Understanding DEFI's Expansion on Alephium

Understanding DEFI's Expansion on Alephium

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8 min read

Quick Summary: In this blog post, we will explore Alephium's growth and development. We'll look at how it has progressed from the bear market to reach important milestones. We'll focus on the ecosystem's growth after the Leman upgrade, which is crucial as we near the Rhone upgrade. We'll also review key metrics and adoption rates. By the end of this post, you'll understand Alephium's journey and its future potential.

Introduction

Out of the top 1000 cryptocurrencies, one Proof of Work coin has really stood out by coming out of the bear market impressively. It started around rank #947 but quickly moved up. This project has shown great adoption and potential. This cryptocurrency is called Alephium.

Since the last upgrade in March 2023, called Leman, the ecosystem has grown a lot, especially in the DeFi sector. But how much have we grown? Let’s look at the numbers and find out.

The Alephium Statistics

The User Base

Active Addresses: Before the upgrade, Alephium had about 60,000 daily active addresses. Since then, the number has grown significantly to over 160,000 active addresses. While some users may have multiple wallets, an increasing number of daily active addresses usually shows higher user engagement and adoption. (Sources are available by clicking the images!)

https://alph-richlist.vercel.app/pages/1?&sort=balance&order=desc

Another quick data point is the number of ETH holder addresses. It was 0 back in November, and it is now a bit over 9,000 addresses.

The Network Hashrate: The mining hashrate can indirectly show user participation. More users usually mean higher hashrates due to increased mining activity. According to data from Minerstat, the Alephium network hashrate has grown from 45 TH/s before the Leman upgrade to 1,000 TH/s now.

https://minerstat.com/coin/ALPH/network-hashrate

Social Media Activity: High engagement, discussions, and positive sentiment can indicate a growing user base. Since March 2023, Alephium's Twitter followers have increased from 7,400 to 36,800. Telegram members have grown from 2,300 to 8,200. Discord members have risen from 4,900 to 10,480.

Links to their socials available on: alephium.org/#community

Transaction Volume: The number of transactions on-chain shows the overall activity and usage on the ALPH network. This number is over 30,000 transactions daily. Although measuring blockchain transactions can be complexed and nuanced, this figure indicates usage on the user base.

https://explorer.alephium.org/

Market capitalization

Market capitalization of Alephium has also significantly increased. From being a relatively unknown cryptocurrency with a market cap of just $7 million, ALPH's market cap has now reached $150 million, with an all-time high of $273 million. This growth shows the rising confidence of investors and the broader market.

https://www.coingecko.com/en/coins/alephium

CEX Trading Volume

As the network gains adoption, CEX trading volume also increases. Before the Leman Upgrade, ALPH had a daily trading volume of $68,000. Now, it's $2,000,000.

https://www.coingecko.com/en/coins/alephium/historical_data?start=2023-03-28&end=2023-03-28

The Developer Community

While there is no accessible way to count how many developers are actually working on ALPH-related projects, we can still come up with a statistical estimate. It is common for a DApp to start with a small team of 1 to 3 developers in the early stages and then later expand to a larger team as the project grows and secures more funding. Popular DApps in the ecosystem fall around the same range.

Currently, we have over 40 active projects contributing to various parts of the ecosystem, including DApps, NFTs, memes, and tools that improve the overall functionality and usability of ALPH. We estimate there are about 80 to 120 active developers, which aligns with the 100+ participants we had in the hackathon back in February of this year.

The level of developer activity (commits, updates, new features from core developers) can also indirectly impact user adoption, as it indicates ongoing improvements. Take a look at this chart from DefiLlama.

https://defillama.com/chain/Alephium?developers=true&devsCommits=true&tvl=false&staking=false&pool2=false&govtokens=false&chainAssets=false&aggregators=false&derivatives=false&chainTokenMcap=false

For more information about Alephium projects, you can refer to our previous blog where we introduced nearly all the DApps here. Additionally, you can visit Alph.Land, where developers register their projects to gain more visibility.

The growth in the user base, transaction volume, market capitalization, CEX trading volume, and developer community can all be attributed to the Leman upgrade. We can expect even more significant growth in the coming months and years, as the Rhone Upgrade is already on the Test Net.

A quick note on price action: From its double bottom price of $0.05 to its all-time high of $3.80, it has seen a 76x increase. "The Solana of this cycle."

Understanding DEFI on ALPH

DEFI on Alephium is crucial, offering fast, cheap, transparent, and secure transactions recorded on the blockchain with smart contracts that ensure automatic execution without intermediaries, reducing costs and enabling new financial products and services.

