venezuela01
commented
1 year ago Attaching raw data for anyone to independently verify the analysis and conclusion.
Open venezuela01 opened 1 year ago
venezuela01
commented
1 year ago Attaching raw data for anyone to independently verify the analysis and conclusion.
venezuela01
commented
1 year ago It's also worth taking a look at the distribution of wOxen token holders, which is transparent on-chain.
As of September 7th, 2023, there are 2.8 million wOxen held by 301 wallets.
Among these tokens, a significant portion is held by 3 outlier accounts resembling asset pools, namely:
Loki Network: DeployerUniswap V2: wOXEN-USDTUniswap V2: wOXEN.On the other end of the spectrum, there are over a hundred wallets holding less than 1 wOxen, which appear to be abandoned wallets.
If we filter out outliers on both ends, we have a list of 192 holders holding a total of approximately 0.95 million wOxen.
Among these 192 holders, 10 hold more than 15,000 wOxen, and 182 hold less than 15,000 wOxen, aligning well with our assumption in 1.3 Lower Bound 2 - Assuming No One Holds More Than 15,000 Oxen Unless an Operator or Contributor.
Furthermore, 39 holders possess more than 3,750 wOxen, while 153 hold less than 3,750 wOxen. This suggests that our assumption of 1.4 Lower Bound 3 - Assuming No One Holds More Than 3,750 Oxen Unless an Operator or Contributor might be slightly too optimistic.
In other words, it is confirmed that the vast majority of unstaked wOxen holders have holdings of less than 15,000 wOxen. If we assume every 1 million unstaked wOxen is distributed among approximately 200 holders, and generalize our observation of the wOxen distribution to native Oxen, applying the same distribution to unstaked native Oxen, then the estimated 30 million unstaked Oxen derived in 1.2 Unstaked Oxen by non-OPTF Members would likely be held by around 6,000 holders. This falls well within the range between 1.3 Lower Bound 2 - 2,200 holders and 1.4 Lower Bound 3 - 8,800 holders.
In conclusion, by observing the on-chain holder distribution of wOxen as a sampling window, we have cross-validated our previous theoretical estimation and confirmed its realism.
As a side note, it's apparent that even when staking opportunities are unavailable, Oxen holders still prefer to hold Oxen as the native privacy coin using the Oxen wallet, rather than converting them to a transparent token and holding wOxen in an EVM wallet with hardware wallet support. This is evident from the numbers, with more than 30 million unstaked native Oxen held by Oxen privacy wallets, while only about 1 million unstaked wOxen are held by EVM transparent wallets. It’s important not to overestimate the importance of hardware wallets when making the decision of migrating Oxen to SENT. (Edit: This comparison may be unfair because users holding native Oxen are more likely to participate in the next staking opportunity than users holding wOxen in an EVM wallet, making it challenging to draw definitive conclusions from our observations.)
venezuela01
commented
1 year ago Raw data fetched from wOxen holders after removing 3 outliers from the high end and 100+ outliers from the low end:
| Ranking | Balance | Ranking | Balance | Ranking | Balance | Ranking | Balance |
|---|---|---|---|---|---|---|---|
| 1 | 381776.3752 | 51 | 1656.331396 | 101 | 215.5056563 | 151 | 35 |
| 2 | 107954.946 | 52 | 1653.605668 | 102 | 215 | 152 | 34.54807208 |
| 3 | 30051.05857 | 53 | 1546.11454 | 103 | 200 | 153 | 33.12820281 |
