What you’ll learn today

• Insight 1: EGLD's $651 Million Market Cap places it in the same league as tokens like ALGO and XTZ.

• Insight 2: A 67.06% staking ratio indicates a highly engaged community and strong network participation for EGLD.

• Insight 3: When comparing the supply-demand dynamics of ALGO with EGLD, ALGO has 215 times more supply (Rewards Per Year) than demand (Annualized Fee revenue), compared to EGLD's 64 times.

1. Market Overview

Market Cap

Market Cap’s Significance

This metric serves as an important indicator for evaluating the asset's relative size and significance in the broader cryptocurrency market.

Current value: $651 million

With a market capitalization of $196.42 billion, ETH's size is substantially bigger than that of EGLD. The Market Cap of EGLD comes in the range of Tokens like ALGO (Algorand), and XTZ(Tezos).

Trend: -28% in the last 90 days

Daily Volume

Daily Volume's Significance

The daily trading volume of a crypto asset indicates investor interest and market liquidity. High volume facilitates easy buying and selling, while low volume may present challenges in executing trades without affecting the asset's price.

Current value: $10 million

A daily trading volume of $10 million for EGLD suggests limited market activity.

For comparison, Ethereum reports a daily volume of $4 billion, while Algorand and Tezos have daily volumes of $20 million and $10 million, respectively.

Understanding Daily Volume and Market Cap: Implications for Your Portfolio

The market capitalization of EGLD is similar to that of tokens like Algorand (ALGO) and Tezos (XTZ).

Currently, the altcoin market is trending downward, and historically, December tends to be a challenging month for crypto tokens in a bear market. This trend is expected to continue at least until then.

2. Supply and Demand

Inflation Rate

Inflation Rate's Significance

Inflation Rate is a window into MultiversX's token supply dynamics. A high inflation rate can dilute the value of existing tokens, while a low rate might suggest scarcity, potentially driving up demand and price.

Current value: Witnessing a 5.71% Token Supply Growth

Compared to Ethereum's modest inflation rate of 0.24%, EGLD has a notably higher rate of 5.71%.

Given that EGLD is a relatively new L1 Token, the higher inflation rate is designed to decrease by 18% annually.

What This Inflation Rate Means for You

Inflation impacts the real value of EGLD holdings. Moderate inflation aids network security but can dilute token value. Without staking rewards, your share in EGLD's total supply could decrease by nearly 5.7% annually.

Annualized Fee Revenue

Annualized Fee Revenue is a measure of financial activity. A higher revenue indicates a robust protocol with plenty of transactional activity, while a lower figure might suggest reduced network usage.

Why is it important?

Current value: 0.45 Million

When comparing MultiversX's annualized fee revenue of $0.48 million with Ethereum's robust $2 billion, the gap is significant.

However, if one considers L1 platforms in the same market cap range, such as Algorand, the picture changes. MultiversX boasts nearly six times the annualized fee revenue of Algorand.

Supply/Demand (S/D) ratio

The S/D ratio measures the network's financial balance. A ratio close to 1 indicates fee revenue and reward payouts are nearly equal. A ratio below 1 implies more rewards are paid out than fees earned, potentially questioning the token's long-term value if sustained.

Current value:

▪️Annual Fee Revenue: $ 0.45 million

▪️Rewards Per Year: $29.6 million

▪️Ratio: 0.015

With a calculated R/R ratio of approximately 0.015, in other words, EGLD has 64x more supply than demand.

Comparative Analysis: Financial Equilibrium Insights

In contrast, Ethereum's S/D ratio is approximately 1.17 ($2 billion USD / $1.64 billion USD), indicating a more balanced system where the fee revenue nearly matches the reward payouts.

If you compare Algo with EGLD, ALGO has 215x more supply (Rewards Per Year) than demand compared to 64x EGLD.

Ethereum, being a more mature chain, possesses a more sustainable economic model compared to MultiversX.

Yet, when MultiversX is compared with Algorand, it appears that MultiversX has, at least for the present moment, a relatively more balanced economic equilibrium.

3. Security & Participation: Key Staking Metrics

Staking Market Cap

The staking market cap reflects the total value of staked tokens and indicates network security and participant commitment. A high staking market cap suggests a more secure and stable network.

Current value: $435.76 million

With a Staking Market Cap of $435.76 million, MultiversX exhibits a decent level of financial support.

For context, Ethereum has an impressive Staking Market Cap of $41.51 billion, while Algorand's is at $239 million.

90 Day Trend: -23.45%

The decline of 23.45% over the past 90 days in MultiversX's Staking Market Cap is primarily attributed to a drop in the price of EGLD.

Staking Ratio

Staking ratio can provide insights into the level of network participation among token holders, as well as the overall health and security of the network.

