Data & Insights Recap: "Onchain" searches peak in popularity, tips to Solana validators jump during memecoin trading

I'm on the chain trying stuff

Source: Google Trends

• Jesse Pollak, a protocols lead at Coinbase who helped pioneer their optimistic rollup Base, has been the champion of an “onchain” movement.
  • Many might remember that when Base first launched, it hosted a promotional event called “Onchain Summer,” which consisted of a lot of partnerships and exclusive NFT mints for early adopters of the layer 2. 
  • But Pollak really endorses the concept of onchain - his pinned post on X reads “onchain is the next online.” While this is not an entirely new concept for many in the crypto space, the developer seems very dedicated to this particular branding, noting in a separate post that consumer research that Coinbase conducted revealed that “onchain” outperformed other crypto terms that people throw around, like web3, blockchain, and even crypto itself. 
• Last week, Pollak even urged several crypto-focused news outlets to transition to using “onchain” more to help drive engagement.
  • And Pollak might be right. While “onchain” as a search term in Google is definitely not as popular as “web3” or “crypto,” it has been gaining significant traction. 
  • Search volume for the term “web3” peaked back in December 2021 and has only seen mild growth in recent weeks, reaching a relative popularity of 73 the week of March 3rd. (For context, Google Trends does not provide the raw number of searches made for a term over a given time period, it instead shows normalized data where each point on the graph is divided by the highest point, which is the 100 peak.)
  • Searches for “crypto” have shown more significant growth over the past two months, rising from a rating of 24 at the start of February to 53 now, but again it is still not as popular as it was in the 2021 bull market. 
  • “Onchain,” however, is the most popular it's ever been. It was hardly searched at all prior to 2021. Of course, as a less popular word to begin with, it is easier for it to gain traction relative to where it was before. But still, it does seem to suggest the onchain narrative is catching on.

Peace be wif you

Source: Dune Analytics

• While we are kind of in an “everything rally” right now, with bitcoin climbing to a new all time high twice last week and many big-name tokens climbing in the wake, memecoins have been the subject of a lot of attention.
  • The classics like DOGE and SHIB have been on a tear, and PEPE, which was the poster child of the memecoin mania that defined last spring, is also up over 100% over the past week; it has really been the Solana-based memecoins that have defined the moment. 
  • Solana memecoins have been the face of attention before, with BONK taking off at the end of last year and spiking demand for the Solana Saga phone, which came with 30 million of the token. The value of the BONK on the phones surpassed the value of the phone itself, attracting many interested buyers. 
  • A lot of these Solana memecoins got a jolt in December as the network itself had a bit of a resurgence that we’ve talked about before, emerging from the slowdown it faced in the wake of the FTX collapse. So there was a lot of momentum for these tokens to jump in on. 
  • One token that seemed to be riding the memecoin hype was dogwifhat, or WIF, which launched in November last year, right as Solana was picking up steam. And while it did see some positive movement, it was not one of the major players like BONK was. 
  • But of course, it’s a dog with a hat, so what’s not to like? Its devout fan base even put the hat that its mascot wears on the Wall Street bull at the start of February, prompting some media attention. 
  • Since then, WIF has continued to gain steam, being listed on Robinhood Europe and Binance, both of which bolstered its price and gave more traders access to the token. It’s up over 600% over the past 30 days, currently valued at $2.10. It was worth a fraction of a cent back in December. 
• While dog tokens have historically been a strong memecoin-subcategory, a new genre has also emerged recently. The “misspelled celebrity name” group of memecoins have amassed large market caps in short periods of time. Ahead of the State of the Union Address on Thursday, token Jeo Boden had a market cap of $49 million was up 12,000%. Because it's fun! 
• Solana being the host of a lot of the recent memecoin action is not that surprising since fees are much lower on the network compared to other blockchains. During the memecoin-era in May of last year, the 7-day moving average of the average transaction fee on Ethereum reached $25. While fees on Solana have been climbing, it rarely costs over $0.10 for a transaction.
  • But Solana traders still wanted to have their transactions prioritized during the trading frenzy. Jito, the largest liquid staking provider for the blockchain, saw tips to its validators hit an all-time high on March 6th, surpassing the previous peak set during the Jupiter airdrop. These tips serve as a mechanism to incentivize validators to include the transaction in question. 