| 4 | 25385.53273 | 54 | 1448.375286 | 104 | 197.6904566 | 154 | 32.65779837 |
| 5 | 21937.83486 | 55 | 1415.416053 | 105 | 196.6156265 | 155 | 32.27590883 |
| 6 | 21588.71208 | 56 | 1386.483266 | 106 | 194.3846662 | 156 | 29.43591775 |
| 7 | 19490.14642 | 57 | 1252.823422 | 107 | 192.0844422 | 157 | 29.4333859 |
| 8 | 16504.44979 | 58 | 1235.627943 | 108 | 190.5081425 | 158 | 27.48089369 |
| 9 | 15064.72732 | 59 | 1128.209116 | 109 | 185.433 | 159 | 24.47659559 |
| 10 | 15050 | 60 | 1055.357185 | 110 | 180.4359368 | 160 | 23.169526 |
| 11 | 14452.63263 | 61 | 1000.000006 | 111 | 179.2861381 | 161 | 21.95982721 |
| 12 | 14389.50357 | 62 | 1000 | 112 | 179.2744709 | 162 | 20 |
| 13 | 12682 | 63 | 995 | 113 | 153.8000677 | 163 | 17.66707204 |
| 14 | 12573.31501 | 64 | 963.7465084 | 114 | 151.6926143 | 164 | 13 |
| 15 | 11620.90156 | 65 | 916.9136756 | 115 | 140.1034394 | 165 | 12 |
| 16 | 10591.68081 | 66 | 902.5960605 | 116 | 132 | 166 | 10 |
| 17 | 10418.63274 | 67 | 882.0856045 | 117 | 125.6474222 | 167 | 9 |
| 18 | 9900.000009 | 68 | 882.0212215 | 118 | 121.7816205 | 168 | 9 |
| 19 | 9589.780605 | 69 | 858.2872536 | 119 | 114.1247313 | 169 | 7.447913767 |
| 20 | 9203.732726 | 70 | 857.5548745 | 120 | 109.0623465 | 170 | 5 |
| 21 | 8858.028349 | 71 | 785.4716209 | 121 | 108.1007847 | 171 | 5 |
| 22 | 8842.760568 | 72 | 734.0623259 | 122 | 107.6499295 | 172 | 5 |
| 23 | 8045.618551 | 73 | 729.9218131 | 123 | 100 | 173 | 4.174678908 |
| 24 | 7061.029696 | 74 | 729.8540035 | 124 | 100 | 174 | 4 |
| 25 | 6891.783315 | 75 | 709.983885 | 125 | 99.7276921 | 175 | 3.298695642 |
| 26 | 6670.463135 | 76 | 620.8521482 | 126 | 98.11732872 | 176 | 2.563161481 |
| 27 | 6508.595201 | 77 | 604.7996508 | 127 | 94.96947808 | 177 | 2.123032469 |
| 28 | 6000.739496 | 78 | 597.136766 | 128 | 93 | 178 | 2.018522362 |
| 29 | 5551.125192 | 79 | 511.4765733 | 129 | 91.13626558 | 179 | 1.883654603 |
| 30 | 5545.993343 | 80 | 507.0685155 | 130 | 90.33912166 | 180 | 1.499213436 |
| 31 | 5425.560033 | 81 | 421.9721326 | 131 | 90 | 181 | 1.336791495 |
| 32 | 5311.522457 | 82 | 409.3158184 | 132 | 86.83691201 | 182 | 1.261732426 |
| 33 | 5175.975357 | 83 | 390.4263231 | 133 | 86 | 183 | 1.26131322 |
| 34 | 5112.074712 | 84 | 374.8158828 | 134 | 80.8414797 | 184 | 1.087284675 |
| 35 | 5000.000001 | 85 | 369.6531649 | 135 | 72 | 185 | 1.063729682 |
| 36 | 4933.511432 | 86 | 347.3533888 | 136 | 69.11742694 | 186 | 1.034490622 |
| 37 | 4511.639282 | 87 | 344.8480174 | 137 | 66.90254894 | 187 | 1.00732718 |
| 38 | 4075 | 88 | 339.517342 | 138 | 65.94449252 | 188 | 1.00040898 |
| 39 | 3864.55081 | 89 | 332.4729518 | 139 | 59.95444399 | 189 | 1.000129012 |
| 40 | 3707.466686 | 90 | 327.3200235 | 140 | 59.91767967 | 190 | 1.00010859 |
| 41 | 3631.139157 | 91 | 318.10437 | 141 | 58.46424569 | 191 | 1.0000044 |
| 42 | 2707.424673 | 92 | 300.0250324 | 142 | 54.44072631 | 192 | 1 |
| 43 | 2272.727 | 93 | 277.8428284 | 143 | 51.00660094 | ||
| 44 | 2264.268491 | 94 | 272.3945188 | 144 | 50.00000013 | ||
| 45 | 2037.058127 | 95 | 261.2110888 | 145 | 50 | ||
| 46 | 2009.664651 | 96 | 250.0000005 | 146 | 46.90810768 | ||
| 47 | 1996.771651 | 97 | 244.8 | 147 | 44.53435776 | ||
| 48 | 1823.851878 | 98 | 241.683958 | 148 | 40.77097762 | ||
| 49 | 1807.016649 | 99 | 219.3159625 | 149 | 38.30906445 | ||
| 50 | 1800.000003 | 100 | 217.3057716 | 150 | 37.3344698 |
Paul1804
commented
1 year ago It's also worth taking a look at the distribution of wOxen token holders, which is transparent on-chain.
