trading engine. IDEX trades are matched with the best limit orders, but also an AMM liquidity pool. Ideally, the combination enables tighter spreads and higher liquidity without the expense of a traditional market maker. The IDEX token is the native token of the platform, with 50% of all transaction fees distributed to IDEX stakers.
Liquity (LQTY)
Liquity (LQTY) is a decentralized borrowing protocol that allows ETH holders to borrow its stablecoin, LUSD, using their ETH as collateral. The borrowing process is as follows: users deposit ETH into the Liquidty smart contract and receive LUSD in return at a 1:1 ratio (the protocol charges an Borrowing Fee as a one-time fee for newly drawn liquidity to support the peg with the USD). To avoid liquidation, borrowers must maintain a minimum collateral ratio of 110%. If the value of deposited ETH falls below this ratio, the smart contract automatically and autonomously liquidates the borrower’s position to maintain the minimum ratio. The protocol is designed to offer interest-free liquidity, a low collateral ratio, and a hard price floor. It does this through an algorithmic stability mechanism that maintains the stability of LUSD. LQTY is the native token of Liquity Protocol and can be staked to earn rewards. Early adopters of the protocol can also receive LQTY as a reward for participating in various programs such as building a front end for the protocol or depositing LUSD into the stability pool. Overall, Liquity Protocol provides a governance free, censorship-resistant, and decentralized borrowing platform with a unique algorithmic stability mechanism with a low collateral ratio.
Maple Finance (MPL)
Maple Finance (MPL) is a decentralized lending platform that enables institutional borrowers to have access to undercollateralized loans. Maple Finance connects lenders and borrows through lending pools that are run by accredited pool delegates. These delegates manage, attract capital, and commit loans for the lending pool. They each have their own investment strategy and underwriting process. Reputable crypto-institutions borrow the undercollateralized loans with KYC-AML, credit checks, and term agreement requirements. However, any user can deposit capital into the lending pools to generate interest returns. The MPL token is the governance token of the Maple Protocol. It also enables holders to earn fees through staking.
Rocket Pool (RPL)
Rocket Pool (RPL) is an Ethereum liquid staking protocol that functions as a decentralized layer to lower the barriers to entry for ETH staking and operating a validator node. Protocol users form “minipools,” formed from ETH deposits in lower increments than the usual protocol-required 32 ETH to be a validator. This deposit pool is combined with a node operator’s contribution of 16 ETH which together make up the capital requirements for a full validator. Depositors to the protocol receive a liquid-staking derivative called rETH which represents staked ETH and accrues a proportional share of staking rewards. The RPL token is the protocol’s governance token and also creates additional incentives for node operators in the form of rewards as well as insurance against any slashing penalties incurred for poor validator performance.
Polkastarter (POLS)
Polkastarter (POLS) is an Ethereum and Binance Smart Chain permissionless DEX to launch and manage Initial Decentralized Offerings (IDOs). On Polkastarter projects can raise funds using fixed swaps where the purchase price of the token is fixed until the initial supply is exhausted. It is aimed at early-stage projects who want to sell a portion of their tokens to whitelisted community members, while protecting against any one member owning an outsized position of the token. Projects interested in using Polkastarter can benefit from a lower cost of fundraising, generate early community growth, and ensure a sustainable token distribution. For individuals interested in participating in IDOs on Polkastarter, they receive exposure to projects in the early stages of their growth that are usually reserved for larger investors.
The main components of Polkastarter are (1) the fixed swap model, (2) the interoperability between BSC and ETH, and (3) the whitelisting of community members. The native token for Polkastarter is POLS which allows holders to (1) have their account whitelisted, (2) participate in liquidity mining, and (3) participate in governance. In order to get whitelisted, an account needs to hold at least 250 POLS. For every 250 POLS an address holds it gets an additional entry in the lottery to be whitelisted for an IDO.
Onyxcoin (ONYX)
The Onyx Protocol (ONYX) is a cross-chain interoperability liquidity protocol designed as a shared, multi-asset, cryptographic ledger. It supports the coexistence and interoperability of multiple independent networks, with different operators, sharing a common format and capabilities. Using the principle of least authority, control over assets is separated from control over ledger synchronization. The Onyx Protocol allows any network participant to define and issue assets by writing custom “issuance programs.” Once issued, units of an asset are controlled by “control programs.” These programs are expressed in a flexible and Turing-complete programming language that can be used to build sophisticated smart contracts. Each network is secured by a federation of “block signers.” The system is secure against forks as long as a quorum of block signers follows the protocol. For efficiency, block creation is delegated to a single “block generator.” Any node on the network can validate blocks and submit transactions to the network. XCN is the governance and utility token for the Onyx Protocol. ONYX can be used for voting through the Onyx DAO and is also used for discounts, premium access, and payments.
Marlin (POND)
Marlin (POND) is a network scaling protocol that provides programmable infrastructure for blockchain protocols. It attempts to address the scaling disadvantages of decentralized peer-to-peer systems, which rely on public asynchronous communication by using high performance relay networks. The protocol is designed to make node incentives compatible with propagating blocks publicly. In addition, Marlin allows users with spare infrastructure to share their computational resources with application developers. MPOND is the Marlin governance and staking token while POND is an ERC-20 token used for network rewards.
Stacks (STX)
Stacks (STX) is a Bitcoin blockchain layer for smart contracts. It enables decentralized applications to be built on Bitcoin, leveraging its security, settlement assurances, capital, and network effects. Stacks expands the functionality and increases scalability of Bitcoin, allowing for decentralized finance and digital identity, without altering the Bitcoin base protocol itself. The Stacks protocol uses a “Proof of Transfer” consensus mechanism, which uses already-mined BTC to incentivize Stacks miners to maintain the peg between the Bitcoin and Stacks blockchains. Stacks tokens (STX) are used to pay for smart contract operations on the Stacks blockchain and can be locked temporarily to support the network’s security and consensus, similar to other proof-of-stake protocols.
Want these insights delivered straight to your inbox? Sign up for our mailing list.
© 2023 Coin Metrics Inc. All rights reserved. Redistribution is not permitted without consent. This newsletter does not constitute investment advice and is for informational purposes only and you should not make an investment decision on the basis of this information. The newsletter is provided “as is’ and Coin Metrics will not be liable for any loss or damage resulting from information obtained from the newsletter.
