Messari Report: Analyzing Moonbeam's Q3 Performance from Four Aspects

Original Title: "Messari Releases Moonbeam Q3 Report, Analyzing Its Third Quarter Performance from Four Aspects!"

Written by: Nicholas Garcia

Translated by: PolkaWorld

Key Insights

The launch of the liquidity incentive program Moonbeam Ignite and its listing on Upbit led to a 40% increase in Moonbeam's market capitalization by the end of the third quarter.

The Moonbeam - Acala XCM channel is the most active channel for XCM communication in Polkadot, registering 9,500 messages. In addition to Polkadot, Moonbeam also maintains cross-chain interactions with several other chains.

Moonbeam released Moonbeam Routed Liquidity (MRL), allowing other parachains to access bridging liquidity from other ecosystems without needing a Moonbeam account or direct interaction with Moonbeam.

Uniswap V3 launched on Moonbeam in the last week of Q3.

Introduction to Moonbeam

Moonbeam is an EVM-compatible smart contract platform for building cross-chain applications on Polkadot. As a parachain in the Polkadot ecosystem, it leverages the security mechanisms of the Polkadot relay chain and integrates with other parachains.

Moonbeam provides an EVM implementation and a Web3-compatible API, enabling developers to deploy Solidity smart contracts and application interfaces with minimal modifications. Additionally, Moonbeam includes features such as on-chain governance, staking, and advanced cross-chain integration capabilities.

Key Metrics

Financial Overview

Market Capitalization

In the third quarter of 2023, despite favorable outcomes for XRP and Grayscale in court, the dynamics of the overall cryptocurrency market did not show significant changes, remaining relatively stable or inactive. Moonbeam also reflected this trend, until a significant 40% increase occurred in the last week. This growth was attributed to the launch of Moonbeam Ignite, a program providing liquidity incentives for protocols within the Moonbeam ecosystem. By the end of the third quarter, Moonbeam's circulating market capitalization reached $176 million, making it the 175th ranked crypto protocol.

Revenue

In the second quarter, Moonbeam's revenue experienced a surge due to the deployment of Runtime 2302 and Xen Crypto. However, in the third quarter, revenue decreased by 46% year-on-year, dropping from $160,000 to $87,000. This kept the third quarter's revenue consistent with Moonbeam's historical average.

GLMR Token

GLMR is the native token of the Moonbeam network. It serves multiple purposes, such as rewarding collectors, enabling on-chain governance, and paying network transaction fees. The token has an annual inflation rate of 5%, with no maximum supply. Of the transaction fees generated on the Moonbeam network, 80% are burned, while the remaining 20% goes to the network's treasury. The staking ratio of GLMR has been steadily increasing over several quarters, reaching 36% of its total supply staked by the end of the third quarter. In Q3, Moonbeam introduced a voting delegation feature.

Network Overview

Usage

In the first quarter of 2023, Moonbeam's address activity experienced a surge. However, in the following two quarters, this activity declined, returning to the levels observed in the same period of 2022. On the other hand, Moonbeam's transaction volume grew by 43% quarter-on-quarter. This increase in transaction volume was predictable at the end of the quarter, influenced by the announcement of Moonbeam Ignite.

According to Electric Capital's developer report, Polkadot has the second-largest developer base in cryptocurrency. Within the Polkadot ecosystem, Moonbeam has the largest developer base, with over 200 registered developers in the third quarter of 2023.

XCM

The Cross-Chain Message Format (XCM) provides a standardized messaging system for communication between parachains and other consensus-driven systems, supporting asset transfers, operations, and more. Launched on June 15, XCM V3 introduced advanced programmability, bridging with external networks, cross-chain locking, enhanced fee payments, and NFT support.

In XCM activity, Moonbeam ranks highly among parachains. The Moonbeam-Acala channel is considered the most utilized XCM channel. In the third quarter, Moonbeam launched new XCM integrations with Centrifuge, Nodle, and Origin Trail.

In the third quarter, Moonbeam launched Moonbeam Routed Liquidity (MRL). This allows parachains to access bridging liquidity from ecosystems including Ethereum, Solana, Polygon, and Avalanche without needing a Moonbeam account or direct participation. HydraDX was the first parachain to use MRL, facilitating cross-chain transfers of tokens based on Wormhole and simplifying liquidity transfers from Ethereum to HydraDX through Moonbeam. So far, Ethereum has provided $6.1 million in liquidity to HydraDX via MRL. Additionally, the parachain Interlay has also integrated Moonbeam Routed Liquidity.

Ecosystem Overview

Total Locked Value

Over the past year, Moonbeam's total locked value (TVL) in decentralized finance (DeFi) has remained relatively stable in USD terms, but the TVL measured in GLMR has continued to rise. By the end of the third quarter, Moonbeam's TVL reached $53 million, ranking it approximately 30th among various chains.

Moonwell is the largest lending protocol in Moonbeam by TVL. At the end of the third quarter, its TVL was $42 million, accounting for 79% of Moonbeam's total TVL of $53 million. Following it are StellaSwap and Prime Protocol, with TVLs of $3.8 million and $3.5 million, respectively. In the third quarter, Moonbeam's DeFi diversity score was three.

Notably, Uniswap V3 launched on Moonbeam in the last week of the third quarter!

Stablecoins

By the end of the third quarter, Moonbeam's stablecoin market capitalization was $8 million, ranking 40th on-chain. The native Frax's market capitalization was $5 million, accounting for 70% of Moonbeam's total stablecoin market capitalization. In the third quarter, Polkadot launched native USDC support, which may enhance USDC's presence in the Moonbeam development support market. It is worth noting that Moonbeam's stablecoin market capitalization sharply declined due to the Nomad vulnerability at the end of August 2022.

Conclusion

In the third quarter of 2023, Moonbeam demonstrated resilience in a volatile cryptocurrency market, with a significant increase in market capitalization in the last week of the quarter. This quarter showcased many of Moonbeam's efforts: although metrics like revenue and TVL saw quarter-on-quarter declines, indicators such as transaction and supply ratios showed growth. Despite a general decline in total XCM messages, Moonbeam still maintains its leading position in this important category.

Looking ahead, Moonbeam aims to strengthen its network activity through Moonbeam Ignite. From a broader perspective, Moonbeam remains a major parachain in the Polkadot ecosystem but also faces significant competition from external rivals.