No Fun Trading NFTs

Source: The Block

• The amount of DEX traders on Ethereum is at the highest level since last May as traders continue to speculate during the recent crypto rebound. However, the number of NFT traders is at the lowest level since July 2021, before the initial round of NFT hype broke out.
  • On March 6th, only 6,780 addresses bought or sold an NFT. The number had been hovering around 10,000 from July 2023 up until February, with the number starting to show a slight decline at the end of last month. 
  • NFT volumes have not been showing much of a slowdown after a bit of a rebound at the end of last year, though, both on Ethereum and other chains. Part of this could be due to the value of the underlying assets used to purchase these NFTs. An NFT worth 1 ETH a month ago is worth a lot more now in USD terms.
  • February did mark the first decline after four months of consecutive increases for monthly volume across NFT marketplaces, but it was only a 9% drop, which can partly be explained by February having 6% fewer days than January. 
  • And some positive news has come out of the NFT space. The Pudgy Penguins continue to perform well and put pressure on Bored Ape Yacht Club’s title of second most valuable NFT collection. And last week, we saw the second most expensive CryptoPunk sale ever, an alien punk worth over $16 million. 
  • But it seems as though the NFT circle has gotten smaller. Higher volumes do not always imply more users, as current NFT owners can trade amongst themselves without new people buying in.
• It is likely that over the past few days some traders have been more involved in activities on DEXs due to the surge in many cryptocurrency valuations, which could’ve played a role in the recent drawback on the NFT side of things.
  • But a lot of the market fervor we have been seeing does not seem to have made it over to NFTs quite yet. Even Ordinals, which helped usher in an NFT renaissance at the end of last year by bringing non-fungibility to the Bitcoin network, have not managed to see volume levels reached in December.
  • That being said, maybe the NFT hype is just getting started. Global investment manager VanEck, one of the firms that had a spot bitcoin ETF hit the market in January, is said to be launching an NFT marketplace this month. And music festival Coachella seems to be taking another stab at NFTs with a Keepsake collection offering exclusive experiences in partnership with OpenSea. (Coachella previously attempted an NFT collection with FTX US, which caused some issues in the wake of the exchange’s bankruptcy.) 

Sugar we're going up swinging

Source: The Block

• History was made last week when bitcoin climbed to a new all time high last week…for all of about 5 seconds.
  • After bitcoin breached $69,000 on Tuesday, it fell all the way down to around $60,800 the same day, erasing multi-day gains over the course of a few hours.
  • This was not so unexpected, as a sell-the-news phenomenon similar to what happened after spot bitcoin ETF approval swept the market. If bitcoin was at a new high, then everyone who had bought bitcoin before was in profit, so naturally some people took it. 
  • Something similar happened on Friday, although not as drastic when bitcoin crossed $69,400 and then sank as low as $68,300. 
  • But even before these wild intraday swings, bitcoin was posting sizable gains on day to day. From February 26th to February 29th bitcoin climbed around 23%, and it similarly rose around 11% from March 3rd to March 5th. 
  • Bitcoin has now found its footing above the $69,000 mark and has coasted up to $72,000 as of this morning. 
• This quick run-up for the largest digital asset has seen its 30-day annualized volatility jump to 58.15%, the highest it has been since April 2023. It’s an almost 30% rise compared to the 30.74% 30-day volatility the asset had on February 25th.
  • Once bitcoin hit the $50,000 milestone in mid-February, it did trade pretty flat until the end of the month, which explains how volatility dropped so low ahead of the meteoric rise we’ve seen. 
  • As a reminder, the 30-day volatility is defined as the standard deviation of the last 30 days daily percentage change in bitcoin’s price, and then to annualize that value you multiply it by the square root of 365 since bitcoin trades year-round. 
  • Unsurprisingly, spot volumes are also up, with the 7-day moving average of volumes across centralized exchanges reaching $100 billion last week, the highest since November 2021. The two often go hand in hand, as more volatility means more room for traders to make a quick profit which entices more trading, but a more active trading market is what causes the price to move so quickly in the first place. 

Number go up

Source: The Block

• Futures open interest for bitcoin across crypto derivatives exchanges climbed to a new all time high this week on the heels of bitcoin trading in line with its previous peak value again. The previous high was set back in April 2021, another period when bitcoin was trading over $60,000. 
  • If you compare the open interest chart to the bitcoin price chart, they are largely similar, which makes sense given that most futures contracts are denominated in the base asset. For instance, the BTCUSDT perpetual on OKX has a size of 0.01 BTC. Its current open interest is 2.69 million contracts, which is equivalent to 26,900 BTC. The USD value of those 26,900 BTC fluctuates as bitcoin’s price fluctuates, without any change to the actual amount of outstanding contracts. 
  • But we can somewhat isolate the impact of bitcoin’s price by looking at open interest in terms of BTC, essentially dividing the USD open interest by the value of bitcoin on the given day. 
• The story is completely different when we look at BTC- denominated open interest. OI actually peaked back in October 2022 at around 750,000 BTC when it was priced lower than $20,000.
  • This was right ahead of the FTX bankruptcy and around the time when things started to seem amiss at the exchange, so it’s likely many traders took short positions around this time. Contracts were also cheaper compared to the bull market of 2021, which could have allowed people to load up on more in BTC terms. 
  • But since October 2022, the OI in terms of bitcoin has been dropping, as bitcoin seemed to have hit a low in valuation just a few months later to start a strong rebound through 2023. 
  • There was a brief OI jump last week to roughly 393,000 BTC, although it shrunk to below 350,000 BTC the next day, which is more in line with the level open interest has been trending at for the past three months.
  • More recently, open interest has just held steady as opposed to a sharp decline as we saw from the October peak into March of last year. 
  • But open interest being relatively low in terms of BTC doesn’t mean there isn’t a lot of interest in trading futures. As we just talked about, periods of high volatility tend to spur more trading. And March volumes for bitcoin futures are already over half of what they were in February, indicating there are plenty of contracts exchanging hands.