Tezos First Quarter 2023 Status Report: Market Value Increases While Gas Fee Revenue Decreases

On April 24th, Messari released Tezos’ first quarter 2023 status report, with the following key points: Tezos’ market value increased by 55% in the current quarter, outperforming the overall encryption market (market value growth of 46%). However, the total gas fee revenue decreased by 23% month on month (excluding storage costs). In addition, Tezos has implemented various destruction mechanisms. This includes creating new accounts or smart contracts, allocating additional smart contract storage, and deleting validator errors. Despite these destruction mechanisms, the destruction rate is very low, with an annual proportion of less than 1%. The circulation supply of XTZ increased by 1.1% month on month and 4.4% annually in the quarter. After strong performance in the fourth quarter, Tezos’ online activities showed mixed results in the first quarter of 2023. Although the total active accounts increased by 1.4% month on month, reaching the highest level since the first quarter of 2022, new accounts decreased by 40% month on month. The surge in new accounts in the fourth quarter of 2022 was due to the casting of Manchester United NFT. In terms of network usage, the daily average smart contract call decreased by 25% month on month, reaching the lowest level in a year. However, the trading volume slightly increased month on month, with an average of approximately 45000 transactions per day last year. The decline in smart contract calls comes from the NFT and gaming fields.

Messari: Q1 Tezos market value increased by 55%, gas fee revenue decreased by 23% month on month

On April 24th, Messari released Tezos’ first quarter 2023 status report. Tezos, a blockchain platform to support smart contracts and decentralized applications, has been showing promising performance in the current quarter. Here are the key points of the report that highlight the platform’s growth and challenges.

Outline

I. Introduction
– Brief overview of Tezos
– Purpose of the article
II. Market Value Growth
– Comparison with overall encryption market
– Factors contributing to the growth
– Implications for investors
III. Gas Fee Revenue
– Measuring the usage of the Tezos network
– How gas fees are calculated
– Challenges to gas fee revenue
– Potential solutions
IV. Destruction Mechanisms
– What are destruction mechanisms in Tezos
– How they are implemented
– The effects on the platform’s growth and sustainability
V. Circulation Supply of XTZ
– Definition of circulation supply
– Growth rate in Q1 2023
– Reasons behind the increase
VI. Online Activities
– Metrics on Tezos’ online presence
– Analysis of the trends
– The impact of Manchester United NFT
VII. Network Usage
– Definition of daily average smart contract call
– The decrease in number
– The possible reasons behind it
– Trading Volume
VIII. Conclusion
– Summary of the article
– The significance of the report
– Future outlook

Tezos First Quarter 2023 Status Report: Market Value Increases While Gas Fee Revenue Decreases

Tezos has been one of the most exciting blockchain projects in recent years due to its novel approach to resolving governance issues. As of the first quarter of 2023, Tezos’ market value has increased significantly by 55%, which has outperformed the overall encryption market. This performance is an impressive indication of the continuous growth of the platform and the increasing confidence of investors in the technology.
This positive trend was partially driven by the platform’s success in the NFT and gaming industries. Tezos has been gaining attention from gaming-focused developers due to some of the low transaction fees and higher throughput available on the platform which makes it attractive to many developers.

Gas Fee Revenue

Although Tezos’ market value has shown strong growth in the first quarter of 2023, the total gas fee revenue decreased by 23% in comparison to the previous month (excluding the storage costs). This decrease is due to gas fees being paid in XTZ, which are volatile and subject to fluctuations. This makes it difficult to predict future revenue for the platform.
This decrease in gas fee revenue highlights some of the challenges that the platform must address. It is an indication that more work needs to be done to support and stimulate the usage of the network by attracting more developers, services and users to the ecosystem.
Tezos is working on solutions to control the volatility of gas fee prices. A potential solution offered is to explore off-chain solutions where NFT marketplaces can be hosted off the Tezos network’s main chain.

Destruction Mechanisms

On the brighter side of things, Tezos’ report states that Tezos has implemented various destruction mechanisms, including creating new accounts or smart contracts, allocating additional smart contract storage, and deleting validator errors, to regulate the network’s inflation. Despite these destruction mechanisms, the destruction rate shows a very low average of less than 1%. This is a good sign that the network remains stable and sustainable as the number of tokens in circulation increases over time.

Circulation Supply of XTZ

One of the most exciting data points in the report is that the circulation supply of XTZ increased by 1.1% month on month and 4.4% annually in the quarter. This increase is mainly due to the conversion of baking accounts, which increased by 6.62% month on month in the first quarter of 2023.

Online Activities

Tezos has shown mixed results in online activities in the first quarter of 2023. While the total active accounts increased by 1.4% month on month and reached the highest level since the first quarter of 2022, new accounts decreased by 40% month on month. The casting of Manchester United NFT was a significant factor in the surge in new accounts in the fourth quarter of 2022.

Network Usage

Tezos’ report suggests that daily average smart contract calls decreased by 25% month on month, reaching the lowest level in a year. This trend could be due to the decline in NFT and gaming fields as well as the challenging market conditions that Tezos still operates within. However, despite the decline in smart contract calls, the trading volume slightly increased month on month, with an average of approximately 45,000 transactions per day last year.

Conclusion

Overall, the first quarter of 2023 has been a mixed bag for Tezos, particularly in its online activities and network usage. The platform showed impressive growth in market value and circulation supply, while also showing some decline in gas fee revenue and network usage. Addressing these challenges could help Tezos realize its full potential, particularly as the blockchain ecosystem develops and begins to prove its viability.

FAQs

1. What are the destruction mechanisms in Tezos?
– They are mechanisms created to limit inflation by deleting validator errors, allocating more smart contract storage, and by creating new accounts or smart contracts that destructively receive newly minted tokens.
2. How does Tezos track gas fees?
– Tezos tracks gas fees by measuring the amount of XTZ that is spent when transacting within the network.
3. What is the future outlook for Tezos?
– Tezos looks forward with optimism towards the future, believing that it can continue to innovate and compete in the blockchain space.