Decrypting Etherscan: Earning Tens of Millions a Year, the Business Behind the Blockchain Explorer
Advertising has become an important factor in Etherscan's revenue generation.Original Title: 《Etherscan: The Master of Block Explorers》
Author: Launchy
Compiled by: Shenchao TechFlow
Etherscan is a tool that helps users browse the Ethereum blockchain, more commonly known as a blockchain explorer, with 80 million visits per month. Etherscan has long been one of the most popular and widely used tools in the cryptocurrency space.
With Etherscan, users can easily analyze block transactions on the Ethereum blockchain. Through this platform, everyone can enjoy one of the core principles of blockchain technology: transparency. From detectives investigating suspicious "Rug" behavior on-chain to traders monitoring large fund flows, Etherscan provides us with the necessary tools to better understand what happens behind the scenes of the blockchain.
Etherscan has no tokens. While it operates at the core of the crypto Web3.0 ecosystem, Etherscan is considered more like a "traditional SaaS business" and not entirely a native blockchain application. It simply provides users with better tools to understand blockchain transactions.
Since its establishment in 2015, Etherscan has become the preferred blockchain explorer. By 2023, Etherscan has expanded to over 18 blockchains.
How Does Etherscan Make Money?
Like many other software companies, Etherscan generates revenue by providing services. Although Etherscan also offers some B2B products, it primarily operates as a B2C business. However, advertising has become an important factor in Etherscan's revenue generation.
At a higher level, Etherscan generates revenue from the following:
SaaS: Etherscan offers primarily B2B SaaS services, such as building blockchain explorer as a service (which they call EaaS).
API Program: Etherscan provides an API program to access its data, with prices ranging from free to $399 per month, along with undisclosed enterprise pricing.
Advertising: Etherscan has 5 types of advertisements. Details will be provided below.
On-chain Services: We found that one of Etherscan's products, BSCscan, offers delegation services, and Etherscan is developing other on-chain tools, including wallet-to-wallet messaging, token authorization revocation tools, and more.
Donations: It's simple. The platform allows users to donate to support its development and maintenance.
Let's make some revenue estimates.
Newsletter: $120,000 to $300,000 per year
If Etherscan has 1 million subscribers, the charge for each newsletter can range from $20,000 to $50,000 depending on CPM. Since the newsletter is not the "core" business, we haven't discussed open rates, so let's assume a price discount of 50%.
Etherscan can charge $10,000 to $25,000 for each newsletter (published monthly). Overall, they could generate $10,000 to $25,000 in revenue from the newsletter each month.
Website Advertising: $3.2 million to $8.64 million per year
Website advertising is divided into four types, including homepage banner ads, banner ads, header text ads, and button ads.
Honestly, this revenue heavily depends on how Etherscan decides to monetize. As illustrated in the example below, it depends on the industry, monetization methods, and the state of the industry.
Estimating advertising revenue based on website traffic is quite tricky, as it varies significantly by industry, field, and geography. For context, every 1,000 views can range from $0.10 to $50.
The super generic formula is: monthly traffic/1000 * RPM.
The RPM ranges from about $15 per 1,000 impressions to $100 in specific fields like real estate insurance. Let's assume the RPM for cryptocurrency is between $30 and $50.
Using an extremely rough estimate, I predict Etherscan's ability to monetize, along with 4 different ad placements and a higher RPM rate for cryptocurrency, will yield:
80 million page views per month. According to Playwire, 10 million page views should net at least $25,000 monthly. At this rate, Etherscan should net $200,000 per month.
8 million unique visitors per month. According to the aforementioned Quora source, 500,000 unique views in the gaming sector can net $45,000 monthly. At this rate, Etherscan should net $720,000 per month (assuming cryptocurrency has an RPM comparable to the gaming sector).
API Program, On-chain Services, and SaaS: $2.91 million to $12.55 million per year.
If we assume Etherscan can convert the following percentage of unique visitors (8 million) into buyers at the lowest price ($199/month):
0.1% → 8,000 customers paying $199/month → $1.91 million per year.
0.5% → 40,000 customers paying $199/month → $9.55 million per year.
As for Etherscan's Explorer-as-a-Service (EaaS), it is more like a one-time transaction (perhaps with some margin fees). Most of the on-chain services, token authorizations, and block scanning chats listed on the site are still in testing phases.
Therefore, we estimate this will yield annual revenue in the low seven-figure range ($1 million to $3 million).
Headcount and Expenses
According to LinkedIn, Etherscan has 29 employees. LinkedIn categorizes the top 5 "departments" as follows:
Engineering - 12 people
Business Development - 8 people
Operations - 4 people
Community and Social Services - 3 people
Information Technology - 2 people
Let's create a scenario to estimate how much Etherscan needs to spend on the above 5 departments:
Engineering: In the range of $100,000 to $200,000, Etherscan needs to pay $1.2 million to $2.4 million annually.
Business Development: In the range of $80,000 to $120,000, Etherscan needs to pay $640,000 to $960,000 annually.
Operations: In the range of $70,000 to $100,000, Etherscan needs to pay $280,000 to $400,000 annually.
Community and Social Services: In the range of $60,000 to $90,000, Etherscan needs to pay $180,000 to $270,000 annually.
Information Technology: In the range of $100,000 to $150,000, Etherscan needs to pay $200,000 to $300,000 annually.
Overall, for the above 5 departments, Etherscan needs to spend $2.5 million to $4.33 million annually.
However, an important point is that Etherscan's operational location is in Malaysia—this will significantly reduce salary expenses. A more realistic assumption is to halve the annual headcount expenditure, resulting in $1.25 million to $2.15 million annually.
As always, this figure is just an estimate of headcount expenditure. It does not include other operational costs, such as third-party vendors, office space, etc.
Profit
Our estimates yield the following results:
Etherscan's revenue: $6.23 million to $21.49 million per year.
Newsletter → $120,000 to $300,000 per year;
Website Advertising → $3.2 million to $8.64 million per year;
API Program, On-chain Services, and B2B SaaS → $2.91 million to $12.55 million per year;
Etherscan's expenses: $1.25 million to $4.33 million per year.
Our rough estimate results are:
Minimum gross profit of $1.9 million ($6.23 million - $4.33 million);
Maximum gross profit of $20.24 million ($21.49 million - $1.25 million).
What’s Next?
For Etherscan, gaining business insights is a very reasonable choice.
They have all the blockchain data and can launch products similar to Dune's dashboards or Nansen's wallet tagging. This seems to be a way for Etherscan to relatively easily expand into verticals without investing too many resources.
In fact, Etherscan not leveraging this trend indicates they are already very profitable in the areas they have conquered (raw blockchain data) and their brand (website traffic/ad revenue).
Etherscan is in a good position. They are not in the United States and have not launched any tokens. As the blockchain ecosystem matures, let's look forward to how this undisputed king of block explorers enters the market.