Some of the best examples include Linx Labs' P2P swaps and P2P loans, AYIN's decentralized exchange, AlphPad's decentralized launchpad, and Donera's decentralized 'GoFundMe'.

You can explore the blockchain here: explorer.alephium.org.

And for a comprehensive overview of Alephium's technical aspects, please visit docs.alephium.org/Content.

The Importance of Core Principles in DApps

Before discussing which DApps may drive mass adoption to Alephium, it is essential to first address the core principles upon which blockchains are founded and their significance.

Here are some of the key principles that I believe are crucial:

Decentralized

Decentralization is key to blockchain technology. By spreading control across a network of nodes, decentralized systems avoid single points of failure and reduce the risk of censorship or control by one entity. This improves the application's resilience and reliability.

Trustless

A trustless system means users don't need a central authority to conduct transactions. Instead, it uses cryptographic proofs and consensus mechanisms to ensure all actions are valid and secure. This reduces fraud and manipulation, creating a safer environment.

Permissionless

In a permissionless system, anyone can participate without needing approval from a central authority. This openness encourages innovation and inclusivity, allowing developers worldwide to contribute and users to access services without barriers.

Transparency

Transparency ensures that all transactions and operations within the dApp are visible and verifiable. This openness builds trust among users and aids in auditing and accountability.

Security

Security is paramount in any dApp. Ensuring the application is free from vulnerabilities and resistant to attacks is crucial for maintaining user trust and confidence. This involves rigorous testing, code audits, network upgrades, and ongoing monitoring.

Interoperability

Interoperability lets different dApps and blockchain networks work together smoothly. This increases the utility of dApps, allowing users to use multiple services and assets across various platforms.

Scalability

As the user base grows, dApps must be able to handle increased demand without compromising performance. Scalability ensures that the application remains efficient, free from congestion, and responsive, providing a good user experience even during peak times.

Fair Launched

A fair launch means that the dApp or token is made available to the public in a way that gives everyone an equal chance to participate. This avoids unfair advantage or special treatment for insiders, promoting a more equitable distribution of resources and opportunities.

By focusing on these core principles, developers can create high-value dApps that are functional, efficient, trustworthy, and fair. These principles help build a strong and sustainable ecosystem that benefits everyone. In contrast, many low-quality DeFi dApps with poor security and difficult interfaces can scare away users and lower confidence in the platform.. Also, it is important to realize that the ecosystem's growth depends not just on the number of dApps but on the quality and value they provide to users.

Looking Ahead

By defining high-value DApps, let's discuss what leading Layer 1 platforms have that Alephium needs to adopt or get closer to.

  1. Solana's DEX Liquidity AggregatorJupiter

    A highly efficient decentralized exchange (DEX) liquidity aggregator enables users to access liquidity from multiple sources, ensuring trades are executed at the best prices with minimal slippage, and by integrating such an aggregator, ALPH can enhance its users' trading experience with higher liquidity and better trade execution, especially as having multiple on-chain DEXes fragments liquidity.

  2. Ethereum's Uniswap V3

    Uniswap has revolutionized DeFi with its Concentrated Liquidity Automated Market Maker (CLAMM) model, allowing liquidity providers to use their capital more efficiently and earn higher returns. By adopting a similar AMM model, we can tackle liquidity fragmentation. Invariant, the winner of our first hackathon, is working on this.

  3. DAOs (Decentralized Autonomous Organizations)

    DAOs are crucial for decentralized governance, allowing community members to participate in decision-making, and by developing DAOs in the ALPH ecosystem, we can enhance democratic governance, boost user engagement, and build trust. FabioB from Discord is working on a DAO toolkit and Blockflow Alliance DAO is planning to use it soon as it gets deployed.

Final Conclusion

Alephium's journey from a lesser-known cryptocurrency to a significant player in the DeFi sector is a testament to its robust technology and community engagement. The substantial growth in user base, transaction volume, and market capitalization indicates a strong and promising future.

As Alephium continues to innovate and expand its ecosystem with upcoming upgrades like Rhone, it is well-positioned to further solidify its place in the blockchain space.

By focusing on quality dApps and adhering to core principles, Alephium has the potential to become a top-tier cryptocurrency, driving mass adoption and delivering significant value to its users and developers.

Thank you for reading. If you found this content valuable, please like and share the blog on Twitter. Our goal is to expand our reach and onboard new users and developers into our ecosystem.

What do you think Alephium needs to adopt to achieve massive growth? Let us know in the comments!

Thanks for joining me. See you in the next blog! 🥂


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