The most important metric for measuring crypto's adoption is active users.

Here are two smart contracts on Gnosis Chain that have hit consistent user growth in recent months 👇

Protocol #1

Swarm: StakeRegistry

Chain: Gnosis

Swarm is a decentralised storage network

Users pay xBZZ tokens to store files on Swarm. Swarm nodes need to stake 10 xBZZ to earn rewards for their storage work. 

This StakeRegistry contract is used by Swarm nodes to deposit and withdraw their stake.

‌‌What's next?

The crypto storage space can be split into three categories:

  • Pay a one-time fee for “permanent” storage [Arweave]
  • Pay based on filesize and storage duration [Swarm, Filecoin, Storj]
  • Free to use but storage duration is not guaranteed. [IPFS]

Compared to other protocols in its category Swarm is really expensive. To store 1TB, it costs $97/month on Swarm, but only $4/month on Storj. For comparison, 1TB on AWS would cost $23/montharen't. Swarm is also pretty hard to use. Unlike Storj or Filecoin there arent many providers who make it easy for non-technical users to store data on Swarm. 

The increase in the number of nodes staking on the Swarm means that the network's storage supply is growing, but it doesn't mean there’s demand to fill it. The high cost and friction of use make me bearish that demand will catch up with the new supply.

Protocol #2

RealT: YAM

Chain: Gnosis

RealT is an onchain marketplace for trading fractional ownership of residential properties. It’s grown to become the largest protocol on Gnosis by TVL.

RealT token holders can sell their tokens on the site's inbuilt secondary market, on LevinSwap and on YAM. This contract manages the YAM secondary market.

‌‌What's next?

I have mixed feelings about RealT.

On one hand, I find RealT’s traction interesting because it's part of a larger meta-trend of the growth of Real World Assets (RWAs) onchain. This year alone, the TVL of RWA protocols has grown from $750M to $6B.

One of the main reasons for this shift is the decrease in DeFi yields during the current bear market. The median DeFi APY is currently 2.8%, which is lower than the 1-year US Treasury rate of 5.4%. As a result, more and more protocols are looking to RWAs such as tradfi loans, real estate and treasuries to achieve higher yields. Right now, 66% of Maker’s annualized revenue comes from tradfi loans.

On the other hand, I worry about the risk that RWA protocols create for the industry. These protocols require us to put our trust in third parties who control the “real-world” aspect of these assets.

In the case of RealT, each home is owned by a separate LLC, and the property tokens represent ownership in that LLC. When you use this marketplace: 

  • You need to trust RealT to create these LLCs as promised. 
  • You need to trust the outsourced property managers to properly maintain the houses.
  • You need to trust that the US Government won't ban RealT tomorrow and seize the properties from these LLCs. 

That's too much trust for me lol 😅

I'm not sure what the best approach is to meet the demand for RWAs while managing the associated risks. But I believe that as long as DeFi yield lags behind tradfi yield, the RWA category will keep expanding.

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Issue #016: Gnosis Chain 🟢✨