Comparing the top five blockchains by usage data

Transcript

[Music] GM good morning welcome to the milk Road show The Daily crypto show that's as enlightening as finally understanding the offside rule while watching the Euro Cup soccer I'm your host Jay Hamilton and today we're talking about the top five blockchains in 2024 why well because we're halfway through the year and we wanted to see if the narratives we're seeing online and in the media match the actual number of users and volume and in order to do this we're going to be reviewing five ESS cial charts that every crypto investor should be looking at on a regular basis so if you're watching on YouTube or Spotify great if you're listening don't worry we'll explain each chart for you as we go here to guide us is milroad co-owner

and head of research Kyle rehead Jay welcome back welcome back from the big bachelor party big bachelor party it's good to be back I got the energy don't worry I had I had an extra day to sleep and rest up New York's a crazy City what a party what fun but that's not the topic of today let's talk about these five charts and why they matter so much KY let me just ask this first question why is it important for investors to understand the actual numbers behind blockchains how does this give them an edge in their Investments I mean it's funny it shouldn't really give you an edge because it's all public information and so easy to look at but most people just actually don't uh and so you have a lot of investors mainly retail who just

kind of invest based off Nar narratives and the problem is is that a lot of times in this space narratives can get spun especially when you're talking about Media or social media people can change it or narratives change and maybe you haven't caught up to speed yet and so you might hear that this is the fastest and the best blockchain or the you know blockchain with most liquidity and then things can change in a matter of weeks to months and so the beauty of blockchain is you can just look on chain and you can get all the metrics you need right there in the tech world in the normal world the trii world you can't really do that you have to wait for quarterly reports from the business themselves and trust their data but on chain we can look live anytime we want and that's pretty cool and when we

look at these numbers of the past six seven months now basically what is it that you're looking for when you're looking at numbers over a six-month Horizon as opposed to looking at numbers on more of like a weekly or monthly Horizon which is typically what we tend to do more often yeah you really just looking for Trends right what's the changing Trends in terms of is there a certain blockchain that's all of a sudden doing really well in a number of metrics and and ideally it's a bunch of metrics then you're like okay something is going on there you might want to look further into that or you're like wait a minute why is that number so is that actually true because you also got to remember that a lot of these metrics chains can manipulate now in the biggest ones like Bitcoin and things like that

like we're probably not able to manipulate much but when you look at numbers of like top metrics on layer twos a lot of those things are getting manipulated whether it's like in a bad way which is actually like running a bot to like make it look like you have more users than you actually do or it's just incentive mechanisms and like yeah it's got a bunch of users or a bunch of liquidity but it's not real and it's not sustainable and so when you look at these metrics you also have to kind of understand the background of them which we'll talk about as we go through each one here and so hopefully that'll understand help you understand how to like analyze these as well because sometimes the data you see is not always true and we're here to give you the truth the delicious milk to make your

Investments flourish let's start off by looking at monthly active users so I've got the monthly active user us chart up on screen of 2024 year to date the top five chains as of today are salana and Tron almost exactly the same 14.3 million each BNB chain 12 million polygon 10.3 million and Bitcoin 7.7 million monthly active users Kai when you look at this chart of monthly active users what are you thinking about what are you noticing so a few things so first of all monthly active users is wrong these are monthly active wallets these are not users and a lot of this industry mixes that up I see charts go viral all the time saying monthly active users and then comparing that to like

you know other Tacker trapi these are not verifiable users they are just wallets I can have 10 wallets I can have 100 wallets I can have a thousand million wallets and in fact many do and so you need to take this number with a grain of salt and look at it directionally there is not actually 14 million people using salana not even close there is much much less maybe it's maybe it's not even a million I don't know the the error here but it is nowhere near that and so that's the first thing to understand the second thing is just looking at these Trends there are some really really cool Trends in this chart if you're looking at this Salona started out in what looks like fifth place but I think it's actually much lower than that this is just showing the top five currently so it was

maybe 10th or 15th and it has just done amazing this year to get up to basically the number one spot which was pretty cool to see and so that's pretty impressive the other thing to note here is we are missing one and it is one that's not the biggest but one of the biggest and that's ethereum in its ecosystem the reason that we don't see ethereum or n2s on here is because their users are fragmented right so ethereum has a certain amount of users and then base and then optimism and then arbitrum Etc but really when you're thinking about the economic value of ethereum its entire ecosystem and so what you need to do is take ethereum plus all the users on its L2 right and combine them and it would be up here in this level as well I think it is last I checked somewhere

