The year 2023 has been quite rough for cryptocurrencies. Ever since the massive digital asset exchange FTX collapsed back in November 2022, regulators in the United States have been cracking down hard on the industry. As a result, several companies have been forced to shut down. Just recently, on June 6th and June 7th, the SEC sued both Coinbase and Binance, particularly focusing on the unregistered offer and sale of securities. This has had a devastating impact on all alt coins, causing quite a chaotic situation in the market.
The objective of this report is to compare the 3R metrics (reach, retention, revenue) between these two prominent blockchains, with a focus on the events of the 7 days after the SEC lawsuit and of course to some days before the lawsuit as well. To establish the necessary context, the report will commence with a brief introduction comparing these two blockchain giants in terms of competitive advantage from retail user perspective.
I really like that figure, and of course, the explanation as well. As a retail user, some of us might prioritize decentralization, while others value speed. Personally, when I need to send money overseas, I choose to use the Binance platform (BSC network, for instance BUSD instead of USDT eth network) because of its low transaction fees. If you want to learn more about the scalability trilemma, transaction fees and throughput, and the consensus model, this article might be helpful in comparing these two blockchain giants.
Let’s get started with the analysis. These are my research questions for this analysis:
- Since the SEC lawsuit, both ETH (the native coin of the Ethereum network) and BNB (the native coin of the BSC network) have experienced price drops. However, how have they performed in terms of 3R metrics (reach, retention, and revenue)?
- Do they exhibit similar patterns in terms of the 3R metrics, considering that BNB has been classified as a security in the SEC lawsuit, while ETH has not?
Note that in this report, the result is generated from Increment tool powered by Covalent, so if you want to change the aggregation to be like this quarter, last year, this year, it’s really easy, you can just update it using the drop down menu and see the results. The full dashboard can be accessed through this link.
Key takeaways: So what happened after the SEC lawsuit for ETH and BSC?
- We know that both blockchains suffered a loss in price. BSC has been slightly decreasing in terms of active users and transactions recently, but not significantly. Conversely, ETH has been slightly increasing, also not significantly.
- The stickiness ratio for both blockchains has been increasing, especially for BSC in the month of June. I suspect this might be because Binance US stopped deposits and withdrawals, prompting BSC users to potentially move their assets.
- The revenue (gas paid) of both blockchains has dropped, but this trend began in mid-May, not after the SEC lawsuit.
- We found some interesting facts in the last 30 days: BSC has outperformed ETH in terms of total DEX volume, whereas in terms of NFT sales volume, Ethereum is still leading.
Let’s get started from the overall reach and revenue comparison of ETH and BSC.
As I mentioned earlier, if we take speed into account, BSC is the superior option. When we examine the reach metrics, BSC surpasses Ethereum in terms of average transactions per day and average active addresses per day. That’s why BSC attracts a large number of users. However, if we turn our attention to revenue metrics, it becomes clear why Ethereum ranks second in the blockchain network, only behind Bitcoin. This becomes apparent when you consider the total USD spent on gas and the total NFT sales volume. Honestly, I was really surprised to see that BSC’s total DEX volume surpasses Ethereum’s, wow (please note that this is only based on the past 30 days!). But in terms of NFT sales, BSC is still lagging far behind. Will BSC catch up in the future? That’s a truly intriguing question.
Let check it through the visualizations!
Daily active users (DAUs), weekly active users (WAUs), and monthly active users (MAUs) are important metrics for understanding the patterns of active users on blockchains, especially when we want to compare two blockchain networks. Please note that we might not consider the month of June for MAU calculations, since today is the 15th, which is only halfway through the month. However, we can analyze the DAUs and WAUs of both ETH and BSC. Overall, they appear to be performing well. For ETH, the DAU has been increasing in June compared to previous months, while BSC shows the opposite trend. Let’s delve deeper with more visualizations!
In terms of patterns, BSC has seen a slight decrease in the number of daily transactions recently, but it hasn’t been significant. On the other hand, Ethereum has remained constant.
The figure above confirms that the number of active addresses on BSC has seen a slight decrease recently. Now, let’s look at the Ethereum blockchain.
Ethereum displays the opposite pattern, as the number of active addresses has been slightly increasing recently. This finding confirms the overall DAU chart.
Interestingly, the stickiness ratio has been increasing recently for both blockchains. I suspect that this may be due to Binance starting to halt USD deposits & withdrawals for Binance-US, which could cause many BSC users to move their assets.
Let’s see what’s going on in terms of number of transactions.
Overall, the patterns of the number of transactions mirror the patterns of active addresses.
Therefore, our conclusions for the Reach and Retention aspects in order to answer the research questions are as follows:
- Recently, BSC has experienced a slight decrease in the number of daily transactions and daily active users, but the decrease hasn’t been significant. Conversely, ETH has seen a slight increase in the number of active addresses and transactions.
- The stickiness ratio has been on the rise for both ETH and BSC. I suspect this may be a result of Binance starting to halt USD deposits & withdrawals for Binance-US, potentially prompting many BSC users to move their assets.
Let’s examine the revenue aspect!
Those figures above show that in terms of revenue (Total Gas Paid in USD, Total Gas paid per active address and total gas paid from NFT Sales), Both Ethereum and BNB Smart Chain revenue is decreasing!
The two figures above confirm the overall finding that BSC outperforms Ethereum in terms of DEX Volume, while in terms of NFT Sales Volume, Ethereum is leading.
Our summary for the revenue aspects in order to answer the research question is as follows:
- In the last 30 days, the overall revenue for both ETH and BSC has been decreasing! Not since SEC lawsuit.
- In the last 30 days, ETH’s revenue has been dominated by NFT sales volume, while BSC’s revenue has been dominated by DEX volume.
- In the last 30 days, BSC has outperformed ETH in terms of total DEX volume, whereas in terms of NFT sales volume, Ethereum is leading.
- There was unusual DEX volume on BSC around May 23–25 and May 31 — June 1, and unusual NFT sales volume on ETH on May 23. I’m not sure what caused these fluctuations.
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