Current value: 67.06%

Compared to Ethereum's 20.51% and ALGO's 26.69%, EGLD's 67.06% staking ratio is notably high.

90-Day Trend: +2%

The 90-day trend indicates a stable to slightly increasing level of network participation, with a change of +2%.

Staking Wallets

The number of Staking Wallets is more than a count; it's an indicator of network participation and decentralization. A higher number suggests an active, engaged community, while a lower number might indicate centralized control or lesser community involvement.

Current value: 141,000 Staking Wallets 

In contrast, Ethereum boasts a much higher count of 781,320 staking wallets, and Cardano has approximately 1.3 million.

Implications for EGLD Hodlers👇

While MultiversX may not rank among the top 10 L1s by market cap, its metrics are not insignificant, especially when compared to Ethereum.

When placed alongside a similarly-sized L1 like Algorand, EGLD demonstrates superior security metrics.

🗳️ What's Next? Your Vote Counts!

4. Reward Metrics

Reward Rate

It is the current annualized average reward rate across the network. This is the rate at which stakers can earn rewards for participating in network consensus and/or governance.

Current value: 6.79%

Reward Stability

This is computed by comparing the realized reward rate over the last 365 days to the expected reward rate 365 days ago.

This metric tries to give you an indication of how reliable the expected reward rate for this asset is.

Current value: 88.21%

According to stakingrewards.com the reward stability for staking EGLD is 88.21%, but this metric may not be that very accurate as it is currently in beta.

Real Reward Rate

It is the nominal reward rate of the network adjusted for inflation. This metric can provide insights into the actual, inflation-adjusted return that stakers or delegators can expect to receive for participating in the network, and can help the stakers understand the potential long-term value of their token holdings.

Why does it matter?

Higher real reward rates generally indicate greater potential returns for stakers or delegators, while lower real reward rates may indicate lower expected returns or potentially negative real yields in some cases.

Current value: +1%

What does it mean for an EGLD staker?

A real yield can be negative when the nominal yield, or the reward rate generated from staking or delegating, is lower than the rate of inflation within the network.

In such a scenario, even though you may be earning more of the cryptocurrency through staking rewards, the purchasing power of your holdings could be declining.

This means that the real value of your assets, when adjusted for inflation, is diminishing, resulting in a negative real yield.

5. Risk Metrics

Fully Diluted Market Cap

The Fully Diluted Market Cap (FDV) indicates potential value dilution. If a lot of tokens are set to enter circulation, this could exert downward pressure on the asset's price.

Current value: $785 million

The gap between MultiversX's current market cap and its FDV is around 136 million or almost 15% of its total market cap.

What does FDV mean for an EGLD Hodler?

For an EGLD holder, the FDV offers insight into potential token dilution. A gap between the current market cap and FDV suggests future tokens entering circulation, which could exert downward price pressure.

In contrast, Ethereum's FDV is essentially the same as its market cap, indicating limited risk of token dilution, thereby causing lesser selling pressure for the Token.

Slashing

Current Status: No Slashing Conditions

Compared to some networks that impose severe slashing conditions, MultiversX offers a more lenient environment. This can be attractive for new stakers.

What No Slashing Means for Your Portfolio 

For an EGLD token holder, the absence of slashing conditions means less risk when staking.

Upcoming Unlocks

EGLD has no upcoming unlocks. This is a positive factor from a risk perspective.

6. Conclusion: Narrative vs. Metrics

🧰 Your Toolbox - to boost your token metrics research

1. Elrond Network Explorer - The official block explorer for EGLD, providing real-time data on transactions, staking, and more.

2. Stakingrewards.com - Continues to be a valuable resource for staking metrics, including EGLD's staking ratio and reward rates.

3. Messari.io - Known for its quality research, Messari offers in-depth analysis and metrics on EGLD among other assets.

4. DeFi Llama - For those interested in EGLD's DeFi ecosystem, this site provides metrics on total value locked (TVL) and more.

As we wrap up this week's "Just The Metrics," guess where I'm finalizing the newsletter?

Yep, from the passenger seat of a car (Laura is driving 😄 )

The beauty of working for yourself is that your office can be anywhere—even a four-wheeled one.

Sometimes, the best insights come from the most unexpected places.

Keep crunching those numbers and stay flexible, wherever you are! 🌍📊

Greetings from the “mobile metrics headquarters"

Laura & Sooraj

#FollowTheMetricsNotTheHype

PS: If you like our newsletter you will love our book ‘A 3-Step Assessment Framework for Layer 1 Blockchains’

It's packed with an easy-to-understand assessment framework & examples of 6 major L1s to help you make metrics-based decisions 💡🤓

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