around maybe 8 or 9 million so it would be probably well I guess polygon is is four so if you want to count polygon maybe you don't but it's somewhere around 8 to plus million so it should be in here as well so those are kind of the the key things I'm looking at Tron doing really really well which is impressive and that's just because it has stable coins and so it's just done well through the bare Market through the bull market and then the one thing is Bitcoin Bitcoin started out at second at the beginning of this year and it is now in fifth at 7.7 million starting at almost 13 million so that's interesting I think that's probably because of ordinal and runes which they've had kind of some hypee around it could also be because the ETFs were approved and so more

people don't need to use onchain anymore and they can just buy their assets on chain or sorry in in the ETF and do that in taxfree savings accounts so maybe less people are actually going on chain as a result don't know that's just a thesis is just my opinion but the clear winner here is salana just absolutely crushing it that chart's pretty wild they went from three million monthly actives to 14 in a matter of six months that's incredible well speaking about salana this next chart's really going to blow your mind let's go to weekly transactions I've got the chart up here with weekly transactions and basically if you're looking at this chart all you can see is Solana because Solana leads the way with 1.8 billion weekly transactions currently the next closest is Tron with 47 million and then we have

a bunch more under that so we're going to actually look at this in two charts Kai first let's look at it with salana because you can't even see the rest and then I'll pull up the next chart where we can see the next top four chains what do you see when you think about salana and having so many weekly transactions salana literally is in a league of its own and I don't know that the industry has really kind of wrapped their heads around this yet people complain about sometimes transactions don't go through on salana and it's like look at the problem that salana has versus everyone else and you can call it a problem or maybe it's not a problem I don't know but the fact that they are 1.8 billion whereas the next highest is 47 million it is literally orders of magnitude bigger uh and so yeah yeah if it has a

couple problems you know approving transactions or getting transaction through I think we can give it a little bit of leeway because of how many more transactions it's actually doing here it's unbelievable and it's doing it well keeping fees extremely extremely low so in terms of the tech this just tells you like salana has something here and look what are these transactions we don't know a lot of them are transactions they are a lot of bots that are trying to Arbitrage and so a big bulk of these transactions actually don't go through uh and so you got to yes it's not actually 1 Point whatever it is 8 billion transactions in the week but the fact that it can process so many and it's still this far ahead there's something there the fact that people actually want to Arbitrage that chain

shows there's value there shows there's something to do there right if you could Arbitrage and make money on any chain they would do that but they're not they're doing it in salana because that's where the opportunity is and so there's economic value there and so people are doing a lot of activity on that chain it's also mem coins AI dpin like all the things that you can't do on most other chains they're happening on Sal so it's this light years ahead of everyone else yeah if you want to hear deeper of Kyle's thoughts and his thesis around his bull case for the Solana investment right now we have a past episode not too long ago where we make a prediction for the price of salana going to 1K why we think it's going to get there as well as talking about blinks but that's not the only news that came

out about salana recently Kai they just hit a all-time high in monthly economic value with over 90 million cashed in in June alone make sure you check out our new newsletter to read about that so if you're not subscribed to our newsletter make sure you do okay let's go to the rest of the chains in weekly transaction volume Kai when we look at the rest of the trains we have Tron at 47 million ton it's so tough to say those side by side ton the open network at 34 million polygon at 29 million and BNB chain at 23 million what do you notice when you look at this Tron has just had a steady incline and has been doing this for a long time and that's because they have a lot of usdt and so they just they're

basically the stable coin chain and they're really big in Asia for those that are in the US you're like who uses Tron like no uses Tron what are you talking about and it's all it's mainly Asia and South America and they are using it for stable coins and we believe stable coins is probably one of the biggest use cases currently in crypto and and will be for a long time and so hey whatever you think of Tron doesn't really matter it's getting used and there's a lot of people just moving stable coins which is great to see the other big number here is ton ton basically went from zero it's not actually zero it looks like on this chart but you know last place let's call it from all the l1s to basically third place for transactions and that is a massive massive jump why distribution

