Onchain #1: Tornado Cash, Blur vs OpenSea, GMX
Tornado Cash-related activity has stabilized 6 months after OFAC blacklisting; Blur might force OpenSea into defensively launching a token; GMX's metrics reach new all-time highs almost daily
Welcome to the first issue of Onchain 🎉
I spend a few hours every day on Dune, Flipside, DefiLlama and Twitter to get unique, data-driven insights into the crypto space.
Here, I want to share these insights and take you on a journey deep into the fascinating world of on-chain data.
Now, let’s get into the data…..
Tornado Cash
Tornado was hit hard last year when it was targeted by OFAC. To this day, one core contributor, Alexey Pertsev, remains in prison.
Yet, the Tornado Protocol itself is far from dead. While many seeking privacy moved to a16z-backed Aztec (“the programmable privacy layer for web3”), others continue to use Tornado Cash.
Since the beginning of 2023, weekly deposit volume has stabilized in the range of $4 million to $14 million.
While these numbers are notable given the circumstances, it is nonetheless a significant decline from the weeks before it was sanctioned.
At that time, weekly deposit volume fluctuated between $27 million and $47 million.
For six consecutive weeks after OFAC sanctioned TC, ETH withdrawals exceeded deposits into the Tornado pools.
The total ETH balance in the Tornado pools dropped 61% from 224,300 to 87,000 ETH.
Since this low in mid-September, the ETH balance has been trending upward again, and there are currently 110,000 ETH in the Tornado pools, as seen in this chart from @Marcov:
The number of unique users per week has dropped to less than 100, compared to 400-700 pre-OFAC.
Here it is worth noting that this figure only includes depositors.
Tornado is far from dead, but the OFAC sanctions undoubtedly had a serious impact on its effectiveness.
Lower usage = weaker anonymity set.
Blur vs OpenSea
In the last couple days, Blur regularly surpassed $80 million in daily volume — even after accounting for wash trading.
These are similar numbers that OpenSea had at the peak of the bull market in November 2021 (and based on which OpenSea raised a venture round with a mega valuation of $13.3 billion).
However, the sustainability of Blur's volume is somewhat unclear. At the moment, a lot of the volume and trading activity seems to be driven primarily by the prospect of future "care packages"/airdrops.
But contrary to what a few people wrote on Twitter, it's not just a handful of power users driving all that volume — Blur is actually very close to OS in terms of daily users as shown in below chart by hildobby
The threat perceived by Blur seems serious enough for OpenSea to take action — in an initial response, the company announced that it is:
partially moving away from enforced royalties
temporarily reducing platform fees to 0% for blue-chip collections and 0.5% for all other collections
“exploring ways to reward our most loyal users”
The last point seems like a subtle hint that that they might be considering launching a token.
It might also be a psyop. Hinting that one intends to launch a token (but never following up on it), has become quite common, MetaMask being the best example.
Anyways, launching a token would make sense and be the second major “defensive token launch” after Uniswap who allegedly prioritized their token launch as a result of the Sushi vampire attack.
Cobie previously talked about the idea behind launching tokens defensively in The Daily Gwei podcast with Sassal:
“… that’s interesting because lot of people were launching tokens defensively. Even Uniswap was potentially a defensive token launch because Sushi was vampire attacking them. If we don’t have one someone will clone our work and get one, and they’ll have our growth because they’ll get paid to go there instead and the product will be the same because it is open source.”
GMX
GMX, the decentralized perpetual exchange, seems to be reaching new all-time highs on all relevant metrics almost every day.
According to data from @shogun, GMX recently crossed the $500 million TVL mark for the first time on Arbitrum. Another $100 million on Avalanche isn’t even included in the below chart.
GMX also surpassed the $200 million mark in open interest on Arbitrum for the first time in early February and, after a turbulent few weeks, has now reached a new all-time high of $225 million.
However, that's still a far cry from the $8.8 billion in open interest across all derivative products on Binance.
But the trend is going in the right direction...