Investment Analyst at @PanteraCapital
New York City
- Tweets 1,345
- Following 1,745
- Followers 3,190
- Likes 6,615
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We @PanteraCapital are excited to partner with @blockworksres on their Token Transparency Framework, alongside Theia and L1D. Its success will mark the end of crypto's information dark age.
0/ Token markets are broken & suffer from information asymmetry & hidden risks.
We're changing that.
Introducing the Token Transparency Framework, a new standard for leveling the playing field.
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Chainlink Network Financials & Valuation [1Q23 Update]
• Key Performance Indicators (KPIs)
• Chainlink Network Financials
• LINK 2.0 Discounted Cash Flow (DCF) Valuation Model
• Guide to resources (spreadsheets and Dune queries/dashboards)
Tldr; Lots of promise!
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Chainlink Node Operators have generated $189mm in revenue over the last 12 months, or ~$3.15mm in revenue per operator on average.
See new USD-denominated dashboard: dune.com/ericwallach/chainli…
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LINK Marines,
I created a Dune query that scrapes 'CCIPSend' TXs from ETH logs and calculates TX count, sum of LINK transferred, and equivalent USD transferred: dune.com/queries/2741431.
Is that the right way to think about Chainlink Network revenue from CCIP?
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Already on the CCIP Revenue dashboard ;)
@Chainlink CCIP is now live on Base
We're looking forward to seeing how developers use this to build cross-chain applications even faster and unlock new use cases 🔵
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New Dune dashboard displaying Chainlink CCIP revenue across Ethereum, Avalanche, Optimism, and Polygon: dune.com/ericwallach/chainli….
Note: I'm still working on tracking payments in alternative assets.
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Just added Arbitrum mainnet to the CCIP dashboard.
Now tracking Ethereum, Polygon, Avalanche, Optimism, and Arbitrum.
dune.com/ericwallach/chainli…
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I was recently talking to a sell-side analyst who said that "the on-chain market seems uninterested in CCIP."
But >80 DeFi projects have already integrated CCIP in <3 months!
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The Chainlink CCIP Revenue Dashboard now tracks all supported token types (LINK, WETH, WAVAX, WMATIC, and WBNB) across all supported networks (Ethereum, Avalanche, Polygon, Optimism, Arbitrum, Base, and BNB Chain).
Still a work in progress!
dune.com/ericwallach/chainli…
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New GMX V2 proposal to allocate 1.20% of protocol fees to Chainlink Network in exchange for low-latency oracle services.
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Revised cumulative CCIP revenue.
Kudos to the anon who noted cumsum needs to carry forward the last value when there's no new data – crucial for accurate plots!
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Here is Chainlink BUILD incorporated directly into my Chainlink 2.0 valuation model.
Now the model reflects LINK stakers earning yield from both (a) gross profit generated by Chainlink Network via price feeds and (b) Chainlink BUILD startup equity.
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Need some yaps. Should I start tweeting about @chainlink again?
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Previously my CCIP dashboard only showed daily and cumulative revenue in USD. As requested, I've added revenue in LINK + TX counts.
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I've seen lots of discussion on @DefiLlama's new @chainlink dashboard only showing VRF v1, VRF v2 and Automation revenue, so I put together a Dune dashboard with my Price Feed queries: dune.com/ericwallach/chainli….
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Just added Base and BNB mainnet to the CCIP dashboard. Now tracking Ethereum, Polygon, Avalanche, Optimism, Arbitrum, Base, and BNB.
dune.com/ericwallach/chainli…
I'll wait for official mainnet launches before adding Base and BNB to the combined queries up top.
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Do these (shockingly high) margins look about right for @chainlink CCIP?
I took LINK amount sent in Source TX for Destination Gas and CCIP Fee and subtracted Destination Gas in Destination TX to calculate CCIP Fee, and then I divided resultant CCIP Fee by Destination Gas and CCIP Fee.
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1/ After thorough analysis, we are voting “YES” on SIMD-228. Below is our reasoning and why we believe it is a net positive for both Solana’s growth and fundamentals.
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Exciting!
1/ The Chainlink Cross-Chain Interoperability Protocol (CCIP) has officially launched on Avalanche, Ethereum, Optimism, and Polygon mainnets.
#LinkTheWorld
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I've previously criticized Chainlink's TVE methodology, but it's directionally correct and spiking right now.
