State of Boba Network Q1 2024

Key Insights

• ROVI Network accounted for 96% of Boba BNB transactions, with 4.1 million transactions in Q1. ROVI Network is a “super app” that facilitates messaging, payments, and gaming.
• DeFi TVL increased 74% QoQ, led by Uniswap and Teahouse Finance. DeFi TVL on Boba BNB reached a new all-time high in Q1, ending the quarter at $509,600.
• BOBA’s circulating market cap increased 100% QoQ, outpacing the overall crypto market cap’s increase of 53%.
• Boba Ethereum underwent the Anchorage upgrade in April. The update introduced execution client diversity with Erigon as the sequencer and Geth as a verifying replica, proto-danksharding support, and account abstraction support.
• Boba’s Light Bridge also went live in April. The Light Bridge is a centralized solution that allows for direct fund bridging between different Layer-2 platforms and between L2s and Layer-1 networks, circumventing the typical 7-day challenge period.

Primer

Boba Network (BOBA) is a Layer-2 multichain scaling solution with a focus on gaming. Boba operates on Ethereum and BNB, and it is maintained by Enya Labs. As an optimistic rollup (OR) based on Optimism’s software development kit (SDK), Boba offers reduced gas fees, increased transaction throughput, L1 security guarantees, and EVM compatibility for smart contracts, such as NFTs and decentralized finance (DeFi).

This network also has unique features that set it apart from other ORs and Optimism forks, such as Hybrid Compute — the ability to connect to offchain computational resources, data, and APIs, a multichain focus, and fast exit bridging to L1.

Boba’s combination of features — specifically Hybrid Compute — enables decentralized applications (dapps) to run at a fraction of the cost of L1 dapps, leverage offchain computation via Web2 APIs, and provide the multichain solutions needed for blockchain gaming. Boba Network was previously active on Avalanche, Fantom, and Moonbeam, but those implementations have since been deprecated. For a full primer on Boba Network, refer to our Initiation of Coverage report.

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Key Metrics

Financial Overview

Market Cap and Revenue

In Q1 2024, the total crypto market cap experienced a sharp increase, largely driven by positive capital inflows to spot BTC ETFs. BOBA’s circulating market cap increased 100% QoQ to $219.1 million, exceeding the overall crypto market’s growth of 53%.

BOBA is the native asset of Boba Network, and its primary use cases include settling gas fees, governance, and invoking Hybrid Compute within smart contracts. BOBA is an ERC-20 on Ethereum, Boba Ethereum, and Boba BNB. BOBA ended Q1 with a circulating supply of 379.2 million. BOBA primarily experiences inflationary pressure due to staking rewards and unlocks from the initial allocation of the 500 million total BOBA. Each quarter, 30 million BOBA is unlocked, which will continue until all tokens are unlocked in June 2025.

As a rollup, Boba Network implementations mainly focus on execution while outsourcing other core functions — such as settlement, consensus, and data availability — to their respective Layer-1s (L1s). As such, its revenue is measured as total L2 fees minus L1 sequencer fees. Revenue decreased 67% QoQ denominated in BOBA but only 12% QoQ denominated in USD, as BOBA’s price increase offset the latter. Due to expensive L1 settlement fees in Q1, Boba Ethereum was not profitable in Q1, posting a loss of $11,800. Boba BNB, however, brought in $26,100 revenue for the quarter. Boba BNB benefitted from high transaction volume and low settlement costs, as it settles to BNB Smart Chain.

Network Overview

Usage

Average daily transactions declined 55% QoQ from 100,700 to 45,800. Over 99% of Boba transaction activity occurs on Boba BNB. Boba BNB began driving the vast majority of Boba transaction activity in Q2’23, where transactions increased 1,390% QoQ from 8,700 to 130,000. As stated in the Q2’23 report, ROVI Network, a multi-purpose “super app,” was responsible for this drastic increase. ROVI calls itself a “super app” because it packages many features into a single solution, like WeChat for the blockchain. In Q1, Boba BNB average daily transactions fell 55% QoQ from 100,300 to 45,300. As for Boba Ethereum, there was a slight increase in daily average transactions, up 15% from 392 to 451.

Average daily active addresses increased 17% QoQ to from 67 to 78. This was the first QoQ increase in average daily active addresses since Q1’23. Despite the relatively high number of transactions, daily active address activity remained low on Boba. The most active platform on Boba BNB, ROVI Network, mainly relies on forwarder contracts, thus skewing active addresses downwards in the same way a rollup skews active address activity downwards for its base layer L1.

