Research Summary
The report provides a comprehensive analysis of the Hedera Network’s performance in Q3 2023. It covers key financial metrics, network usage, development, decentralization and security, ecosystem overview, and network services. The report highlights the network’s growth amidst a challenging crypto climate, with a record-setting 99 million daily average transactions and revenue surpassing $1 million for the first time.
Key Takeaways
Financial Performance and Market Capitalization
- HBAR’s Growth Amidst Crypto Downturn: Despite a 5.8% decrease in the total crypto market capitalization, Hedera’s native token, HBAR, exhibited a 7.6% QoQ growth in circulating market capitalization, concluding the quarter at $1.7 billion. The fully diluted market capitalization increased by 2.5%, settling at $2.5 billion by the end of the quarter.
- Revenue Growth: Hedera’s revenue, derived from network transaction fees, grew by 30% QoQ, crossing the $1.0 million mark for the first time. This rise was attributed to a 37% quarterly growth in transactions, predominantly from the Hedera Consensus Service.
- HBAR Supply: As of the end of Q3, 33.4 billion HBAR, representing 67% of the total supply, was in circulation. The Treasury Management Report forecasts that approximately another 2% of the HBAR total supply will be unlocked in Q4 2023.
Network Usage and Development
- Record Transaction Volume: The Hedera Network’s transaction volume increased for the fifth consecutive quarter, achieving a new record of 99 million daily average transactions. The Hedera Consensus Service accounted for 99% of all transactions on the network.
- Smart Contract Activity: Despite a decrease in active smart contracts for the second successive quarter, the Hedera community introduced new developer-focused features and integrated the JSON-RPC codebase, enhancing the Hedera Network’s compatibility with EVM networks.
Decentralization and Security
- Hedera Governing Council: The Hedera Governing Council, consisting of 29 global organizations, supports the growth and development of the Hedera Network, including the operation of Hedera validator nodes. In Q3 2023, the Hedera Network reported 28 billion HBAR staked, representing 85% of the circulating supply and 56% of the total supply.
Ecosystem Overview
- DeFi and Stablecoin Developments: The Hedera Network concluded Q3 2023 with a Total Value Locked (TVL) of $31 million, marking a 29% increase from the previous quarter. SaucerSwap accounted for 87% of Hedera’s overall TVL. The Hedera Network’s stablecoin market cap maintained its position, ending the quarter at a market cap of $3.6 million.
- NFTs and Gaming: The number of active NFT addresses on the Hedera Network grew, averaging 1,300 daily active NFT addresses, marking a 162% QoQ increase, while the number of transactions decreased by 33%, equating to 5,900 daily transactions.
Actionable Insights
- Investigate the Potential of Hedera’s EVM Compatibility: With the integration of the JSON-RPC codebase and other developer-focused features, Hedera has enhanced its compatibility with EVM networks. This could potentially attract more developers to build decentralized applications on the Hedera Network.
- Explore Hedera’s Growing DeFi Ecosystem: The growth in Hedera’s TVL and the debut of new protocols like SaucerSwap indicate a growing DeFi ecosystem. This could present opportunities for developers and investors interested in DeFi projects.
- Consider the Impact of Hedera’s Stablecoin Developments: The introduction of the Stablecoin Studio toolkit and the successful completion of a stablecoin remittance proof-of-concept pilot could potentially boost the adoption of stablecoins on the Hedera Network.
