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Quarterly Brief
Quarterly Reports

Archway Q1 2024 Brief

May 6, 2024 ⋅  8 min read

Key Insights

  • Archway’s TVL grew 123% QoQ to $8 million, notably led by Astrovault, a native DEX built on Archway.
  • User activity reached its highest since the chain’s inception, reaching quarter highs in transaction fees ($38,000), developer revenue ($19,000), and average ARCH burned (101,000 ARCH). The dApp Treasury is currently at $3M USD, which will be distributed to contract deployers.
  • Daily active addresses increased by over 50% as Archway’s ecosystem expanded. In Q1, it released Archway Connect and Drop Camp, two critical hubs for users and developers. With grant cohort 2, many dApp launches are in the pipeline for Q2.
  • The staking ratio increased to 47% in Q1, and 100 validators currently support the chain.

Primer

Archway (ARCH) is a Cosmos ecosystem Layer-1 blockchain, designed to redefine the economic model for decentralized applications (dApps). Archway also has a unique rewards system. Unlike traditional Layer-1 economic models, Archway directly compensates dApp developers through gas fee rebates, inflationary rewards share, and smart contract premiums. Furthermore, entrepreneurs and developers building on Archway can receive a stake in the growth and governance of the protocol itself. This model aims to foster a sustainable and thriving development ecosystem.By leveraging the Cosmos ecosystem’s Inter-Blockchain Communication (IBC) protocol, Archway ensures seamless interoperability across 50 chains, enhancing the reach and functionality of deployed dApps.

Archway’s technical foundation leverages the Cosmos SDK a software development kit that deploys blockchains using the Tendermint consensus algorithm, known for its speed, security, and efficiency. It features a complete implementation of CosmWasm, a smart contract platform enabling dApps to utilize multiple programming languages. With these capabilities, Archway’s endgame is a leading platform for developers seeking to build economically viable dApps within the Cosmos ecosystem.

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Key Metrics

Financial Overview

Network Overview

As a developer-led incentive chain, Archway’s metrics focus on contracts deployed and the amount paid to developers. In Q1, over $19,000 was paid to contract deployers, a 12.6% increase. February specifically saw Archway’s highest activity since the chain’s launch, paying over $9,000 in rewards. Considering that the USD value of ARCH decreased 8% QoQ, there was actually an even greater amount of ARCH paid out. After earning just over 64,000 ARCH in Q4, deployers brought in more than 80,000 ARCH in Q1 thanks to the influx of new applications and users.

In Q1 2024, 56 unique addresses launched 92 new contracts, raising the total number of unique contract deployments to 355, originating from 223 unique deployer addresses. The trend of new addresses deploying contracts is associated with reward payments, which peaked in February at 22 unique contracts deployed.

In Q1’24, Archway saw a daily average of 1,200 unique active addresses, marking a 52% QoQ increase. Alongside the growth in active addresses, the total transaction count rose by 66% to 383,000 for the quarter. February saw daily transactions peak at over 5,000, while daily active users (DAUs) — measuring the number of unique transaction signers daily — increased to an average of 983. This uptick in user activity typically trails behind developer activity; therefore, these metrics should continue to improve as more applications launch on the chain.

Ecosystem Overview

Total value locked (TVL) doubled to $8.1 million this quarter, peaking at $9.6 million. Astrovault, a native DEX built on Archway, held $8 million in TVL at quarter end. Most pairs on Astrovault are denominated in ARCH, with AXV (Astrovault’s native token) and ANDR (native token of developer toolkit Andromeda), as well as ATOM, wBTC, and ARCH as pools with the largest liquidity. As Astrovault continues to bootstrap liquidity and users, ARCH volume and transactions should increase as more projects get supported. Astrovault comprises over 95% of Archway’s TVL, followed by Liquid Finance and Eris. The latter two liquid staking protocols saw roughly $500,000 in combined TVL at quarter end.

Gelotto, ArchmonNFT, and Ambur are the main consumer protocols on Archway, and additional projects can be seen here. Q2 of this year is poised to witness a surge in dapps on Archway. Among the notable dapps during this period are Prisma Exchange, CALC Finance, Aeroscraper, Jackal Outpost, and ArchID Network Wars.

Since its launch, the staking ratio on Archway has consistently exceeded 40%. The network maintains 100 active validators operating under the Tendermint consensus, who all receive rewards for validating transactions. On x date, governance set the inflation rate at 10%, with half of the gas fees being burned. In Q1, over 100,000 ARCH was burned, a record amount for Archway.

