Research Summary
The report provides a comprehensive analysis of Sia, a decentralized cloud storage network that uses a Proof-of-Work blockchain and a contract-based storage model. It covers key metrics such as storage utilization, active contracts, new contracts, storage prices, bandwidth costs, transaction fee price, network revenue, and block rewards. The report also discusses Sia’s development roadmap and recent grants approved by the Sia Foundation.
Key Takeaways
Active Contracts and New Contracts
- Decline in Active Contracts: The report notes a 12% quarter-on-quarter (QoQ) decrease in active contracts, following a 54% decrease in Q2’23. This decline is attributed to a drop in the number of developers in the crypto space and issues with third-party interfaces that created storage contracts for Sia users.
- Decrease in New Contracts: New storage contracts fell by 13% QoQ. The report suggests that this decline is influenced by the size of the Web3 developer pool and the current market sentiment’s effects on decentralized application development.
Storage Utilization and Prices
- Increased Storage Utilization: Despite a QoQ fall in new contracts, storage used increased by 4% QoQ. Users appear to be storing larger files per contract on average. The average utilization rate increased by 4% QoQ, up to 29%.
- Rise in Storage Prices: Average daily storage prices in Siacoin (SC) during Q3 had the largest QoQ movement (+38%) in a year. This movement may be driven by the 11% drop in the SC price QoQ and the increase in storage utilization.
Bandwidth Costs and Transaction Fee Price
- Increased Bandwidth Costs: Upload and download bandwidth prices increased by 27% and 28% QoQ, respectively. This uptick aligns with the decline in the USD value of SC and the increase in storage utilization.
- Rise in Transaction Fee Price: The average daily transaction fee reached its highest point in the past year during Q3, with a 5% increase to $0.031. This increase may be attributed to the rising cost of new contracts due to larger file sizes.
Network Revenue and Development Roadmap
- Growth in Network Revenue: Sia’s network revenue grew 15% QoQ, following the upward direction of nominal storage used (+4%), storage prices in USD (+21%), and bandwidth costs in USD (+12% for upload and +15% for download).
- Development Roadmap: Sia’s recent developments largely focus on giving network participants a better user experience. The key roadmap items are a continuation from Q1 and Q2, with the Sia Foundation continuing to implement new features on top of existing modules and preparing them for the upcoming hard fork.
Actionable Insights
- Investigate the Potential of Sia’s Storage Utilization: Despite a decrease in active and new contracts, Sia’s storage utilization increased in Q3. This suggests that users are storing larger files per contract on average, which could indicate a shift in user behavior or needs.
- Monitor the Impact of Storage and Bandwidth Prices: The report notes significant increases in storage and bandwidth prices in Q3. These price movements could have implications for user behavior and the overall demand for Sia’s services.
- Assess the Implications of Sia’s Development Roadmap: Sia’s ongoing developments aim to improve the user experience. The impact of these developments on user engagement and network activity could provide insights into Sia’s future growth potential.