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Just fixed the CCIP Revenue Dashboard. Let me know if there are any further issues.
dune.com/ericwallach/chainli…
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Eric’s Substack: Chainlink Network Financials and Valuation ewallach.substack.com/p/chai…
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Already on the dashboard 😎
dune.com/ericwallach/chainli…
Chainlink CCIP is now live on @BNBCHAIN mainnet, enabling developers to expand their applications across chains in a simple & secure manner.
Discover the projects & protocols leveraging CCIP to connect to BNB Chain & the larger cross-chain ecosystem 🧵 ⬇️bnbchain.org/en/blog/ccip-is…
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Some LINK Marines are sharing charts of a huge spike in daily Chainlink Price Feed revenue on Polygon.
Here are the TXs in question:
0x0b51a7ec54129c5729337e7c25ab7cd25bbca4a7f930379f69201a94ca2b606d
0x5aa75a86c68c24f7673f076ac5e6ef6afedf7b7bc284cb4be58e6de5f23397fc
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Our friend @mikeahorton crushed it at the House Ag Committee, showcasing how farmers can affordably leverage @geodnet's precision positioning to reduce input costs, increase yields, and minimize environmental waste. Real tech solving real challenges for real farmers.
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This week, @rendernetwork founder @JulesUrbach was touched on the arm by @StabilityAI founder @EMostaque
Amazing meeting today with #Render fam @EMostaque and @AriEmanuel - mapping out the future of media and decentralized AI on @rendernetwork !
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Chainlink Network substantially improved earnings
• Revenue of $12.59M up 36% Q/Q.
• Gross Profit of $5.44M up 10% Q/Q.
• Operating Profits of $2.67 up 25% Q/Q.
• Net Income of $2.18M up 22% Q/Q.
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Chainlink Node Operators' have earned $289mm in revenue and $149mm in gross profit from price feeds since June 2020.
A~35% net income margin would imply $1.74mm in net income per node operator or ~$628K per node operator per year.
Good job if you can land it :)
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Last month, Chainlink network generated ~640K LINK ($4.67mm) in revenue from Price Feed TXs, which annualizes to 7.68M LINK ($56.06mm).
Adding in VRF v1, VRF v2, and Automation implies $59mm in annualized revenue. @ChainLinkGod
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New Chainlink Price Feed dashboard: dune.com/ericwallach/chainli…
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My Chainlink Node Operator financials dataset now spans back to 2019 and includes Ethereum, Polygon, BNB Chain, Avalanche, Fantom, Optimism, and Arbitrum.
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I'm publishing a comprehensive 1Q23 follow-up on Chainlink Network financials and valuation for 1Q23 either tomorrow or Friday.
If any node operators or employees at @chainlinklabs are willing to look at it in advance let me know.
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How much does Chainlink subsidize its oracle networks? In private conversations, I've heard that 70-90% of revenue is subsidized by CLL.
Here's my first (imperfect) attempt with on-chain data.
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Previously, I'd heard that Chainlink Labs subsidizes ~70-90% of Node Operator revenue on Ethereum, while a couple of sources even suggested ~90-100%.
My new estimate using on-chain data is ~95-100%.
(Please do comment if you have reason to believe otherwise.)
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In the new @Chainlink Industry Case Study:
Buyer sends 2.67 NZ$DC (~$1.60) + 5 NZ$DC (~$3.00) and seller ultimately receives 2.67 NZ$DC in exchange for 2 ANZ CarbonMultiToken (ACMT) tokens.
Who gets the 5 NZ$DC (~$3.00)? testnet.snowtrace.io/tx/0xbd…
Source: pages.chain.link/hubfs/e/anz…
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@helium revenue from data offload is going exponential, annualizing nearly $700K in only 3 months. Track it daily with our new Dune query: dune.com/queries/4121100/693….
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Re: Chainlink Price Feed revenue on Polygon
I've removed 6 erroneous transfers of LINK from Chainlink Labs to Node Operators on 11/17/2023 totaling 723K LINK ($5.35M). These funds were mistakenly sent by Chainlink Labs to Node Operators and have since been returned.
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Here's my most thorough attempt yet at measuring all-time gross profit for Chainlink NOPs on Ethereum.
I know annual data costs for a couple of NOPs, so I calculated how much they spend on average per dollar of revenue and then extrapolated that to other NOPs.
