Monolith Reflects: learnings from $20 million topped up
Earlier this year, we published our reflections on hitting $7 million in cumulative card top-ups. We hit that milestone midway through Q1, and the space has evolved at a staggering pace since then. Several ecosystems have seen explosive growth, DeFi has welcomed many promising new projects, and NFTs have entered mainstream consciousness for the first time.
The dramatic changes in the space have come as interest in crypto technology hits record highs. Crypto is currently in the midst of its biggest bull run to date, however, the industry has matured in a major way since its last speculative rally in 2017. This time around, many projects offer genuine use cases, and the cycle has been characterised by increased interest in Ethereum and an NFT boom.
This year has also been a big one for us. While $7 million in top-ups felt like a significant achievement in February, we’ve now crossed $20 million. We currently receive over $1 million in card top-ups monthly (in fact, October saw us cross $2 million for the first time), proving that there is more appetite to go bankless and enjoy self-sovereign freedom on Ethereum in the real world than ever before. This report tracks our growth over what’s been a pivotal year for the cryptocurrency industry.
2021 in crypto
As crypto asset prices have risen over the course of this year, signs of mainstream adoption have never been clearer. The arguable headline event of the year in crypto has been Bitcoin’s biggest rally to date, but there has been a huge amount of activity beneath the surface.
Bitcoin’s rise has played an important role in attracting institutional interest in cryptocurrency technology. This year, the likes of Goldman Sachs and JP Morgan have begun offering Bitcoin products to clients, while the US’ first Bitcoin-related ETFs have launched on the New York Stock Exchange. Many other asset management giants are now adopting Bitcoin as client interest has grown.
Many companies operating within the industry have also seen huge growth. Coinbase went live on Nasdaq in April, hitting a $100 billion valuation on market day opening. Many other firms have raised hundreds of millions in capital, showing that investors have confidence in the growth of the sector. There have also been many major sponsorship deals for the first time. The FTX exchange took over naming rights for Miami Heat’s home court in a 19-year deal worth $135 million, while Coinbase has officially partnered with the NBA. Such developments show the legitimacy of the industry and should attract new entrants in the future.
Beyond the behemoths within the industry and larger institutional players, retail interest in crypto has also surged this year. This has led to rising prices of many assets. One of the notable developments of the bull run so far has been the growing interest in ETH. Ethereum’s EIP-1559 fee burning proposal highlighted ETH’s potential as a store of value asset, particularly among institutions. NFTs, meanwhile, have onboarded thousands of new retail users.
ETH is currently trading above $4,000 after starting the year at $750, which has also helped our card top-up value increase. ETH is the most used asset within Monolith, so rising prices often lead to higher top-ups. With our community now collectively spending $1 million monthly, we crossed $20 million in top-ups this month.
DeFi adoption
In our last report, we noted how there were around 1.5 million users interacting with DeFi protocols on Ethereum. Today, the number of users is closer to 3.7 million, showing that adoption is growing fast. We’ve seen similar growth in the number of Monolith users, and our community has grown as Ethereum’s has.
While Ethereum’s DeFi ecosystem has proven itself to be a success with huge disruptive potential, many other newer ecosystems have also emerged on other Layer 1 networks this year. These networks have succeeded in attracting new users by offering liquidity mining incentives that were popularised on Ethereum. The vast majority of them have optimised for EVM compatibility, meaning that they offer a similar experience to Ethereum with support for the same tokens. Bridges to Ethereum have also gained use on non-EVM-compatible networks. We believe that these developments highlight a shift towards cross-chain interoperability, where Ethereum will exist as the dominant Layer 1 base chain. Alongside Bitcoin, Ethereum is the world’s most decentralised blockchain, and we think that will cement its place as the most used network for years to come.
The total value locked in DeFi has also seen huge growth. There’s now over $100 billion locked in Ethereum’s DeFi ecosystem, much of it in blue chips like Aave and Compound. However, a new wave of innovative projects representing what’s been dubbed “DeFi 2.0” are also drawing huge interest. They include the likes of Olympus DAO, Alchemix Finance and Abracadabra; both Olympus and Alchemix were cited in a recent Goldman Sachs report on the emerging space.
The ongoing burst of innovation and growing adoption in DeFi gives us confidence in our vision for the future of the industry. It’s also presented us with a number of ideas for leveraging yield capture opportunities in our new product, token.com. As the industry grows, we think that DeFi will become increasingly popular and start to supersede areas of traditional finance. We intend to continue serving our community by offering a portal to the world of DeFi today.
The NFT boom
While many predicted that Bitcoin would take the crypto spotlight in 2021, its dominance over the market was overshadowed by a newer technology. NFTs exploded this year, attracting thousands of creators and collectors to the space for the first time. Few foresaw this trend, but the cultural impact NFTs have made over the last few months is undeniable.
Two of the biggest moments in NFTs so far have been Beeple’s historic $69.34 million sale at Christie’s, as well as Visa’s surprise CryptoPunk purchase. Such events have given validity to the digital art medium and shown that crypto culture is real and here to stay.
With a variety of musicians, artists, celebrities, and meme artists from Snoop Dogg to Damien Hirst adopting NFTs, the technology has crossed the chasm into the mainstream. The growth of NFTs has shown that the ecosystem is evolving, with the technology arguably proving itself as Ethereum’s first mainstream use case.
The NFT boom has helped Ethereum as the vast majority of activity happens on the network. ETH is the main asset used to buy NFTs, and huge amounts has been burned through EIP-1559 as a result of the flurry of interest. Just as importantly, though, the NFT movement has helped Ethereum establish itself as the hub of culture.
We believe that NFTs will prove to be a cornerstone of the cryptocurrency space for years to come, and we intend to embrace the technology by engaging with the space in a profound way. We’ll share more info soon.
Conclusions
In conclusion, the blockchain and cryptocurrency industry has changed in huge ways over the last few months. We think that 2021 will be remembered as the year that crypto went mainstream, attracting interest from creators, institutions and retail investors alike.
Amid the growing interest in crypto technology, Ethereum has also seen widespread adoption. The ecosystem has strengthened with the growth of DeFi and NFTs, and should see more utility as the network moves towards merging to Proof-of-Stake.
Meanwhile, our own offering has also seen exponential growth. From an increase in new users to rising card top-ups, it’s become clear that Monolith has established a dedicated user base. The next step is getting the rest of the world onboard. We have exciting plans for both Monolith and token.com, and we plan for both products to evolve alongside one another. We’ll share more details on how that will look very soon. For now, we can say that the future looks very bright. We can’t wait to continue the journey with you all.
The data for this report was accurate as at Thursday 28th October 2021.