it's connected in with telegram and so it's got the distribution and even if it doesn't have the best tech right it doesn't have the best community it hasn't been around the longest it doesn't matter it's when a blockchain can get distribution in some way or another it can perform well and that's what ton has done and they have been one of the talks of the year as a result of that Bas is the other one Bas is brand new they've been around for a year and yet they have tons of adoption compared to all the other layer twos and again it's because of adoption because of coinbase and so I think ton wasn't on a lot of people's Radars last year it needs to be this time around because you can see transactions went from I don't know what the number is it's so small

that you can't see in January 2.5 million two is it 2.5 million yeah 2.5 million all the way up to 35 million in a matter of six months incredible growth when you look at Tron and you mentioned stablecoin investing and we talked recently on an episode about stable coins being a sector that we are very bullish on currently around 6% of total crypto market cap is stable coins we believe that's going to go up considerably over the next 18 months is Tron where you're allocating your Capital if you want to invest in stable coins so I don't not because of I don't like Tron or something I just don't use Tron it's not in my area and so I don't understand it enough one of the things I

think when you're making investment you should use that application or that protocol andron for me is just not something that is I mean sure it's accessible it just doesn't make sense for me to use if I'm going to use stable coins I'm probably going to use Bas or maybe salana so I don't but when we we actually put out a pro report on stable coins and how to capitalize on the opportunity and there was I mean we said maker we said Athena of course we talked a ton about those but there's also the the blockchains that are going to be settling those transactions we know stable coins are going to be the future whichever blockchain is the the home for and the real estate for that the stablecoin transactions and users it's probably going to do really well blockchain doesn't need any other use cases to work other than just stable

coins although if it has stable coins it's probably going to get more of defi right it's going to get a way to lend it's going to get a way to do leverage etc etc and so any chain that's starting to get adoption from stable coins is a good ground to build other things on and so yeah I think Tron is great Salon is great eth is great all to get exposure to the trend of of stable coins awesome okay let's go over to the third chart which is decentralized exchange trading volume that's Dex trading volume when we look at this we've got ethereum leading the way 11.5 billion followed closely by salana which is gaining on ethereum at seven almost 8 billion and then we've got arbitrum BNB and base all pretty close together ranging from 3.5 to 2.5

billion Kai what stands out to you in this chart the biggest Stand Out is base going from basically zero once again to becoming one of the top five in the entire space so that's obviously a big signal to what Bas is doing to what layer 2 is doing I mean you've got two of them here in the top five of all chains so I think that's quite interesting ethereum has the liquidity so it's just been number one for forever and then salana obviously you know this mainly has to do with meme coins is why their deck volume has gone up so much so that's great is that sustainable I'm not sure um salana has a lot less liquidity I think tbll might be one of the things we're going to look at here today but you need liquidity to have a lot of volumes and so you want to see volumes

because that means people are actually trading assets and doing things on chain and and so etherum ecosystem really crushing here because you got to remember base and arbitrum those trading volumes are great for Bas and arbitrum but where does that really end up settling all those transactions over on ethereum and so the fact that ethereum is there and plus two of its siblings let's call it are there as well it's a pretty big deal for the ethereum ecosystem does ethereum continue to gain here over time in your mind or does most of this move to the l2s most of it will move to the l2s I mean there is a lot of liquidity on ethereum and like Wales will move that so in terms of volume they'll do well it will not do well in terms of users and transactions but maybe you know big whales are moving

around hundreds of millions or billions of dollars which doesn't happen on salana very often and so it might it might keep Pace let's see I don't know but I think once we have millions and millions and millions of people doing every sort of transaction on here I would say ethereum falls behind but it's okay because it's about the ethereum ecosystem like really we should be adding these together and you would see kind of like how salana dominates on transactions the ethereum eal system dominates on volume uh and so really we should be doing that the other thing to notice is BNB has been on every single chart we've showed so far I think except for maybe one and no one really talks about it it's performed well this year um again I don't think BNB is necessarily a sustainable thing it's kind of like a test hub for ethereum

let's call it in the ethereum ecosystem but B&B has distribution right has binance the biggest ecosystem in the world and they have built their app their centralized exchange to push users on to BNB and so as a result it's done well I just don't like BNB because it has like 20 validators and so it's very centralized as a blockchain now that could change who knows maybe that will change but that's just why I haven't invested in it but it I mean hey it does well in all the metrics you mentioned total value lock Kai that's actually the chart we're going to look at next and why are we going to look at that well because liquidity is so important because you need liquidity in order to have more liquidity and grow so when we look at this we have this is incredible ethereum leads with