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Side note––I figured out how to track CCIP payments in LINK, WETH, WAVAX, and WMATIC across Ethereum, Optimism, Avalanche, and Polygon, but how can I also track ETH, Optimism-ETH, AVAX, and MATIC in the same query?
dune.com/queries/2745624/456…
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89.75M LINK ($566M) in outflows from Chainlink Labs wallets since July 2022.
dune.com/queries/3029075/503…
4 Chainlink Noncirculating Supply wallet addresses unlocked and transferred out 18.75 million LINK (approximately $119 million) today, of which 15.7 million were transferred to Binance, according to @EmberCN
These addresses also unlocked 21 million LINK 3 months ago, which Chainlink said will be used as subsidies, including as oracle rewards for nodes. etherscan.io/token/0x5149107…
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Some of you expressed interest in Chainlink Node Operators' LINK holdings over time, so I added another new query to the Chainlink NOP Outflows dashboard.
I'll work on accounting for LINK staked by NOPs or held in derivative assets like aLINK next.
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Awesome! I recommend everyone use @linkpoolio's new CCIP dashboard instead of my own
It's the moment that you've been waiting for: The @Chainlink @DuneAnalytics CCIP Dashboard & Spellbook.
Our objective in building @chainlink Dune Analytics Dashboards is to provide the clearest and most accurate picture of the state of @chainlink.
Today, we deliver the CCIP Dune Dashboard.
The CCIP Dashboard provides the following metrics for @ethereum, @arbitrum, @avax, @BNBCHAIN, @BuildOnBase, @Optimism, @0xPolygon:
• CCIP Totals (USD Reward, LINK Reward, Native Layer Token Reward)
• Top Used Lanes
• Node Providers
• CCIP by Network
This dashboard gives all onlookers and builders alike the most accurate and up-to-date view on the market today of @chainlink CCIP.
CCIP Dashboard: dune.com/linkpool/chainlink-…
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By combining the two new dashboards, we can see Top 20 Chainlink Node Operators by all-time gross profit.
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CCIP Question: Why does the destination TX transfer more LINK than the source TX?
Source TX on Sepolia sends ~0.11 LINK: sepolia.etherscan.io/tx/0x10…
Destination TX on Fuji sends ~0.31 LINK testnet.snowtrace.io/tx/0x67….
Here's the TX on CCIP Explorer: ccip.chain.link/msg/0x8fce8c…
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The market is flooded with tokens chasing the same narratives. Smart money will focus on businesses with standout products and strong cash flows—fundamentals remain the only way to consistently pick winners.
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Now onto LINK 2.0 Valuation
• I estimate a Discounted Cash Flow (DCF) Present Value of ~$35/LINK, which reflects the value of LINK today based on estimates of future cash flows accruing to stakers via Price Feeds and BUILD startup equity.
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New query tracking LINK held and staked by Chainlink Node Operators on Ethereum.
Tldr; NOPs have accumulated another 172K LINK in March, which is 1.89x their Ethereum revenue.
The sharp decline in Dec. '22 simply reflects deposits to the Chainlink staking contract.
Some of you expressed interest in Chainlink Node Operators' LINK holdings over time, so I added another new query to the Chainlink NOP Outflows dashboard.
I'll work on accounting for LINK staked by NOPs or held in derivative assets like aLINK next.
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BTW a couple of people asked me to add Chainlink BUILD to my Chainlink valuation model.
Here's some (very silly) back of the napkin math.
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Chainlink Network could generate an incremental $2.43mm in (unsubsidized) revenue based on GMX's $50.70mm in protocol fees over the past 3 months.
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@RenderNetwork democratizes access to high-end rendering resources. Here's a deep dive into $RNDR valuation.
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This is AWESOME.
📢 The #Chainlink @DuneAnalytics Spellbook has arrived🚝
📊 Today, we're excited to continue fulfilling the commitment of providing full transparency behind the scenes of the #Chainlink Ecosystem and announce the launch of the #Chainlink Dune Analytics Spellbook!
To see the Spellbook in action, check out this example dashboard and the underlying queries which leverage the new Dune Chainlink Spellbook: dune.com/linkpool/chainlink-…
GitHub Repo: github.com/duneanalytics/spe…
🛜 The Spellbook Rundown:
➡️ Networks supported:
• @arbitrum
• #Avalanche
• @BNBCHAIN
• #Ethereum
• #Gnosis
• #Fantom
• #Optimism
• @0xPolygon
➡️ The Spellbook adds:
• Price Feeds
• Coming soon👇
-Automation
-Verifiable Randomness (VRF)
-CCIP
➡️ This is the result of extensive development in @DuneAnalytics Spellbooks bringing alive the transparency that many have yearned to see.
It's because of this work that users can have full confidence that what they're seeing is quality information being updated in real time.