As of September 7th, 2023, there are 2.8 million wOxen held by 301 wallets.
Among these tokens, a significant portion is held by 3 outlier accounts resembling asset pools, namely:
- 1.6 million by
Loki Network: Deployer- 223k by
Uniswap V2: wOXEN-USDT- and 74k by
Uniswap V2: wOXEN.On the other end of the spectrum, there are over a hundred wallets holding less than 1 wOxen, which appear to be abandoned wallets.
If we filter out outliers on both ends, we have a list of 192 holders holding a total of approximately 0.95 million wOxen.
Among these 192 holders, 10 hold more than 15,000 wOxen, and 182 hold less than 15,000 wOxen, aligning well with our assumption in
1.3 Lower Bound 2 - Assuming No One Holds More Than 15,000 Oxen Unless an Operator or Contributor.Furthermore, 39 holders possess more than 3,750 wOxen, while 153 hold less than 3,750 wOxen.
In other words, it is confirmed that the vast majority of unstaked wOxen holders have holdings of less than 15,000 wOxen. If we assume every 1 million unstaked wOxen is distributed among approximately 200 holders, and generalize our observation of the wOxen distribution to native Oxen, applying the same distribution to unstaked native Oxen, then the estimated 30 million unstaked Oxen derived in
1.2 Unstaked Oxen by non-OPTF Memberswould likely be held by around 6,000 holders. This falls well within the range between1.3 Lower Bound 2 - 2,200 holdersand1.4 Lower Bound 3 - 8,800 holders.In conclusion, by observing the on-chain holder distribution of wOxen as a sampling window, we have cross-validated our previous theoretical estimation and confirmed its realism.
As a side note, it's apparent that even when staking opportunities are unavailable, Oxen holders still prefer to hold Oxen as the native privacy coin using the Oxen wallet, rather than converting them to a transparent token and holding wOxen in an EVM wallet with hardware wallet support. This is evident from the numbers, with more than 30 million unstaked native Oxen held by Oxen privacy wallets, while only about 1 million unstaked wOxen are held by EVM transparent wallets. It’s important not to overestimate the importance of hardware wallets when making the decision of migrating Oxen to SENT. (Edit: This comparison may be unfair because users holding native Oxen are more likely to participate in the next staking opportunity than users holding wOxen in an EVM wallet, making it challenging to draw definitive conclusions from our observations.)
I don't use hardware wallets because I don't trust them. (A vote on this would be good. As an option - among service nodes operators.
Theoretical Analysis of Oxen Wallet Counts vs. Top Ethereum ERC20 Token Wallet Counts and an Alternative Approach to Increasing Oxen Holders
ORC-8 identifies the issue with Oxen's specialized and unfamiliar wallets for investors, suggesting a transition from the Oxen privacy chain to an EVM-compatible token. The transition would enable swapping on Uniswap, holding in MetaMask, and staking from a website.
This research aims to compare wallet counts between the Oxen chain and various Ethereum ERC20 tokens. The analysis will uncover potential limitations in the current system, establish realistic expectations for potential advantages and limitations in migrating from the Oxen to the EVM chain, and suggest a few alternative solutions.
Definition
Since cryptocurrency allows users to create multiple wallets, in this analysis, the terms
holdersandwalletsare used interchangeably to denote the number of wallets, without addressing the duplication of biological users.1. Estimation of Oxen Wallet Counts
1.1 Lower Bound 1 - Direct Observation of Oxen Block Explorer
The Oxen block explorer reports around 800 Oxen wallets engaged in operating or contributing to a node, forming the lowest estimate for the Oxen wallet count.
1.2 Unstaked Oxen by non-OPTF Members
According to the Oxen block explorer, 41% of Oxen are in service nodes, leaving approximately 59% unstaked. OPTF currently stakes 10% of the nodes or 2,565,000 Oxen in the network. Without public data on unstaked Oxen by OPTF, an estimation can be made:
According to Oxen token economics documentation:
1,188 Oxen.This totals
2,508 Oxendaily, or2,508 * 365 * 5 = 4,577,100 Oxenover five years.With 64M total Oxen and 26M staked, there are
64M - 26M - 4.6M = 33.4Mremaining unstaked Oxen by non-OPTF members.The division of these 33 million Oxen amongst wallets will provide a more precise lower bound estimation.
