Many blockchain projects, which had their ICO in 2017 have now successfully transitioned from ERC20 token to their own mainnet, where its users can freely broadcast, record and verify transactions.
Now it must be their highest duty to attract as many developers as possible to foster constant development, grow popularity and increase the adoption of their protocol.
In the last 3 years the market of infrastructure blockchain projects has grown exponentially forcing each project to innovate and find its unique niche and use case.
On-Chain Data
On chain data is becoming increasingly relevant and important for developers as well as investors to find the most attractive and popular blockchain platform.
It is crucial information that provides a way to precisely analyze network activity. It’s objective is to give beneficial insights for a better decision making process.
Number of daily transactions
A high daily transaction number is indeed one of the most reliable metrics indicating a healthy blockchain ecosystem.
In order to generate a transaction on the blockchain you need to pay fees. Those fees are usually paid in the protocols native token. This creates what economists call a “virtuous cycle,” also known as a positive feedback loop. The more development happens on your project the more users it will attract. The higher the network usage the higher the number of transactions. The more transactions are being generated the higher grows the demand of your token due to fees.
So far Ethereum is definitely the most popular smart contract platform on the market. However due to its scaling issues, which only allow about 15 transactions per second it is far from being perfect. In times of heavy usage the network can become clogged causing transactions to get stuck or delayed and fees will spike significantly.
Many development teams have since then shifted to other blockchain protocols in order to provide a more seamless user experience and avoid friction by the network.
Where does ICON currently stand in terms of daily transactions and market cap?
In this analysis I will compare the number of daily transactions on the ICON Network with the numbers of competitor chains. I will at the same time compare their market capitalisations to see if there is a correlation between both metrics.
Market Cap
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Daily Transactions
Unfortunately I could not find any clear correlation between both metrics. To my surprise they are rather inversely correlated since ICON is the one with the lowest Market Cap and at the same time generates the highest number of daily transactions.
Polkadot on the other hand has the highest Market Cap and in terms of daily transactions it is ranked second to last.
Of course there are many more important metrics and factors that have to be taken into consideration for a proper due diligence before investing into a utility token. However the outcome of this analysis comes very unexpected.
Either the metric of daily transactions is seen as very insignificant or the market evaluation of blockchain protocols is still very immature, irrational and based on pure hype and speculation.
Nonetheless my feeling is that the cryptocurrency market has matured quite a bit since its ICO craze back in 2017. We are apparently still very early, which also means that there are plenty of business and investment opportunities out there.
I am sure, as soon as the blockchain industry becomes more established, smart contract platforms with strong metrics and fundamentals like the ICON Project eventually will get their deserved recognition in this space.
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