Dispersion of coins, order book data, and traditional customer growth metrics are three useful ways to compare cryptoassets, according to three crypto industry players.
On Monday, during a panel at Messari’s Mainnet event, Kaiko CEO Ambre Soubiran, Coin Metrics Co-founder Nic Carter, and Flipside Crypto CEO Dave Balter discussed on how blockchain data and cryptoasset metrics can be useful when comparing different assets on the market.
Here’s what they said.
Tracking the dispersion of coins
When the topic of useful metrics for comparing cryptoassets was brought, Carter was first to respond with his preference for tracking the dispersion of coins on various cryptoasset networks.
“You guys might be expecting me to say realized cap here, but I would actually say something like the dispersion of addresses,” said Carter. “So, the number of addresses with certain thresholds of value in them because that’s a pretty strong, kind of, indication of the growth of the holders of that asset.”
For Carter, there is no single metric he was referring to here. Instead, an array of metrics can be used to understand the level of dispersion found in the ownership of the UTXO (unspent output from bitcoin transactions) set or account holder base.
Carter used the number of addresses holding at least BTC 0.1 on the Bitcoin network as an example data point.
“If you look at the chart on Bitcoin, it looks a little bit like the price chart, actually,” said Carter. “It has these really rapid expansion phases [followed by] slight concentration. But just, generally, the trend is growth, as the userbase gets more dispersed.”
Carter added that this sort of data can also be useful when measuring the relative success of various forks that break off from a particular cryptocurrency. For example, the holdings of bitcoin cash (BCH), bitcoin SV (BSV), and bitcoin gold (BTG) have become more concentrated since they launched, as BTC has continued to become more widely dispersed.
“You might juxtapose [coin dispersion] against transaction value or transaction count for some of those fork coins,” said Carter. “You see that they have an apparent vibrancy because there are lots and lots of transactions going on, but if you look into it a bit deeper, you see the transactions are kind of like for the insertion of arbitrary data, for tipping services, or actually just could be straight up spam transactions. And it’s not a function of actual commerce happening really.”
According to Carter, the entities transacting are mostly the same entities: “And there’s not evangelism going on. There’s no additional, new dispersion. There’s no user acquisition.”
Taking a look at liquidity
For Soubiran, it’s also useful to look at metrics around usage and velocity. With these sorts of data, you can see how money is being moved around on a cryptoasset network rather than just how much is being held by users.
“Going back to my…