How changeable are ERC-20 tokens in time? Behavioral analysis studies

cyber•Drop
May 21, 2019 · 6 min read

by Serge Nedashkovsky and Maxim Odegov

One of the key events of 2017 was the explosive growth in the popularity of ERC-20 tokens (hereinafter referred to as tokens). The growth in the volume of transactions with tokens led to the growing popularity of the Ethereum network and the cost of ETH.

In 2017 and 2018, the daily number of token transfers grew from 1K to 400K and peaked at over 1M. At the moment, the daily number of token transfers has stabilized and is more than 250K.

Figure 1. Token Transfers

Token transfers make a significant contribution to the use of gas of the network.

Figure 2. Gas Used

Classification of token transfers

It is interesting to understand what types of transfers exist and what is the distribution between them.

We have identified three main classes of transfers:

Next, we consider the metrics on the basis of which we will divide the classes. Metrics are calculated for the address pairs of the sender of the transfer — token.

Count of Token Transfers

A key indicator for the division of classes is the number of token transfers per unit of time calculated for each sender. For clarity, we have divided the transfers into 4 classes:

Figure 3. Token Transfers by daily count

As can be seen, transfers with the number of sent transactions more than 100 for one sender per day dominate. Classes with significant and not a significant number of transfers we have combined due to their small size.

The Uniqueness of Recipients of Transfers

The second most important metric characterizing the token transfer is the ratio of the number of sent transfers to the number of unique recipients for the selected sender per day. This metric shows the frequency of interaction with token recipients. We have divided transfers into the following classes:

Figure 4. Token Transfers by uniqueness of recipients

Transfers to unique recipients dominate (45%) and then there are single transfers (19%) and transfers to a limited number of unique recipients (17%). Transfers with a significant number of unique recipients we have added to the class of transfers to unique recipients.

Token Liquidity

In order to assess the activity of ERC-20 tokens, we have calculated the number of transfers made with these tokens on decentralized exchanges.

We have divided transfers into the following classes:

Among all the ERC-20 tokens with which at least one transfer was made, 12% (5433) of the tokens are traded on decentralized exchanges. At the same time, most of the transfers (in total, 65.5%) occurred with traded tokens.

A similar ratio is observed for the number of addresses that sent tokens:

Figure 5. Token and sending address count by token liquidity

However, as can be seen from the following chart, the share of token transfers not traded on decentralized exchanges increases over time:

Figure 6. Token Transfers by liquidity

Merging Metrics. Count and Uniqueness of Recipients of Transfers

Using the first two metrics: the number of transfers and the uniqueness of the recipients, we divided the token transfers into classes as follows:

Figure 7. Token Transfers by Classes

Merging Metrics. Add Liquidity

We have defined how transfers of the above classes are distributed by token liquidity into groups: non-tradable tokens, low and high liquid tokens.

Figure 8. Token Transfers by liquidity. Bounty & Promo Airdrops, Crowdsales
Figure 9. Token Transfers by liquidity. Traders & Exchanges
Figure 10. Token Transfers by liquidity. Ordinary users

We see that there is a significant amount of non-tradable tokens in Traders & Exchanges transfers. We assume that these transfers should be classified as Bounty & Promo Airdrops, Crowdsales.

Therefore, the rules for assigning to classes will look like this:

The number of transfers for the sender-token pair is 1.

Transfers with a unique recipient and a significant number of unique recipients (the ratio of the number of transfers to the number of unique recipients is less than 2). The number of transfers in this class is more than 100.

Other transfers of non-tradable tokens also belong to the class.

Other transfers of tradable tokens.

Figure 11. Token Transfers by Classes

As can be seen in fig.11 the last 6 months the number of token transfers by classes is stable and amounted to:

The use of ERC-20 by the major types of token senders is stable, despite the depreciation of the ether since August of 2018. This once again underlines the viability and convenience of the ERC-20 token.

Source: The calculations were made using Ethereum Analytical DB

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