61% of all total value locked and the next closest is Tron at 8% BCS at 5% salana 4.9 4.1% arbitrum 3% and the list goes on what do you notice in this chart Kai yeah there's three l2s back toback there so it's arbiton blast base which is quite interesting look liquidity is important metric it shows you kind of like the trust right the more money on a blockchain means there's more people that actually trust it maybe it's less risk I would say potentially But ultimately you want that money actually moving right you want that money doing things and so it's I take this one this metric with a grain of salt the other thing is like if you think of arbitrum and blast for example when they launch

their own token that then counts as tvl on their on their chain whereas something like eth does not do that and so it's a bit weird when you're measuring l2s versus l1s but regardless seeing a lot of quiddity is no doubt a good sign as I said layer 2 is they can sort of manipulate that by counting their token in there depends on the way that the the platform is going to calculate it but either way as you said more liquidity big gets more liquidity and so if there's lots of money on there it means that when institutions come in they go oh there's already you know 80 billion doll on that thing well I don't mind putting a billion dollars on there right because obviously there's some trust there so it does matter for sure all right and then last up we're going to look at fees broken down by chain and

why are fees so important well trans action fees are obviously a big part of the revenue stream for each of these chains and this is the fundamentals that we love to see here at milk Road when we look at fees we've got ethereum absolutely dominating leading the way almost 1.7 billion in fees Tron next up around just below 800 million Bitcoin 700 million salana 250 million BNB next up with about a 100 million and then a whole bunch wave down low Kai what do you notice when you look at this yeah and by the way these numbers are over the last six months it's not like a monthly or a weekly number these are over the last six months fees is a tricky one and there's a lot of people that view this very very differently in

one sense as you said you get revenue and so Revenue matters Revenue matters actually when you do something with that Revenue in ethereum's case they burn half of this if not more than half of this so that matters that's making the token deflationary in bitcoin's World they don't burn any of it and so that revenue is actually not Revenue It's actually an expense because it makes that money and it goes to a minor and then the minor sells it to pay for the electricity so is that actually good Revenue H not really right now for security it could be a good thing because they can actually turn off issuance and their inflation that they have and then miners can continue to like exist so like it depends on kind of how you're looking at it the other thing is like yeah ethereum is making a ton of

money so okay that's bullish in terms of Revenue but that also means that at least in ethereum's case the users are paying a lot on gas fees and maybe that's not sustainable which is why they've created layer twos so like you really need to look at this one very differently what I really like to see here is salana for example which is gaining revenue and if if only we were showing the monthly on a monthly basis this year salon's trajectory is doing really really well their their fees in terms of the revenue they're making is going up and up and up yet the fees that they're charging to users is staying about the same now that's what you want to see ethereum for example though makes a lot of Revenue except typically in that instance it's users then it breaks ux right because its users have to pay

more now ethereum's fixing this through l2s So eventually you'll start to see starting to creep its way up here I'm not sure if this chart actually includes l2s it looks like maybe it's only l1s but if you included l2s you would start to see them creeping up because they're actually making a ton of Revenue while keeping it cheap for users and then bringing that Revenue back to ethereum so again you want to think about what's the business model here and yes of course a business model is great when it's making Revenue but if it's going to get under pric then you know that it's probably going to be uh a problem in the future this is how you see it in the real world so you need to think about that too so a lot of eth Maxis really love the revenues I do too and I

definitely love the burns that's happening on eth but you got to think more long term and so thankfully eth has its solution with layer twos which aren't shown here again salana doing really really good in terms of its growth Bitcoin I don't know who knows what they're going to do they need a lot more revenues for it to make sense but again they don't have a solution because that's going to make it more expensive for users so it's it's a weird world weird world when you're looking at revenues in terms of blockchains when you're looking at application tokens which we're not here but when you're looking at apps like maker Etc revenue is everything that's all you want to look at right it's a bit different here in blockchains because we're trying to build ecosystems where it's affordable for apps to actually live on and bring

on billions of users and so there's a lot of just Dynamics at play here and you need to think through these more comprehensive and the other thing I didn't mention is you had mentioned that salana is at an all-time high in terms of Revenue but that is economic value which is transaction fees plus me you got to also think that there's more ways than one for a blockchain or the valers of blockchain to make money it's not just about the transaction fees there's other ways that it can make money and so this doesn't take that into account either so again you got to look at data you analyze it take what you can get from it but realize think about what it's missing as well and that is the key to analyzing onchain data which most people are not doing so if you can do