After launching in late 2022, Boba BNB became the leader in 2023 in nearly all activity metrics. However, daily active addresses on Boba BNB have declined for four straight quarters and have lagged behind Boba Ethereum for the second straight quarter. Boba Ethereum averaged 52 daily active addresses (up 43% QoQ from 36), while Boba BNB averaged 28 daily active addresses (down 10% QoQ from 31).

Transaction fees on Boba Ethereum are paid in ETH, while transaction fees on Boba BNB are paid in BOBA. The average transaction fee on Boba Ethereum in Q1 increased 35% QoQ from $0.29 to $0.39. As for Boba BNB, the average transaction fee increased 250% QoQ from $0.0033 to $0.0116. This increase was due to BOBA’s price increase over Q1, as fees measured in BOBA decreased 67% QoQ. Despite this increase, average transaction fees on Boba BNB remained significantly cheaper than on Boba Ethereum.

Technical Developments

Boba Network underwent two significant technical changes in April, after the end of Q1.

On March 11, Boba Network proposed an upgrade to the Anchorage framework. The framework is based on Optimism's Bedrock architecture but includes enhancements for Boba Network. Key features of the upgrade include the following:

• Introduction of execution client diversity with Erigon as the sequencer and Geth as a verifying replica
• Proto-danksharding support
• Introduction of account abstraction
• Approximately a 40% reduction in gas fees

Voting for the proposal occurred from March 20 to 23, and the proposal passed with 1.1 million BOBA voting in favor (100% of the vote). The Anchorage update was then implemented on April 17.

On April 3, the Light Bridge was launched. The Light Bridge is designed as a centralized solution that allows for direct fund bridging between different Layer-2 platforms and between L2s and Layer-1 networks. This setup allows it to circumvent the standard 7-day challenge period typically associated with such transactions. The Light Bridge supports multiple bridging paths for BOBA, ETH, and BNB tokens, each with specific minimum and maximum transfer limits defined by smart contract parameters.

Ecosystem Overview

DeFi

Boba Network TVL denominated in USD increased from $4.4 million in Q4 to $7.7 million in Q1, a 74% QoQ increase. Boba Ethereum continues to represent the majority of TVL (94%) on Boba Network. Boba Ethereum TVL increased 74% QoQ from $4.1 million to $7.2 million. As for Boba BNB TVL, it reached an all-time high in Q1, ending the quarter at $509,600 (up 39% QoQ from $367,600).

The top three protocols by TVL on Boba Ethereum continued to grow their share in Q1. Uniswap, the largest protocol by TVL on Boba Ethereum, grew 108% QoQ from $1.1 million to $2.2 million. Uniswap is a popular AMM on multiple EVM networks which launched its V3 AMM on Boba Ethereum in November 2023. By the end of Q1, Uniswap’s TVL dominance was 31% (up 19% QoQ). The second largest protocol by TVL is SushiSwap (another multichain AMM DEX like Uniswap), which saw its TVL increase 56% QoQ from $1.1 million to $1.6 million. However, its TVL dominance fell 10% QoQ to 23%.

The protocol with the largest gains in TVL share for Q1 was Teahouse Finance, increasing 147% QoQ from $504,300 to $1.2 million. Teahouse Finance’s share of TVL increased 42% QoQ from 12% to 17%. Teahouse Finance is a liquidity provision protocol, offering users easy liquidity management strategies through its vaults product. In January, Teahouse Finance launched a 24-week liquidity incentives program, offering 980,000 BOBA ($568,400 at Q1 end) in rewards to users that deposited liquidity to three pools (USDC-WETH, USDC-BOBA, WBTC-WETH).

In total, Uniswap, SushiSwap, and Teahouse Finance represented 71% of DeFi TVL on Boba Ethereum, a QoQ increase of 12%. TVL gains were not just concentrated to the top three protocols. Other notable TVL gainers in Q1 included OolongSwap (up 34.9% QoQ to $918,00), Outcome Finance (up 96% QoQ $592,000), and Bodh Finance (up 29% QoQ to $167,400).

Contract Activity

Average daily contract calls were down 61% QoQ from 115,300 to 44,900. However, average daily contract calls remain significantly higher than Q1’23 (8,700). In Q2’23, contract calls increased 1,398% QoQ. This metric’s increase is heavily attributed to “super app” ROVI Network.

