Research Summary
This report provides an in-depth analysis of the bridges market sector in the crypto industry, focusing on key business drivers and protocol fundamentals. It highlights the growth of monthly transfer volumes, the increasing usage of cross-chain messaging protocols, and the role of bridges in connecting different blockchains. The report also discusses the performance of various projects in the sector, including Stargate, Base, and Across.
Key Takeaways
Growth of the Bridges Market Sector
- Significant Growth in Transfer Volumes: The report reveals a 360% YTD growth in monthly transfer volumes, largely driven by Stargate. This indicates a growing demand for bridges in the crypto industry.
- Increasing Usage of Cross-Chain Messaging Protocols: Cross-chain messaging protocols such as Axelar Network and LayerZero are gaining traction, enabling the transfer of data and transactions across different blockchains.
- Role of Bridges in Blockchain Connectivity: Bridges play a crucial role in connecting different blockchains, enabling cross-chain asset transfers and expanding access to liquidity. Their importance grows as the number of blockchains increases.
Performance of Key Projects
- Stargate’s Dominance: Stargate, the current market leader, represented about 66% of the total transfer volume market share in July. Its P/S ratio suggests that its STG token may be undervalued compared to competitors.
- Base’s Rising Popularity: Base, a blockchain launched by Coinbase, has received over $250m in deposits over the last month through their native bridge. It represents potential access to Coinbase’s +100m verified users.
- Across’s Milestone: Across, another key player in the sector, has passed $2b in total transfer volume, indicating its growing influence in the market.
Actionable Insights
- Investigate the Potential of Stargate: Given its dominance in the market and potentially undervalued STG token, Stargate presents an interesting opportunity for investors and stakeholders.
- Explore Opportunities with Base: With its rising popularity and potential access to a large user base, Base offers lucrative opportunities for cross-chain bridging teams and investors.
- Monitor the Growth of Cross-Chain Messaging Protocols: The increasing usage of cross-chain messaging protocols suggests a growing demand for such services. Investors should keep an eye on leading projects in this area, such as Axelar Network and LayerZero.