🎰 We not only look forward to community feedback for future iterations of the Chainlink Dune Analytics Dashboard, but we are especially excited to see what members of the community build from their own curiosity👊
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@MetaDAOProject First, we want to extend our gratitude to everyone who contributed to the Prop 7 discussion on Discord and/or duked it out in the order books.
We salute you.
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Shameless plug for my friend @DexTracNode and his new Chainlink analytics platform. He’s an awesome member of the community
Introducing PRISM by #DexTrac
A Data Analytics Platform for Web3 & the #Chainlink Ecosystem
PRISM reports on the status, growth, performance, & development of the Chainlink OCR Network & the node operators that secure it.
prism.dextrac.com/overview/p…
medium.com/@dextrac/introduc…
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Neither mine nor @_Synthquest's CCIP dashboards have picked up any transactions over the past 3 days. Anyone know why?
dune.com/ericwallach/chainli…
dune.com/synthquest/chainlin…
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Thinking about publishing my valuation models for Coinbase and/or Circle. Anyone interested in that?
If not, are there other crypto companies or protocols that you'd find more interesting?
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Publishing my Chainlink valuation model. This is just one of many ways to analyze $LINK, but feel free to tweak the assumptions and let me know your thoughts! docs.google.com/spreadsheets….
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In Q4, Chainlink Node Operators transmitted 49.85M Polygon Price Feed TXs, which is 25x Binance, 113x Arbitrum, 150x Fantom, 177x Avalanche, 202x Ethereum, and 322x Optimism
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I've identified the error. I'll fix it shortly.
I think we just saw our first whale transaction on CCIP, can someone find the transaction?
$LINK #Chainlink
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Crazy growth for @tensor_hq's @VECTORDOTFUN. They just doubled their previous ATH for volume.
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Love it – @TheiaResearch revised their META bid from 13% discount to 14% premium. Shows they did their homework on @MetaDAOProject and understand the value. I really believe their strategic partnership could help take MetaDAO to the next level.
metadao.fi/metadao/trade/3tA…
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My apologies – due to a small code error, I inaccurately stated that Chainlink NOPs have generated $189mm in revenue and $141mm in gross profit from Price Feeds over the last 12 months.
My best estimate is now $64mm in revenue and $31mm in gross profit.
dune.com/ericwallach/chainli…
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How many txs do Chainlink Price Feeds facilitate?
In Feb '23, the network processed ~4mm TXs excluding Solana and 178mm TXs including it. That annualizes to either 48mm or 2bn.
Another dashboard for your enjoyment: dune.com/ericwallach/chainli…
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Chainlink KPIs improved big time
• Transaction Value Secured (TVS) up 26% Q/Q to $12B.
• Lead over #2 in TVS up from 33x to 35x.
• Lead over #2 in # of Protocols Secured up from 2.6x to 3.4x.
• Price Feed TXs up 8% Q/Q despite total TXs across relevant networks down 16% Q/Q.
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For reference, Price Feed TXs have a net revenue margin of ~66% (up from ~47% in 2Q22). Meanwhile, CCIP TXs seem to have a net revenue margin of either 80% if destination chain is Ethereum or 99% if destination chain is an alt L1 (!!!).
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Odd take that @pumpdotfun shouldn’t convert their SOL revenue to USD. Don’t we want blockchains to support real businesses?
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Little of what I publish here is “final.” I open source all of my research and iterate publicly—whether it’s a Dune dashboard or a financial model—so that we can figure out the truth together. I appreciate everyone who helps (constructively) along the way.
My Chainlink Node Operator financials dataset now spans back to 2019 and includes Ethereum, Polygon, BNB Chain, Avalanche, Fantom, Optimism, and Arbitrum.
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Correction. @StabilityAI founder @EMostaque was touched on the arm by @rendernetwork founder @JulesUrbach
This week, @rendernetwork founder @JulesUrbach was touched on the arm by @StabilityAI founder @EMostaque
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BTW as someone invested in the future of @chainlink, I’d love for them to disclose info on subsidies, as well as open source their TVE calculations.
Chainlink community, is there any way to find how much of LINK rewards for price feeds are subsidized by Chainlink vs paid by external projects?
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Just added a query to the top of the dashboard that tracks combined revenue (i.e., Ethereum + Avalanche + Optimism + Polygon). Below that are charts for each chain independently.
New Dune dashboard displaying Chainlink CCIP revenue across Ethereum, Avalanche, Optimism, and Polygon: dune.com/ericwallach/chainli….
Note: I'm still working on tracking payments in alternative assets.
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Trying to wrap my head around EigenLayer. In theory, could Chainlink create a module on EigenLayer and let Ethereum validators retake ETH to secure oracles? Are there any drawbacks aside from the fact that Chainlink already has an A+ set of node operators?
