Part 4: Conclusion

2023-03-06 07:52:04 UTC

Through bull and bear markets, the secular trend towards tens of trillions of dollars residing on public blockchains over the coming years remains intact. The value proposition of blockchain technology remains clear: to enable individuals and organizations to securely transact in an immutable, censorship-resistant, and trustless environment. The failure of opaque centralized entities and the damage they have brought on the broader digital asset ecosystem underscore the need for decentralized financial infrastructure that provides users with transparency and reliability.

Improvements in digital asset data and infrastructure continue to open up new avenues for institutions and individuals to integrate digital assets with confidence. In this report we have described (i) how data providers help industry participants extract value from a novel type of data stemming from the digital asset ecosystem, and (ii) how infrastructure providers make operating and accessing blockchain networks feasible for everyday users.

Data firms provide crucial information emitting from a diverse and increasing range of sources. They are pioneering new methods for understanding and monitoring the emerging digital asset economy. Although there are signs of consolidation within the data provider landscape, companies are focusing on different niches and multiple winners will likely emerge. For example, Amberdata, Coin Metrics, and Kaiko are focusing on the data needs of institutions and traditional finance asset managers by providing high-quality off and on-chain data. Providers such as Dune and Flipside Crypto are well underway with cultivating large and diverse digital asset data contributor networks. Providers such as Nansen are championing the model of tagging addresses to facilitate deep analyses of on-chain asset movement.

Infrastructure providers are emerging as the backbone of applications and wallets that make interacting with blockchains possible. Liquid staking-as-a-service protocols such as Lido are democratizing participation in PoS networks and have emerged as an attractive alternative to established pure-play staking firms and CEXes. Node-as-a-service firms such as Alchemy and Infura have captured an enormous market share of node-related infrastructure services and are bridging the gap between blockchain networks and developer communities. Wallet providers such as Consensys (via Metamask) and Phantom have been integral in onboarding and retaining millions of users to the Ethereum and Solana ecosystems, respectively.

Nonetheless, across all of these industry verticals, dozens of competitors have emerged to offer nuanced services across different chains and targeting different use cases. For the time being, the risk of infrastructure being a winner-takes-all race across any one vertical is diminishing as new players with innovative strategies enter the space.

Disclosures

This report is sponsored by Amberdata. The content of this report contains views and opinions expressed by The Block's analysts which are solely their own opinions, and do not necessarily reflect the opinions of The Block or the organization that commissioned the report. The Block's analysts may have holdings in the assets discussed in this report and this statement is to disclose any perceived conflict of interest. Please refer to The Block's Financial Disclosures page for author holdings.

Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

This report is for informational purposes only and should not be relied upon as a basis for investment decisions, nor is it offered or intended to be used as legal, tax, investment, financial or other advice. You should conduct your own research and consult independent counsel on the matters discussed within this report. Past performance of any asset is not indicative of future results.