Free floating supply of encrypted assets in Q3 2021: FTX becomes the largest contributor to the growth of free circulation value
This report is compiled from Coin Metrics
As defined by CMBI’s Float Adjustment Methodology, the Transparency of Supply report provides visibility into the behavior of key classes of crypto asset holders that are considered to limit market supply. The current range of cryptoassets covered in this report reflects the Free Float Supply managed by Coin Metrics and includes: 0x, Aave, Balancer, Basic Attention Token, Bitcoin, Bitcoin Cash, Bitcoin Gold, Bitcoin SV, Cardano, Compound, Chainlink, Crypto.com Coin, Curve, DASH, Decred, Digibyte, Dogecoin, Ethereum, FTX Token, Huobi Token, Litecoin, MakerDAO, NEO, Stellar, Uniswap, XRP, Yearn, and Zcash.
Note that for all monthly and quarterly USD values in this article, approximate quarterly totals can be calculated by multiplying the net supply increase or decrease each day by the Coin Metrics end-of-day (00:00 UTC) reference rate for that particular day value.
Assets included in this report added a net value of $1.9 billion to the cryptocurrency market in Q3 2021, a sharp drop from the $10.5 billion added in Q2. The most important reasons for this decline are:
During the quarter, $2.1 billion in Bitcoin was removed from circulating supply due to some addresses holding Bitcoin for more than 5 years.
$2.1 billion worth of Ethereum was removed from circulating supply, primarily due to the return of tokens outflowed from the previous quarter to addresses controlled by the team.
Generally speaking, the average price of assets was lower in the third quarter relative to the second quarter, reflecting lower dollar values for the same number of assets sold.
The largest contributors to free float value growth in Q3 2021 are FTX ($1.6 billion), Cardano ($1.5 billion), XRP ($876 million) and Chainlink ($452 million).
The largest contractors by free float value in Q3 were Ethereum (-$2.1 billion), Bitcoin (-$2.1 billion) and Huobi Token (-$74 million).
Curve (969%)1, Compound (183%)1, Balancer (131%)1 and FTX Coin (60%) had the highest free-floating annual inflation rates (in native units) over the past year. During the same period, Crypto.com Coin (-24%)2, Huobi Token (-21%), and Bitcoin (1.2%) had the lowest annual inflation rates.
Note 1: Compound launched in March 2020, Balancer in July 2020, and Curve in August 2020, all of which had low initial float and liquidity mining plans, which led to their early highs inflation.
Note 2: In February and April 2021, Crypto.com conducted two one-time destructions of 59.6 billion and 5 billion CRO respectively from addresses controlled by the Foundation.
In the third quarter of this year, the net value of crypto assets transferred to addresses outside the control of identified foundations/corporations was $4.7 billion, up from $3.5 billion in the previous quarter. The two largest sources of Foundation token movement during the quarter can be attributed to:
FTX Foundation Trades $1.6 Billion From Foundation-Controlled Addresses to More Liquid Addresses
Similarly, the Cardano Foundation also traded $1.6 billion from their addresses to more liquid addresses
NOTE: Company/Foundation assets are sold for a number of reasons, including but not limited to operating expenses, team member/advisor vesting, strategic long-term partnership/BD, planned and unplanned token burns, strategic investments and fund management. Corporations/foundations may also behave differently, either opting for infrequent, large releases, or issuing as needed. Additionally, transferring assets from a foundation/corporate-controlled address does not necessarily mean that the assets have been sold (e.g. distribution to team members, destruction, strategic placement, community incentive programs, etc.).
Note: In February 2021, the Crypto.com Foundation burned $13.3 billion worth of CRO. In April, the Crypto.com Foundation burned $1.2 billion worth of CRO.
In the third quarter of 2021, the net value of encrypted assets transferred outside of the identified corporate team address decreased significantly, falling to between $650 million and $3 billion. During the third quarter, the team members who contributed the most to the change in free-floating supply of their assets were:
Ethereum: $670 million worth of Ethereum (approximately 332,000 ETH) went into closed team addresses and was therefore removed from the free float supply.
Chainlink: An additional 19.5 million LINK into a more liquid market, worth $450 million.
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0X（ZRX）
In Q3 2021, the total amount of ZRX transferred from Foundation-owned addresses was 9.5 million, a decrease of 24 million from the previous quarter. It is worth noting that in the second quarter, 21 million ZRX was deposited into the ZRX vault, so it may just be the foundation using their treasury assets to make it profitable. Since tokens in vaults earn interest, perform governance functions, and are indistinguishable from each other, they are considered active and therefore more liquid than passively held assets.
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AAVE（AAVE）
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Balancer（BAL）
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Basic Attention Token（BAT）
Throughout Q3 2021, the quarterly increase in Basic Attention Token free float was the lowest in the past year. Only 5.5 million new BATs entered circulation in Q3, down from 11.2 million in Q2 and 47.2 million in Q1. Most of the decrease came from decreased activity in foundation-controlled wallets, the most active being "BAT:UPG Reserve", which had a net inflow of only 6.4 million BAT (3.6 million BAT out, 10 million BAT from another foundation-managed address inflow).
Bitcoin (BTC)
Bitcoin (BTC)
856,000 new bitcoins were issued from mining activity in Q3 2021, which means a return to levels seen before the hash rate collapsed, resulting in slower block production times in Q2 after Chinese mining restrictions came into effect.
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Bitcoin Cash (BCH)
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Bitcoin Gold (BTG)
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Bitcoin SV (BSV)
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Cardano（ADA）
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Chainlink（LINK）
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Compound（COMP）
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Crypto.com Token（CRO）
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Curve（CRV）
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DASH（DASH）
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Decred（DCR）
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Digibyte（DGB）
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Dogecoin（DOGE）
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Ethereum (ETH)
Ethereum’s free float decreased for the first quarter ever, with a net decrease of 754,000. The main contributor to this is 1.26 million ETH, which resides in addresses that have not sent a single transaction in more than 5 years.
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FTX Token（FTT）
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Huobi Token（HT）
Huobi Token remains one of the most stable deflationary assets in the crypto market, with free float supply decreasing each quarter so far in 2020 and 2021. During the third quarter, the HT free float supply decreased by 6.1 million. This includes:
Huobi continued to burn HT on-chain, sending tokens to address 0x000…000, which received 8.8 million HT in the quarter.
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Litecoin (LTC)
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MakerDAO（MKR）
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NEO（NEO）
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Stellar（XLM）
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Uniswap（UNI）
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Ripple（XRP）
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Yearn（YFI）
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Zcash（ZEC）
The Zcash free float supply increased by 329,000 ZEC in Q3, very similar to the growth seen in the previous quarter. This low level is again the result of the ZCash block halving event that took place in November 2020.
There are no other known changes to Zcash's free-floating supply. Note that if the foundation/team utilizes shielded transactions (privacy effectiveness), the controlling asset is unknown.
This article comes from Tao of Yuan Universe, reproduced with authorization.
This article comes from Tao of Yuan Universe, reproduced with authorization.