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Yes—based on various assumptions with which one might reasonably disagree.
That price would place Chainlink in the top 100 companies by market cap at ~$150bn, so I encourage everyone to play around with the model.
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FYI I recommend @_dshap's report for a deep fundamental thesis on Chainlink
I present The Endgame: A Thesis on the Future of Chainlink and Web 3.0
I discuss CCIP, the ability to monetize data collected by the Chainlink Network, and speculate on the future of the space as it relates to regulation, decentralization, privacy and AI.
abstraction.capital/insights
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New dashboard tracking Chainlink Node Operators' revenue and gas costs for @GainsNetwork_io across Polygon and Arbitrum: dune.com/ericwallach/chainli….
See spreadsheet for daily gross profit numbers: bit.ly/3TYCowx.
Per request and with the help of @BlockFarms_io.
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New Dashboard: Chainlink Node Operator Outflows by Destination:
dune.com/ericwallach/chainli….
It uses Dune's address labeling engine to identify where NOPs are sending their rewards.
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Developer activity also up and to the right
• Active developers up 20% Q/Q – #1 among non-L1s and 1.67x second place (Osmosis).
• Code commits up 18% Q/Q – #1 among non-L1s and 1.42x second place (Maker).
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I've updated my Chainlink valuation model with the new data on revenue, gas costs, and tx counts.
The differences are minimal at the moment, but I expect that to change once I factor in subsidies and gas cost reimbursements in the next couple of days.
docs.google.com/spreadsheets…
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Dahlia Malkhi (Head of R&D) and her work with Mike Reiter in the late '90s also very influential!
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DCF Assumptions 1
• TAM compounds at 0.46%/year to $890T.
• DeFi TVL compounds at 50%/year to $1.01T (still <1% of TAM)
• TVS/DeFi TVL = 31%.
• TVE/TVS = DeFi GMV/TVL = 110.
• Revenue/TVE = 0.004%.
• Gross Margins increase from 43% to 63%.
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A quick thread on outflows from Chainlink Node Operator reward addresses, with the help of Nansen's address labeling engine.
Big picture, 55% of NOP reward outflows are to CEXs and DEXs, while 28% are to Lending Protocols and Liquidity Pools.
New Dashboard: Chainlink Node Operator Outflows by Destination:
dune.com/ericwallach/chainli….
It uses Dune's address labeling engine to identify where NOPs are sending their rewards.
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SEC’s Bitcoin ETF approval is available on Wayback machine: web.archive.org/web/20240110…
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The XNET-AT&T partnership demonstrates crypto creating real-world value: Millions of AT&T subscribers enjoy premium WiFi in high-traffic commercial venues across the US thanks to XNET
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In addition to the conventional subsidies covered in my last thread, NOPs are also reimbursed by @chainlink when gas costs are higher than expected.
Here's a first (imperfect) attempt at estimating these gas cost reimbursements, which I believe are ~2.40M LINK ($44M) to date.
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I’m insanely impressed by the level of data-driven discussion and analysis, as well as consensus building, on SIMD-228, in such a short period of time. Shoutout to @un_data_wiz, @0xIchigo, @__lostin__, and many, many others. No other ecosystem could pull it off.
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Polygon is demonstrating the bull case for Chainlink and its NOPs. Revenue is skyrocketing while gas costs remain flat, leading to a 157% surge in LTM gross profit.
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In fact, Price Feed TXs captured TX count share across 5/7 covered networks
• Avalanche up 1.05% to 3.00% share.
• Solana up 0.96% to 2.58% share.
• Optimism up 0.58% to 2.85% share.
• Fantom up 0.42% to 0.85% share.
• BNB Chain up 0.17% to 0.81% share.
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Despite it being against our own financial interest, we believe failing Prop 7 was ultimately the right decision. The community’s engagement strengthens our conviction in Meta-DAO, futarchy, and our long-term strategic partnership.
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Chainlink Price Feed TXs represent 19% of all TXs on the Polygon network and are maintaining share.
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Does anyone know why LINK/TX is so low for Ethereum relative to the other networks?
(Good Q from @Wahndo_)
New Dune dashboard displaying Chainlink CCIP revenue across Ethereum, Avalanche, Optimism, and Polygon: dune.com/ericwallach/chainli….
Note: I'm still working on tracking payments in alternative assets.
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New Dashboard: Chainlink Price Feed Revenue by Node Operator
dune.com/ericwallach/chainli…
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