Consensus 2021: Understanding LatAm Blockchain States and Protocol Usage Metrics

Every year the blockchain ecosystem gets together to take part in Consensus, one of the top blockchain conferences in the industry. Coindesk puts on a top speaker lineup with some surprises to keep the FUD away from attendees that are supporters of decentralized platforms and technologies being presented at the event.

This year was my first time attending the event in its online format, which to be honest had a few connection difficulties as every conference call I have been on for the last year. Nothing to be considered a huge problem, but we witness dropped speakers and overlapping conversations. The norm for this post-covid digital interactions :P

Personally, I was looking forward to the panels around Latin America state of crypto for Colombia and Brazil. This is something that has been recently in everyone's mind with the recent round raised by Bitso of more than 200 million USD. Which gave the Mexico-based startup a Unicorn status, with online banking incumbents such as Albo and Nubank setting up operations throughout Latin America.

The interest is definitely there, with some Ethereum based projects launched such as Proof of Humanity which is led by Argentinian entrepreneur Santiago Siri, the Universal Basic Income project built on top of the Kleros platform.

Also getting to know the founders and the communities behind Layer 1 and Layer 2 solutions such as Avalanche, NEAR and Polygon; the Coindesk team allocated more than two hours to each track which gave viewers a good chance of interacting with community members from the protocols and platforms in the chat rooms for networking opportunities. Also with enough content to then go and research some of the ideas discussed by the speakers or audience.

Those four days were quite exciting with the market “hopefully” recuperating. And the teams building the next generation of applications on top of the different blockchain protocols busy launching and delivering solutions to scale for the surging demand that we are seeing right now.

But most importantly we got together to see what the future will hold for NFTs, scaling, mining and creating value for users of these blockchain protocols.

America Latina the next frontier

I have been a fan of the Bankless podcast for the last year and half, so it was great to hear their thesis around Ultrasound money with the audience. Their research is one of the best I have seen and Going Bankless essay is one not to be missed. As a Mexican citizen I for one know how difficult it is to live through the fluctuations of fiat, which to be honest is one of the most stable in the region and that is saying quite a lot :P

So when I got into crypto, my main focus was to leapfrog the banking system and understand how to leverage the Open Finance platforms. During the conversations in the Colombia panel, it was quite surprising to see Davivienda and Bancolombia, two of the top banking institutions leading the narrative around crypto.

To be honest I am quite hesitant to support since most of these institutions are slow and with little incentive to support the users that want to go bankless. I gave them the benefit of the doubt and when I heard them discuss how they are beta testing crypto platforms it made me realize that they could be an important partner for onboarding new users into the blockchain.

We are still in the early phase of crypto adoption for the masses and in Colombia we are working to create opportunities for those that are unbanked and cannot access financial vehicles such a loans.

- Alejandro Beltran, CEO of buda.com

It was interesting to hear CEOs from the top exchanges such as Bitso discuss the untapped potential that crypto has in the Latin America region.

Brazil has one of the biggest internal markets in the region and I can attest to how quickly they adopt financial technologies, in every shop and restaurant you have cashless payments through Mercado Pago, in contrast to Mexico where it is still not widespread. This tells you how the Latin America region is leap frogging other regions in accepting solutions from fintech Startups. Making crypto platforms appealing to solve the unbanked problem that the region has.

Crypto communities and platforms

There were a lot of discussions happening between attendees in the chat space during the platforms for both Layer 1-2 talks and panels started. Definitely one of the most watched sessions was for the Polygon platform, getting a lot of the DeFi enthusiast to hang around. At one moment we were more than 2000 people connected in the chat; sadly just a few of us took part in exchanging ideas and networked during the talks. 

Polygon has delivered on its promise and we have seen how a lot of liquidity has started to move from decentralized exchanges (DEX) over to the Layer 2 solution and also have cut down drastically on the ETH gas fees so Liquidity Providers can leverage DEX’s such as Quick Swap and MaiFinance to farm on the Polygon platform.

Sandeep Nailwall who is its COO shared with the Coindesk.tv that Polygon is the most used Layer 2 solution, with the most 3rd party application adoption in all the Ethereum ecosystem. Surpassing Layer 1 contenders such as Solana and Polkadot.

Speaking of Layer 1 contenders, another platform showcased at Consensus was NEAR Protocol with a strong community backing it and leveraging a familiar technology stack for developers. They want to attract the creators and builders in crypto to develop the next generation of crypto solutions on top of their platform.

They recently announced their Ethereum Virtual Machine called Aurora, so Ethereum projects and developers can migrate over to NEAR, leveraging their reduced gas prices and making it easier to deploy decentralized applications (DApps) with a clean user experience.

Their founder Ilia Polosukin talked about how the ecosystem of DApps has grown in less than a year with the launch of Mintbase which is similar to OpenSea in ETH.

He also shared how NEAR can support the creation of Decentralized Autonomous Organizations (DAOs) and it is being supported by Sputnik Fund DAO, a farming platform such as Berry Club with a very unique way of building game dynamics into generating yields (I recommend you read about it here) and Ref Finance which is a Decentralized Exchange built on NEAR.

We know that for platforms and protocols to keep growing in their initial stages they need to be bootstrapped and for this the NEAR Foundation is offering grants with total funding of 3.5 million USD in NEAR, also looking to invest directly into protocols and solutions with more than 2 million USD in NEAR to be allocated during 2021. They are putting their weight behind those founders and builders that can leverage the NEAR protocol to develop the next generation of blockchain solutions.

We built a platform where transactions can get executed for an average of 1 cent and block time is 1 second, and with a strong community support from our Guilds who are experimenting and creating, so we can build an Open Web for everyone
- Ilia Polosukin, NEAR Protocol founder

Metrics to understand tokenomics growth

Now one of the big questions that come up when deciding which protocol to dive deep in and maybe buy its tokens - how do I know that there is real value being created on this blockchain protocol?

This question was answered by the founder of the Avalanche token Emin Gün Sirer during the panel discussion. It was quite interesting to get his point of view since he has been around the blockchain ecosystem long enough to understand when a protocol has solid foundations or not.

The number one way to know if a protocol is being used is by analyzing the amount of fees burned in all the current transactions on the blockchain; this is quite difficult to fake as this will take an enormous investment from bad actor(s)
- Emin Gün Sirer, founder of Avalanche

Also, another metric that I heard during the interview with the 1Confirmation crypto fund in the Bankless podcast is the amount of wallets that are allocating more than $100 USD; which is a good indicator of the number of users committed to the platform.

This I believe can be really important for new projects or protocols that are getting started, as it is imperative that they provide an explorer where anyone can perform this type of analysis.

There are some interesting platforms such as DegenData that are providing analytic for NFT platforms on Ethereum. They will become the next frontier for investors or users, enabling them to understand if the platforms they want to be involved are not fugazi.

Now that Bitcoin Conference is happening in Miami this week, let's prepare for what the next wave of innovation will bring to the crypto ecosystem. But most important is that all this technology is empowering users to have alternatives to the current fiat system and also enabling creators/developers to build valuable solutions that will give new crypto states the means to be sustainable.

This is just the beginning and we are in the early stages of the means of creating value.