The Crypto Metrics That Matter, According to Arbitrum and THORChain Builders

Over the next several weeks, Coinage is coming to a consensus on which Web3 endeavor shall be crowned Crypto Project of the Year — and it’s truly up to you. Vote to crown the winner from 16 crypto hopefuls!

In DeFi, there are a lot of gameable metrics when it comes to judging growth on-chain.

Total value locked on a network, or TVL, could show signs of a network’s growing adoption if it’s also paired with a similar boost in users. But value ported over to a blockchain — by itself — might not be as important, according to the builders behind two of 2023’s top crypto projects.

“On one side, I think looking at all the metrics is important,” Harry Kalodner, co-founder of the Arbitrum incubator Offchain Labs told Coinage. “If you focus too much on any one metric, you're gonna optimize all wrong. Although, I would say if I had to pick one … volume kind of fundamentally shows the real activity on your chain, the real value it's providing.”

Arbitrum, the Ethereum-scaling solution that was nominated by Coinage’s community as a contender in our Crypto Project of the Year, has recently seen its volume rebound to the highest level since April, according to DefiLlama. On a daily basis, it’s recently been second only to Ethereum itself.

“Volume kind of fundamentally shows the real activity on your chain, the real value it's providing,” Kalodner said, conceding that volume also technically remains a metric that could also be influenced by wash trading.   

Chad Barraford, the tech lead at decentralized swapping protocol THORChain, which was also nominated as a Project of the Year, generally agreed.

“Wash trading in general is a thing … because you can just make up fake volume,” he said. “But on a [decentralized exchange] it’s a lot harder to accomplish because it requires a lot of fees and all this kind of stuff.” But tallying up those network fees, paid by real users, could be the best metric for any blockchain, according to Barraford.

“We've gone from $10 or $20 million in trade volume in a day to now we're doing $200 to $400 million in one day,” he said. “The number of unique swappers [wallet addresses] are well over 100,000, I believe, and constantly increasing. Income or expenses on the chain itself is also [at] an all-time high.”

RUNE, the native token that powers THORChain, has appreciated 300% in 2023. Arbitrum’s token has mostly traded sideways since launching in March. Optimistically, however, Kalodner thinks Arbitrum is positioned to continue growing users who may have hopped in for the March token drop.

“One of the things that was kind of amazing watching Arbitrum was usage maintained and went up after the airdrop,” he said. “There actually was real sticky usage that was not just [airdrop] farming. So I think from that perspective … I'm feeling pretty good.” 

Arbitrum advanced past Algorand in Round 1 voting among our community of NFT holders, while THORChain topped Ethereum Attestation Service.

Which project deserves to progress in Coinage’s Crypto Project of the Year? Coinage Membership Pass holders can watch the full video above and vote on which projects advance in our celebration of crypto’s top projects. Don’t have a Membership Pass? Mint one now!