Unlike contract calls, average daily unique contract calls have remained relatively flat since Q1’23. Due to the architecture of ROVI Network, increased user interaction only scales the total contract calls metric and not unique contracts or contract caller metrics. In total, average daily unique contract calls were up 5% QoQ from 46 to 48. The majority of unique contract calls occurred on Boba Ethereum (up 19% QoQ to 32), whereas Boba BNB was down 10% QoQ to 17.

Average daily unique contracts called increased 14% QoQ from 63 to 72. Similarly to unique contracts called, the majority of unique contract callers are on Boba Ethereum (up 46% QoQ to 47). During this time, average daily unique contract callers on Boba BNB were down 12% QoQ to 26.

ROVI Network

ROVI Network is a multi-purpose infrastructure app that drives the majority of transaction activity on Boba BNB and the Boba Network as a whole. ROVI offers a social recovery wallet, an on/off ramp, and gasless transactions to create a familiar UX for Web3 and Web2 users. Its token, ROVI, which has 41,800 holders, is used for rewards and staking. ROVI integrates crypto through several pieces of infrastructure, including:

• Messaging, such as with existing platforms WhatsApp and Telegram, via Keyboard91.
• Financial services, such as payments, trading crypto, and earning yield on stables, via M91 Super App.
• Gaming, via Gaming91.

In Q1, three ROVI contracts accounted for 96% of all Boba BNB transactions:

• The ROVI token contract had 31,800 transactions addressed to it (1% of all transactions).
• The ROVI Forwarder contract had 1.9 million transactions addressed to it (47% of all transactions).

The M91 token contract had 2.0 million transactions addressed to it (48% of all transactions).

Growth and Development

Erigon Client and OP Stack

Enya Labs, a core contributor to Boba Network, has made a significant contribution to Erigon, an L2 Bedrock OP SDK-compatible client. Boba Network was the first optimistic rollup on OP SDK to use Erigon as its sequencer client (implemented as a part of the Anchorage update). Enya’s contribution to Erigon includes implementing support for eth_getProof upstream, a complex feature that had remained unaddressed since November 2020. This enhancement allows projects to leverage Erigon as an execution engine in the Optimism ecosystem. It’s particularly noteworthy as other projects have only been able to support running Bedrock as the replica. This distinction underscores the importance of Enya Labs’ work in augmenting the flexibility and diversity of the ecosystem.

Boba Network should benefit from compatible tooling from the Optimism ecosystem. Building with open-source technology is a positive-sum game, and Optimism has a large developer base which could be leveraged in the future. The greater L2 ecosystem would even benefit from the adoption of L2s that use zero-knowledge proofs or offchain data. As they push UX in multiple directions, L2s could bring about developments such as account abstraction from zkSync and Starknet, which align with Boba’s own initiatives.

Hybrid Compute and Gaming

Boba Network aims to be the leading solution for gaming and metaverse applications via its Hybrid Compute feature. This feature intends to solve the problem of closed-off blockchain ecosystems. As it stands, blockchains cannot use any data or compute from outside of their ecosystem without an API or oracle. With Hybrid Compute, developers can:

• Create advanced algorithms that are typically too expensive to run onchain.
• Get millisecond response times.
• Generate random numbers and other resources that typically carry security concerns in decentralized computational environments.
• Access low-cost storage, image, and audio processing.
• Connect to external gaming services such as Unreal Engine.
• Instantly mint NFTs based on game activity.
• View offchain price feeds (e.g., CoinGecko) to create variable pricing/actions.

With Hybrid Compute, developers can leverage legacy Web2 systems and solutions to build higher-quality blockchain games.

Closing Summary

ROVI Network continued to dominate overall Boba Network activity, accounting for 96% of Boba BNB transactions, with 4.1 million transactions in Q1. However, other sectors also saw growth in Q1. Namely, DeFi TVL increased QoQ by 74%, led by Uniswap and Teahouse Finance. Additionally, DeFi TVL on Boba BNB reached a new all-time high in Q1, ending the quarter at $509,600. Likely due to this ecosystem growth, BOBA’s 100% QoQ market cap increase outpaced the overall crypto market.

Boba underwent core technical developments in April. On April 17, the Anchorage update was implemented, including key features such as the introduction of execution client diversity with Erigon as the sequencer and Geth as a verifying replica, proto-danksharding support, and account abstraction support. Furthermore, Boba’s Light Bridge also went live, which will circumvent the standard 7-day challenge period typically associated with bridging transactions. All in all, the combination of Boba’s ecosystem growth and technical developments in Q1 established a strong foundation for the rest of Boba’s 2024.

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