Qualitative Analysis

Protocol Upgrades

The Constantine testnet successfully transitioned its endpoint from constantine.archway to constantine.archway.io, marking a smoother and more secure access point for users. Shortly thereafter, Archway released V6, which addressed and patched a critical flaw in a CosmWasm dependency, thus bolstering the network's security and stability. The upgrade introduced a reward withdrawal that bypassed additional gas fees. It also brought a reward accrual that is dispatched directly to the withdrawal address. Archway unveiled Archway Connect in January, a central hub designed to facilitate interaction among users and applications within the Archway ecosystem, further enriching community engagement and support.

Furthermore, Archway released Archway Developer CLI V2.1.0, which supports the latest V6 release and features a new protocol feature allowing developers to withdraw rewards directly. A comprehensive node operators guide was also released to prepare developers for Archway’s transition to V6, highlighting key updates necessary for smart contract and front-end application development.

February was rounded out with significant infrastructure developments, including establishing new Inter-Blockchain Communication (IBC) channels between Archway and Celestia, dYdX, Injective, Cudos, and Akash. Archway implemented a Minimum Price of Gas (mPoG) reduction on Mainnet, marking a significant milestone in making the network more accessible to users across the ecosystem.

Partnerships and Collaboration

Archway launched the second round of its grant program on January 11. These grants were disbursed in ARCH tokens. Although the specific amounts rewarded to each recipient were not disclosed, the purpose of the grants was to fuel various applications. Among the grantees were Gateway, which enhances developer tooling to incentivize the publishing of Web2 data to Archway, and CALC Finance, which simplifies user access to decentralized investment tools like DCA protocols and algorithmic strategies. Nomos, a project focused on cross-chain multi-sig solutions in collaboration with Archway, also received support. Lastly, ArchmonNFT received some allocation, which will help it continue pioneering digital passports and evolving NFTs based on onchain activity and quests.

Outbid, a new gamified launchpad, was launched on Archway, with the first successful sale conducted for Astrovault’s AXV token, raising a total of $310,496.62. The Astrovault team also launched their first airdrop for the community.

Archway continued to increase user experience and onboarding with its Wormhole and Noble integrations. Wormhole unlocks liquidity and community from the Solana ecosystem, while Noble integration enables one-click native USDC issuance on Archway. Additionally, a Kado integration brought seamless fiat on and off-ramps to Archway. Finally, Crypto.com listed the ARCH token on its exchange and enabled deposits and withdrawals of the token on the Crypto.com app.

Community and Governance

The Archway ecosystem has seen a flurry of governance proposals to enhance its structure and offerings this quarter. In January, a Nomos multi-sig proposal was approved, enabling DAO-owned smart contracts to collect rewards directly through a multi-sig wallet. Archway welcomed Outbid, a gamified launchpad designed to foster engagement and innovation within the ecosystem.

February was particularly eventful, starting with the launch of an airdrop by Astrovault, one of Archway's key projects. In an effort to bolster liquidity, the community voted to transfer 6 million ARCH to the liquidity council. Additionally, Archway released a delegation boost program, allocating 10 million ARCH over 10 weeks to validators who contribute significantly through research, educational content, community building, and establishing partnerships. In addition, Archway reduced the minimum price of gas (mPoG) from 900 to 140 Gway, down 84%.

Archway continued to expand its community outreach by introducing Drop Camp, a platform to complete quests and tasks. After completing these quests, users might see boosts in their onchain reputation and chances at receiving future airdrops from Archway, ecosystem applications, and partners. Archway’s dApp treasury also sits at $3 million, solely allocated for contract deployers on Mainnet. These initiatives reflect Archway's commitment to its technical infrastructure and growing community, setting the stage for continued growth and innovation.

Closing Summary

Archway saw its most impactful quarter regarding user activity and community development. Developers received $19,425 in rewards, and TVL reached an all-time high of $8 million. Archway’s largest DEX, Astrovault, increased to a peak of $9.7 million in March. Between onboarding several new DeFi and consumer applications and further developing user tooling and cross-chain capabilities within IBC, Archway continues to lay the foundation for increased usage in 2024.

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This report was commissioned by Archway Foundation. All content was produced independently by the author(s) and does not necessarily reflect the opinions of Messari, Inc. or the organization that requested the report. The commissioning organization does not influence editorial decision or content. Author(s) may hold cryptocurrencies named in this report. This report is meant for informational purposes only. It is not meant to serve as investment advice. You should conduct your own research, and consult an independent financial, tax, or legal advisor before making any investment decisions. Past performance of any asset is not indicative of future results. Please see our Terms of Service for more information.

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Toe is a technical research analyst at Messari specializing in DeFi coverage. Before joining Messari, he worked as a data scientist at both Celsius Network and IBM. Toe graduated from the University of Michigan School of Information.

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About the author

Toe is a technical research analyst at Messari specializing in DeFi coverage. Before joining Messari, he worked as a data scientist at both Celsius Network and IBM. Toe graduated from the University of Michigan School of Information.

Mentioned in this report