1.3 Lower Bound 2 - Assuming No One Holds More Than 15,000 Oxen Unless an Operator or Contributor
If an Oxen holder can't find enough slots for staking in a shared node, they may run their node, requiring 15,000 Oxen. Otherwise, they likely own less than 15,000 Oxen, considering that Oxen's inflation may limit the motivation to hold large amounts without staking opportunities. Consequently, 33 million unstaked Oxen would be held by at least
33M / 15k = 2,200different wallets.Combined with 800 known staking wallets, this makes
3,000wallets, providing a more optimistic lower bound estimation compared to Lower Bound 1.1.4 Lower Bound 3 - Assuming No One Holds More Than 3,750 Oxen Unless an Operator or Contributor
With a minimum of 3,750 Oxen for running a shared node, and assuming invisible holders must own less, the 33 million unstaked Oxen would be held by at least
33M / 3750 = 8,800wallets.Together with the 800 staking wallets, this results in
9,600total wallets, an even more optimistic lower bound than Lower Bound 2.1.5 Upper Bound - Assuming Maximum Diversity of Stakers Under Current Staking Rule
The current rule requires 15,000 Oxen per node with up to 10 participants. This allows for a potential maximum of
64M / 15k * 10 = 43kstakers if all Oxen are staked, with each node staked by 10 unique holders.This upper bound reflects a scenario without a change in the staking rule. Further considerations might form different upper bound but are not explored here.
2. Estimation of Top Ethereum ERC20 Token Wallet Counts
According to the Ethereum block explorer, over 750k ERC20 tokens exist, with more than 1k new tokens issued in the last 24 hours, indicating intense competition among ERC20 tokens.
Among the multitude of ERC20 tokens, etherscan handpicked the top 1000+ tokens based on several criteria:
We examined statistics of these top 1000 ERC20 tokens, calculated the 10th, 20th, ..., 90th percentile of wallet counts, and plotted a scatter chart of their market cap and on-chain wallet counts.
Our study reveals that among the top 1000 ERC20 tokens, the median wallet holder count is around 5.7k, not a very large number. 90% of ERC20 tokens in this list have fewer than 46k holders, a figure close to the theoretical upper bound of 43k holders estimated in 1.5 - assuming maximum diversity of stakers under the current staking rule.
Even when breaking down by market cap, the majority of ERC20 tokens, ranging from $100K to $100M in market cap, have fewer than 50k holders, with a median value of 5k holders per token.
The lower end of the above percentile table and scatter chart may be misleading due to the presence of outliers. Some outlier tokens have a native chain, such as WBTC versus BTC, and other outliers are multi-chain tokens. As a result, for a few number of outliers, their Ethereum representation does not reflect their total market capitalization, leading to an unusually low ERC20 holder count compared to their market cap. However, these outliers are not likely to significantly impact the median or 90th percentile value of the holder count, and our conclusion remains robust even when considering these anomalies.
As a side note, some of the most prominent ERC20 tokens with large numbers of holders are:
It's interesting to learn that a few top tokens have more holders than the sum of the rest of the majority of tokens. Approximately 33 million holders, accounting for duplications across different tokens, are distributed among the top 1000 ERC20 tokens. Of these, the top 15 tokens comprise over 50% (17 million holders), the top 60 make up over 70% (23 million), and the top 120 constitute over 80% (26 million). It's important to highlight that these figures do not account for deduplication of holder addresses. Given that many EVM token holders likely possess USDT or USDC in the same wallet address, the dominant tokens may actually have even greater influence than our data suggests.
3. Comparison of Oxen Wallet Count with Top ERC20 Wallet Count
If we assume the lower bound 2 described in section 1.3 is accurate, then there are already more than 3,000 Oxen holders at present. Compared with the percentile table of the top 1000 ERC20 tokens, Oxen's current holder count is already not far from the median value of 5,700. Assuming the lower bound 3 described in section 1.4, or approximately 9,600 Oxen holders, Oxen already outperforms 60% of the ERC20 tokens in the top 1000 list. This finding suggests that even if we migrate from the Oxen privacy chain to an EVM-compatible token, the increase in holders may be minimal. The same increase in holders could likely be achieved by the series of Enhancing the Awareness, Utility, and Anonymity Set of Oxen from Part 2 - Oxen Airdrop for ONS (Session User Name) to Part 11 - Promoting Lokinet Exit Marketplace through Preview Generation and In-app Navigation of Clearnet URLs.
4. Potential Issues of the Current Oxen Staking Process and Their Potential Solutions
The above Oxen holder vs ERC20 holder estimation and comparison might seem surprising. Could we have made a mistake? Are the numbers in sections 1.3 or 1.4 overestimated?
