Terra - 6. New Year, New LUNA?
What did the festive holidays bring?
Introduction
The yuletide, also known as the festive season, which runs from December into the new year comes with a lot of surprises for the crypto community. New users are onboarded and new wallets are created as people exchange crypto tokens as gifts, bonuses, and whatnot. The period usually does not reflect the sentiments of the broader crypto space as people are usually chilling off after a long year of ups and downs.
However, there seem to be some activities, often leading to what many traders call the Santa Clause pump. Whether Santa Clause is real or not, the creation of new wallets and trends and patterns is what is of interest. This dashboard will document significant trends of winter activity impacted on the Terra ecosystem.
The number of wallets being created every week has been slowly trending down over time. For a long time now, the number of new wallets being created is trending below the weekly average of 1,830. That is to say, the number of new wallets created in December and the new year is far below average and that has been the case in recent times. Now let’s look into transactions by wallets created since December 2022 to see if we can find any trend.
We can see that about 96.6% (5,101) of the newly created wallets in the festive season have made less than 10 transactions. A small percent (~3%) have made about 11 to 100 transaction, few (14) have made more than 100 transactions, and 3 (sure to be bots) have made over 1,000 transactions.
Transactions by newly created wallets in the festive season do not follow any specific pattern but what we can make out of this is that these wallets did not remain inactive after making their first transaction. Let’s then move forward to categorize the wallets according to the number of transactions made so far.
During the festive season, newly created wallets staked some fair amounts of LUNA on validators. An average amount of 1.285M LUNA was staked every week! Although transaction counts are in moderate numbers, the volume of LUNA staked is extremely high for a population of about 5,000. This is indicative of whale activity.
Contract deployment activity of Terra did not show much promise during the festive season, except for the first week of December where there was a peak. I assume developers were shipping off code in anticipation for the holidays.
Conclusion
The winter has definitely impacted the Terra blockchain but it is almost invisible from the birds-eye view. New wallets that were created during the festive season at some points were responsible for 30% of network-wide transactions. The most prevalent type of transaction among the population was transfers (88%) which were going back to centralized exchanges assumed to be off-ramped. Staking activities were low in count but volumes were high (weekly avg. 1.25M LUNA). New contract deployment did not show much promise during the festive season as many devs are presumed to be going on holidays.
The majority of funding (transfers) received by the newly created wallets come from a handful of wallets which I believe must be centralized exchange accounts or large organizations like Flipside or TFM disbursing funds. Centralized exchanges are one of the most preferred ways of funding accounts in crypto.
If you zoom out looking at the weekly transaction count over the past 5 months, in the charts above, what is pretty clear is the fact that the festive season just follows a general trend of a plateau. And the averages also tell the same story. However comparing old wallets to festive wallets, the picture is different.
In the normalized chart above, festive wallets, which are in brown color kept littering the festive season with intermittent peaks sometimes to as high as 31% of daily transactions which is enormous considering that they are only a fraction of the population.
Transactions on Terra can take various forms, but the most predominant ones are Transfers, Staking, Swaps, and NFT Sales. Transfers are the most popular among newly created festive wallets with 88.1%, followed by Staking (8.23%), and Swaps (3.61%). The chart below shows how transfers dominated the festive season.
As we saw in general transactions, when you zoom out it seems the festive season is just following a general trend of plateau but zooming into the transfers of newly created festive wallets, we can see peaks, as shown in the chart below, suggesting a burst in activity.
Now it’s established that festive wallets are doing more transfers than any other type of transaction but where are the transfers going to? Our basic search shows that the funds are going back to centralized exchanges since that’s the most popular way of off-ramping for crypto users.