that you really get an upper hand on the market and you can start to make investments um accordingly speaking about what's missing we want to know what you guys feel like you're missing from us is there anything you want us to talk more about on the show any feedback you have from these charts anything you guys want us to dive deeper into make sure you comment on YouTube or reply to our newsletter in any way or just me DM Kyle on Twitter Kyle readhead he'd love to hear you all right get send him a DM or DM myself at zxj Hamilton we want to make sure that we keep you guys informed so that you feel awesome about your Investments because while the rest of the market is Bears right now we ain't no bears around here we are

bullish and we are feeling good about the next 18 months and you guys should be too so hopefully you are Kai any final thoughts before we let you go final thoughts are very very bullish on markets right now although I know the rest of the world is not I think salana and eth are about to go absolutely crazy salana just looks like it's so ready to rip Lark and I talked about this a little bit yesterday when you were off and then the other L1 that I'm sort of looking at right now is ton we just did a pro report on them I think maybe two weeks ago now as I said earlier in the show distribution matters and if ton can continue to figure out how to get that distribution from telegram it's a really really big deal people don't realize like when you think about these numbers

again these monthly monthly active and it said users but it means wallets it's so small 14 million wallets and actually that means like one two maybe three million users like real people it's so small and so when any platform can all of a sudden bring on actually millions of people I don't think people realize what that's going to do for this industry and what that's going to do for that blockchain and so you need to be paying attention and ton literally overnight could bring on 10 20 30 40 50 whatever million people on chain and that is going to just be a game changer for this world and for the crypto world but it's not just ton others could do that maybe an L2 or maybe salana gets some sort of partnership that you just couldn't think of and when that happens and it's going to happen and maybe it's

the cycle maybe it's not it's going to be a game changer and it's going to make all these charts that we just looked at look like crap so be prepared and what and why can ton do that well because ton is one of the biggest apps in the world with over 900 million monthly active telegram not t did I say ton I meant telegram yeah telegram definitely not ton nobody's got 900 million active users in blockchain yet not yet but it's coming but make sure you go back we got a great episode with Alina the head of ecosystem at ton where we break down their numbers and talk about is it sustainable is it not what is driving these early growth numbers so you're going to want to do that if you're going to listen to ton and you're going to want to pay attention for the upcoming

Pro report Kai thanks so much for joining us again today in case you missed it here's what happened in crypto news today but first I wanted to give a quick shout out to our partner goric who's building a world where your crypto apps work together seamlessly just like your favorite web 2 apps no more wal Gardens just smooth sailing across the decentralized web all of that and only using JavaScript that's the future agoric is building the team just announced their Early Access program so please head over to agoric domcom and join today to start orchestrating the future of wealth in web 3 now what happened in news was first up Perth based digital X has

received the green light to list its bot Bitcoin ETF on the ASX that's the Australian stock exchange this makes it the second spot Bitcoin ETF available on the exchange following vanic debut in June trading is set to begin this Thursday that means Aussie investors will soon have another regulated Avenue to gain direct exposure to bitcoin without needing to directly hold their cryptocurrency although I'm sure if you're listening to the show you're holding yourself in a hardware wallet I hope because that's the way to do it also what else happened is ton we've talked about ton a bunch on today's show well ton is launching a new layer 2 Network called ton applications chain that's Tac for short this new protocol

aims to address scalability and efficiency for decentralized applications built on ton The Twist they're building it using polygon Tech specifically Tac will leverage polygon's chain development kit that's polygon cdk and their egare interoperability solution why polygon well taon sites polygon's evm compatibility strong developer community and readily available liquidity as key factors that's it for today folks thanks for listening and have a wicked awesome day thank you for listening to milk Road radio the easiest path to get smarter about crypto if you like this episode share it and hit subscribe or follow so you you don't miss out on the next one there's also a link in the description to our free 5minute daily newsletter

where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game then we'll leave a link to milk Road Pro as well your number one resource to help you invest successfully in crypto one final note this podcast is for educational purposes only and nothing we say is financial advice crypto is risky so you should never invest more than you're willing to lose thank you friends and we'll see you in the next one one