Nansen 2021 Crypto Report: Analyzing last year's highlights and trend changes through on-chain data observation!

The blockchain data analysis platform Nansen released its 2021 Blockchain Industry Report this week, covering statistics on public chains, DeFi, NFTs, and blockchain gaming. What are the highlights and trends explained in this chart-filled report? Let's take a look together!

Download the full report here.

Comparison of Public Chains

Over the past year, we have seen the rise of many Layer1 and Layer2 solutions. The phrase "everyone has a public chain" is no longer a joke but an accurate description of the current competition among public chains. While Ethereum remains the king of the current era, the high Gas Fees have provided opportunities for emerging chains. Lower fees and the implementation of incentive programs have enabled some chains to surpass Ethereum in terms of activity levels.

First, let's take a look at the outstanding performances of these public chains over the past year.

ETH

Due to Ethereum's first-mover advantage, it currently dominates in terms of Total Value Locked (TVL) and locking volume among all public chains. Uniswap, a decentralized exchange, accounted for the highest Gas consumption, consistently exceeding 30% throughout the year.

However, with the NFT craze hitting in the second half of last year, the trading volume on OpenSea continued to rise. In September and October, its Gas consumption even surpassed Uniswap, becoming the only platform to have done so.

In addition to NFTs, blockchain game Axie Infinity achieved unprecedented success in the middle of last year, sparking a wave of blockchain gaming trends. Its Gas consumption in July to September accounted for about 10% of Ethereum's share, but as the game moved to the Ronin sidechain, the proportion gradually decreased.

Polygon

The number of transactions on Polygon has been consistently more than three times that of Ethereum, but the Gas paid is only 0.5% of Ethereum's.

Binance Smart Chain (BSC)

The number of active addresses on BSC is the highest among all Layer 1 blockchains. In November last year, the daily transaction volume on BSC even exceeded Ethereum's by more than 13 times.

Note: The popularity of various blockchain games like Cryptomines and BNB Hero on BSC in November last year led to a dramatic increase in transaction volume.

Fantom

In September last year, the Fantom Foundation announced a $370 million FTM distribution plan, leading to a 4.4x increase in daily active users in a short period, with TVL steadily growing to $6 billion by November.

Avalanche

In September last year, the Avalanche Foundation launched a $180 million DeFi incentive program, resulting in a staggering $600 million in ETH-AVAX cross-chain transactions in September. This demonstrates the impact of incentive programs in the early stages of blockchain ecosystem development and the characteristics of DeFi farmers chasing high yields.

Continued Advancement of DeFi

Although DeFi's spotlight dimmed in the second half of last year due to the popularity of NFTs, GameFi, and the metaverse, its performance remains impressive from a data perspective. Over the past year, DeFi's total TVL increased by approximately 1,120%, and the total market value increased by $74 billion.

Furthermore, despite the emergence of several new public chains mentioned above, Ethereum's TVL still exceeds the total of all other chains, accounting for about 70% of the total market share.

Uniswap

Uniswap's trading activity and unique addresses peaked when V3 was launched but gradually declined with the emergence of many forks and modified versions.

AAVE

During its peak, AAVE had over 9,000 daily transactions and exceeded 4,500 active addresses in May. However, similar to Uniswap, it gradually declined in the following year.

Lido

Lido, a liquid staking protocol, continued to thrive unlike the two aforementioned protocols facing decline. At the beginning of the year, Lido's pool had only 169,000 ETH deposited, but by the end of the year, it had grown to 1.57 million ETH, a 93x increase. While Lido has 231,000 independent depositors, the top 37 holders account for 50% of all ETH, and the top 697 holders account for 80%. This phenomenon seems to indicate strong optimism among many whales for Lido's development.

Meme Data

In this report, Nansen specifically mentioned Shiba Inu (SHIB), which saw an astonishing increase of over 15 million percent in the past year. Its market value even surpassed the meme coin originator DOGE in October last year.

Among the top three SHIB earners tracked by Nansen, the first one purchased with only 0.08 ETH, held it for 271 days, and ultimately received a return of 600 ETH, yielding an impressive 7,500x return.

NFTs Taking the World by Storm

CryptoPunks and BAYC were key projects that started the NFT trend last year, with many celebrities changing their social media profile pictures to NFTs, such as Jay-Z, Reese Witherspoon, Snoop Dogg, and Stephen Curry. The trend of celebrity endorsements is now hotter than ever.

The NFT market saw two peaks in 2021, in May and late August, coincidentally driven by "side projects" of blue-chip projects. These were the new projects from the Meebits CryptoPunks team and Mutant Apes, which mutated from Bored Ape Yacht Club. The peak on August 29 saw a record-breaking 132,000 ETH in trading volume. The total NFT sales volume for the entire year of 2021 was about 4.6 million ETH, approximately $170 billion.

Play to Earn: A New Paradigm in Gaming

Aside from being used for art collections or community identities, blockchain games have provided an intriguing stage for NFTs. Axie Infinity was the standout blockchain game of 2021, generating up to $1.3 billion in annual revenue, with a peak of $17.5 million in a single day on August 6.

This growth can be attributed to Axie Infinity's migration from Ethereum to its Ronin sidechain. At its peak, the chain had over 1.1 million daily active addresses and a total market value of $9.65 billion.

Nansen's Conclusion

The crypto industry experienced tremendous growth in 2021, with DeFi bringing in capital and NFTs bringing in people. These trends are expected to continue to grow in 2022. With improved user experiences, blockchain will become more scalable, and high-quality DApps will be responsibly utilized for these improvements.

In addition, decentralized stablecoins may begin to take center stage as users steer clear of potentially regulatory scrutiny of centralized options. Once regulations come into play, many companies will follow in the footsteps of Tesla and Microstrategy, leading to increased institutional adoption.

The NFT market is flourishing due to its innovative concepts, with the best projects emerging as clear winners in the space.