January 2022 New Wallets Created

    Question 20: In January 2022, we see a surge in new wallets created. Were these new wallets interacting with any assets in particular? Were there any patterns in the amount of Algos these wallets held?

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    Introduction

    Algorand is a decentralized network built to solve the blockchain trilemma of achieving speed, security, and decentralization simultaneously. Algorand uses a Proof-of-Stake (PoS) consensus mechanism, and distributes validator rewards to all holders of its native ALGO cryptocurrency.

    The Algorand protocol supports the creation of on-chain assets that benefit from the same security, compatibility, speed and ease of use as ALGO. The official name for assets on Algorand is Algorand Standard Assets (ASA).

    With ASAs you can represent stablecoins, loyalty points, system credits, and in-game points, just to name a few examples. You can also represent single, unique assets like a deed for a house, collectable items, unique parts on a supply chain, etc. There is also optional functionality to place transfer restrictions on an asset that help support securities, compliance, and certification use cases.

    Accounts and wallets

    Accounts are entities on the Algorand blockchain associated with specific onchain data, like a balance. An Algorand Address is the identifier for an Algorand account.

    After generating a private key and corresponding address, sending Algos to the address on Algorand will initialize its state on the Algorand blockchain.

    A wallet stores a collection of keys. kmd stores collections of wallets and allows users to perform operations using the keys stored within these wallets. Every wallet is associated with a master key, represented as a 25-word mnemonic, from which all accounts in that wallet are derived. This allows the owner of the wallet to only need to remember a single passphrase for all of their accounts. Wallets are stored encrypted on disk.

    Methodology

    To filter the new wallets created on January, I will identify the first and last block created in January using the algorand.blocks table and create a query on the algorand.accounttable to find out all new addresses within the Algorand Ecosystem.

    Then, I will query the algorand.account_assets table to find out the number of new addresses holding existing assets on the algorand network.

    For this bounty, I will differentiate between ALGO (Algorand Native Token) and assets (ASA, Algorand Standard Assets). I will also differentiate between addresses with an asset amount bigger than 0 and with any amount. I assume that addresses with a amount equal to zero have held ALGO or an ASA at same point in the past but currently don't hold it.

    Note that the same wallet can hold ALGO and any amount of ASA at the same time.

    Results

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    January surge

    In January, Algorand saw a massive surge in new wallets created. This Dashboard will explore how these new wallets interacted with the ecosystem and the amount of Algos held. The table below cuantifies this surge and puts it in context by showing the number of new wallets created per day since December 1st 2021.

    Between January 1st and 18th, more than 200k per day were created. This can be compared to the previous highs of 120k-130k on single days, with a baseline new wallet creation of around 10k to really understand the significant increase.

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    The total number of addresses in Algorand Ecosystem created in January is 4.12M. This includes addresses with any amount of ALGO or ASA.

    Another visualization of the top ASA by new address number. Here, the null category accounts for all assets with no name, I assume this is the case for deleted assets like Drape Coin. This glitch doesn't hinder to visualize the importance of the top 4 ASA relative to all the ASAs of newly created addresses.

    PLANET, Planetwatch's token, leads the list of addresses currently holding an ASA with almost 10% of these addresses holding PLANET. This is bigger than the rest 9 assets in the list combined.

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    Top 3 ASA in the ranking stand out from the number of addresses:

    • Opulous is a DeFi solution for music artists. The Opulous platform provides an original and unique way for new artists to finance their work, as well as helping them launch copyrighted-NFT's
    • USDT Tether, the stablecoin's token version in Algorand Network
    • USDC, the stablecoin's token version in Algorand Network

    PLANET, Planetwatch's token is also worth mentioning as it will stand out as the Top 1 ASA in the graph below.

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    New addresses with ASA amount > 0

    From the total new addresses, almost 150k addresses hold an ASA amount bigger than 0 and the top 10 ASAs by address number is shown below.

    New addreses with any amount of ASA

    From the total new addresses, almost 600k have interacted with ASA since their creation.

    Total new addresses in Algorand Ecosystem

    New addresses holding Algo

    I will consider only the addresses holding a balance of ALGO bigger than 0 to try to recognize any patterns. There is a total of 4.08M new addresses. So the first noticeable fact is that from the new accounts created in January (4.12M) more than 99% of them are still funded. This means that the new addresses keep holding

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    From the chart above we can see that the number of addresses follows the tier order meaning the addresses with the smaller amount of ALGO are the most abundant. Shrimps (0-1 ALGO) account for 98.7% of the new addresses created.

    Looking at the ALGO amount distribution, we see the reverse trend as for the number of addresses. The ones holding the bigger amount of ALGO are the ones holding more percentage of the total amount, although being less addresses. Humpbacks (>1M) and Moby Dick (> 400M) account for 95.6% of the total amount of ALGO held by new addresses.

    There is one Moby Dick address (UEGP6V3LT5PGANFG2J56Z33IMNIVVOB2Q4BP4X7LHAHUEJFFK22C42OQDE) with over 400M ALGO that makes up 37.5% of all ALGO amount in new addresses. I couldn't find any additional information either on https://algoexplorer.io, algorand.account_assets or algorand.labels tables about the origin of this address.

    Shrimps (0-1) overtake Crabs (1-10) and Octopuses (10-100) in total amount of ALGO held.

    Conclusion

    The vast majority of new addresses hold ALGO in amounts less than 1 ALGO. One sole ALGO address holds 37.5% of all ALGO held in new addresses.

    Opulous and Planet are two of the most popular ASA that new addresses interact with and maybe a driver of the surge, as well as USDT and USDC stablecoins. Worth mentioning are also Tinyman Liquidity Pools which atttract a vast amount of ASA tokens.

    Analysis done on February 16th by Kaskz