In the last episode I compared various popular blockchain protocols with the ICON Project by analyzing their staking rewards, their real yield and their market cap. The results were quite surprising:
“While having the smallest market cap of them all ICON at the same time has the highest real yield rate with currently 6.79%. If you have a look at the charts you can definitely see an inverse correlation between the market cap and the real yield rate. You could conclude that either the average investors are not very aware of inflation in crypto or don’t consider this metric to be significant for their investment strategy.”
Total wallets / addresses
In this episode I will have a look at another important metric and check if I can identify some sort of correlation between the protocols’ number of total wallets and their market cap.
I would have preferred to only take active wallets into consideration, because this number is much harder to manipulate and in my opinion has a higher significance than the total number of wallets.
Unfortunately my analysis relies completely on the data which is provided by each of the protocols analytics platforms. They all track and display specific metrics by their own rules, so I wouldn’t have been able to guarantee that the results are 100 percent accurate and valid.
The problem I would encounter here is the term “active”, because every blockchain explorer apparently defines it differently or doesn’t even list this metric at all. Some define wallets as active if there has been at least 1 transaction in the last 30 days, others if there has been 1 transaction in the last 90 days or more.
What are blockchain wallets / adresses ?
Wallets are basically like email addresses where users can send and receive tokens. They each have their unique address (public key), which is generated via a cryptographic algorithm. In order to create a new wallet you first need to generate your own private key. After creating the private key the wallet derives the public keys from it.
The more users a decentralized network manages to onboard the more wallets are being created. If the number of wallets is high you can assume that the network usage and hence valuation of the network should be high as well.
Where does ICON currently stand in terms of number of active wallets and market cap?
In this analysis I will compare the number of total wallets on the ICON Network with other competitor chains. I will at the same time compare their market caps to see if there is a correlation between both metrics.
Market Cap
Total Wallets
As you can see Neo and Qtum are the clear winner with well over 2 million total created wallets. You could argue that those projects did have some head start being the “oldest” of the list, but you have to admit that their numbers are quite impressive. Surprisingly Cardano and Polkadot have the highest market Cap by far, but also are the ones with the least amount of generated wallets. ICON, despite having the second smallest market Cap it is well positioned in midfield with 836K total wallets.
The more I dig into those metrics the more I see that ICON can keep up easily with other blockchain protocols. It is only a matter of time until the market takes them into consideration for their investment strategy.
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