It's time to revisit our assumption in 1.3 or 1.4: Is it true that no one (not many investors) will hold more than 15,000 (or 3,750) Oxen unless they are an operator or contributor?
To investigate this question, let's recall a statement from the official team emphasizing that the lack of hardware wallet support is a deterrent for investment in Oxen. This suggests that it is highly unlikely for a large number of non-operator and non-contributor investors to hold more than 15,000 Oxen, particularly given the hardware wallet limitations.
On the flip side, to strengthen our argument, let's explore the ramifications if the assumptions in sections 1.3 or 1.4 are flawed. Should a significant number of holders own more than 15,000 Oxen but find limited opportunities for service node staking, this would indicate substantial barriers to becoming an Oxen service node operator, leading to a shortfall in available operators. As a result, the primary bottleneck in expanding the Oxen investor base appears to be operator scarcity rather than a lack of contributors. In this context, a transition from the Oxen privacy chain to an EVM token would offer little help in overcoming the operational hurdles associated with service nodes.
Service Node Bugs and Their Impact
There are some undocumented and strange service node bugs requiring operators to restart their services after being fully staked, otherwise risking being unregistered. These bugs might be a more significant blocker preventing new operators from entering the field. The last time I encountered this bug was less than two months ago.
Notification Challenges in the Staking System
Another issue with the current staking system is that there is no way to notify a potential contributor when a shared node is awaiting a contribution. This can be solved by integrating push notification into the Oxen wallet. However, migrating to an EVM token wouldn’t help as well, as we can't control whether MetaMask or any other third-party wallet can send push notifications to users when a new node is awaiting a stake.
Even if an EVM wallet could send push notifications to users, imagine 1000 projects competing with each other to send push notifications. There's little chance that Oxen will stand out among them either.
5. Potential of Integrating Oxen Wallet into Session
For many other cryptocurrency projects, their token and wallet are their main products; however, for Oxen/Session/Lokinet, our main products include not only Oxen but also Session and Lokinet. If an investor decides to invest in Oxen, they are very likely to have already done due diligence research by downloading and installing Session. It would be irresponsible if an investor were considering investing in Oxen but didn’t try Session themselves. By integrating an Oxen wallet into Session, we offer a seamless experience to investors who do their own due diligence when evaluating Session, removing the barrier of having to download a unfamiliar Oxen wallet.
On the other hand, anyone who uses Session is likely to be exposed to Oxen if we follow the strategies in the series of Enhancing the Awareness, Utility, and Anonymity Set of Oxen from Part 2 - Oxen Airdrop for ONS (Session User Name) to Part 11 - Promoting Lokinet Exit Marketplace through Preview Generation and In-app Navigation of Clearnet URLs. If we compare the theoretical lower bound (3k) or upper bound (47k) of Oxen holders with the target number of Session users by the end of the year (1M), we get a lower bound (0.3%) and upper bound (4.7%) conversion ratio from Session to Oxen. The upper bound seems distant, but there is a significant room to improve from the lower bound. As a side note, it might be benefitial to conduct a survey among Session users on the usage rate of cryptocurrencies.
Additionally, by integrating an Oxen wallet into Session, we can leverage the existing push notification system in Session to raise awareness of new nodes awaiting contributions. This can increase the incentive for potential operators, thereby addressing the challenges described in 4. Potential Issues of the Current Oxen Staking Process and Their Potential Solutions.
6. Conclusion
ORC-8 proposes multiple benefits of migrating the Oxen privacy chain to an ERC20 token, including a more familiar user experience for mainstream EVM wallet users. This research introduces a quantitative methodology by benchmarking popular ERC20 tokens and studying their on-chain wallet counts, and comparing with a theoretical estimation of Oxen’s wallet counts.
Our study suggests that migrating to an EVM chain for the benefit of wallet experience is likely to have limited impact. Instead, we advocate for:
The landscape of ERC20 tokens is full of competition, and while easier access to users is an advantage, we argue that if the price of Oxen doesn’t increase, investors might eventually sell off their OXEN/SENT ERC20 tokens regardless of how easy it is to access them in MetaMask or any other EVM compatible wallet. Easy come, easy go.
To increase price support of the Oxen token, we suspect that the impact of Session/Lokinet monetization is likely more significant than the migration from the Oxen privacy chain to an ERC20 token.
This is not to downplay the potential of other benefits of migrating to an ERC20 token, but those benefits deserve a detailed study and potentially quantitative estimation as well.