Research Summary
The report introduces a new on-chain metric, Chain GDP, to measure economic activity on a blockchain. It discusses the limitations of current metrics and explains the methodology behind Chain GDP. The report also provides an analysis of Chain GDP data for various blockchains, highlighting Ethereum and Solana’s performance.
Key Takeaways
Introduction of Chain GDP
- New On-Chain Metric: The report introduces Chain GDP, a new metric to measure economic activity on a blockchain. It captures both the dollar value and activity on the chain, making it a more comprehensive measure than existing metrics.
- Methodology: Chain GDP is calculated as the sum of all fees generated on applications on a chain. The data for this metric is pulled from DefiLlama’s Fees & Revenue API.
Limitations of Current Metrics
- TVL, TX Count, and DEX Volume: The report criticizes current metrics like TVL, TX Count, and DEX Volume for their limitations. TVL represents dollar value but not activity, TX Count represents activity but not dollar value, and DEX Volume only captures a certain type of economic activity.
Analysis of Chain GDP Data
- Ethereum’s Dominance: According to the Chain GDP data, Ethereum is the clear leader, with around $10-15M in GDP on most days.
- Solana’s Growth: Solana has shown significant growth, with its Chain GDP reaching around $6-7M, making it the second largest chain by this metric.
Future Plans
- Sharing Scripts: The author plans to share the scripts used to pull the Chain GDP data on GitHub, allowing others to test them out.
- Future Updates: The author intends to provide updates on Chain GDP data in future newsletters and possibly create an online platform for accessing the data.
Actionable Insights
- Explore Chain GDP: Blockchain analysts and enthusiasts should explore the new Chain GDP metric to gain a more comprehensive understanding of economic activity on a blockchain.
- Monitor Ethereum and Solana: Given their strong performance in terms of Chain GDP, Ethereum and Solana should be closely monitored for potential growth opportunities.
- Utilize Shared Scripts: Once the scripts are shared on GitHub, users should utilize them to pull Chain GDP data for their own analysis.
