Internet Computer Ecosystem Report, Nov 2022
An installment of metrics measuring the growth of the Internet Computer ecosystem.
The Internet Computer is the first blockchain that is capable of serving web, which enables the creation of fully on-chain applications. Launched in May of 2021, the Internet Computer has seen hundreds of applications deployed across segments like DeFi, SocialFI, Gaming, NFTs, Metaverse and more, many of which are generating daily and weekly active users in the thousands. The Internet Computer ecosystem continues to grow, which is made evident by metrics measuring user and application growth.This article is part of a monthly installment to bring attention and transparency to those metrics.
Cycles Burned
The Internet Computer runs on a “reverse gas model” i.e. the developers pay for the computation and storage of their smart contracts, and not the end users. This aligns the Internet Computer with the consumer expectations of the traditional internet where the end users expect developers to pay the hosting costs of the application. On the Internet Computer, the unit used for paying the “reverse gas fee” is called a cycle. Cycles are burned through the use of computation and storage of an application and can only be minted through the burn of the ICP token. Monitoring the rate that cycles are burned (the cycle burn rate) is the truest measurement of ecosystem growth because it measures both the number of applications deployed on the Internet Computer and the usage of those applications. The cycle burn rate is also a reliable metric, in that it is costly to artificially inflate the totals, because cycles have a cost that must be paid by the app developers.
The month of November saw an incredible increase in the cycle burn rate relative to October. In November almost 15k trillion (T) cycles were burned, a month-over-month increase of 6.5k T cycles (58% increase). As the chart below shows, the network activity of the Internet Computer, measured in cycles burned, has increased over 700% in 2022.
Much of the growth in cycles burned in November is a result of increased usage of social media applications. Approximately 50% of the growth in November is attributable to subnets containing social media applications. However growth wasn’t limited to just social media applications as 16 of the 35 Internet Computer subnets saw their cycle burn rate more than double from October to November.
Daily cycle burn rates in early December suggest that December will see another month-over-month increase in cycles burn.
Ecosystem growth can be measured in two dimensions: (1) growth in the number of applications on the Internet Computer and (2) growth in the number of users of those applications.
Growth in Users
User growth is challenging to measure directly, however Internet Identity anchors can provide an approximation for user growth. Internet Identity (II) is a common way that Internet Computer application users log in to their favorite applications. An II anchor is an instance of Internet Identity tied to a specific user. Please note that a user can have multiple II anchors, so there is not a one-to-one relationship between users and II anchors.
November 2022 set the high bar for new Internet Identity anchor creations for a month in 2022 with 36k, more than 13k greater than the previous high set in September. This suggests almost a 3x growth in Internet Computer application users.
The creation of new Internet Identity anchors peaked in the middle of November and saw above-average growth throughout the second half of the month.
Concluding Remarks
November was a banner month for the Internet Computer ecosystem, with record amounts of cycle burning and Internet Identity anchor creation. Growth data supports the narrative that the Internet Computer ecosystem is growing rapidly. More recent growth has favored social media applications on the Internet Computer, however with the launches of SNS and Bitcoin Integration, other industries may begin to join in the cycle burning growth trend as well.
