Archway experienced significant ecosystem growth, with 72 unique addresses launching 124 new contracts, marking a notable increase from previous quarters.
Despite a 35% decline in ARCH's value, TVL in ARCH terms rose by 57%, reflecting strong growth in native metrics.
The staking ratio increased to 50% in Q2, with 100 validators supporting the chain.
Protocol upgrades, including the V.7 update, contributed to the ecosystem's growth.
Primer
Archway (ARCH) is a Layer-1 blockchain within the Cosmos ecosystem, designed to revolutionize the economic model for decentralized applications (dApps). It offers unique rewards to dApp developers through gas fee rebates, inflationary reward shares, and smart contract premiums. This model aims to create a sustainable and thriving development environment by giving developers a stake in the protocol's growth and governance.
Archway leverages the Inter-Blockchain Communication (IBC) protocol for seamless interoperability across 50 chains, enhancing dApp functionality. Its foundation is built on the Cosmos SDK, utilizing the Tendermint consensus algorithm known for speed, security, and efficiency. Archway also supports CosmWasm, enabling dApps to be developed in multiple programming languages.
In Q2, Archway, a developer-led incentive chain, paid $8,300 to contract deployers, representing a 57% decrease from the previous quarter. Q1 had seen the highest activity since the chain's inception, but Q2 marked the lowest developer revenues since Q3 2023. Nonetheless, developers earned $4,800 in April alone, which exceeded the combined earnings of May and June. The USD value of ARCH dropped by 35% QoQ, mirroring a similar decline in ARCH burned. Transaction fees for Q2 totaled $16,500, resulting in 67,800 ARCH being burned, as half of the transaction fees (paid in ARCH) are burned.
In Q2 2024, 72 unique addresses launched 124 new contracts on Archway, increasing the total number of unique deployments to 355, up from 223 unique deployer addresses. New address activity often aligns with reward payments. It peaked significantly on June 19 with 20 unique contracts deployed. The quarter saw notable growth in unique addresses, up 28.7% to 72, and in contracts deployed, up 34.8% to 124.
In Q2 2024, Archway experienced a daily average of 1,081 unique active addresses, an 8.3% decrease QoQ. Despite this, the total transaction count for the quarter surged by 63%, reaching 572,900. April was particularly notable, recording the highest daily transaction peak in Archway’s history at 9,700, with April 16 alone seeing 19,800 transactions. The number of daily active addresses, measured by unique transaction signers, peaked at 4,200 during this period. This increase in user activity often follows a rise in developer activity on the chain, suggesting that user metrics may continue to improve as more applications are launched.
In Q2, TVL on Archway decreased to $4 million, down from a peak of $8.3 million in April. This decline in USD terms was primarily due to a 35% drop in the value of ARCH. However, when measured in ARCH, TVL increased from 42 million to 66 million ARCH, a 57% QoQ rise. This marks the largest TVL in ARCH terms since Archway’s launch. The numbers point towards an underlying growth despite the apparent decrease in USD valuation.Astrovault, a native DEX built on Archway, held $3.9 million in TVL at the end of the quarter. Most pairs on Astrovault are denominated in ARCH, with AXV (Astrovault’s native token), ANDR (Andromeda’s native token), ATOM, wBTC, and ARCH as the pools with the largest liquidity. As Astrovault continues to bootstrap liquidity and attract users, ARCH volume and transactions are expected to increase as more projects receive support. Astrovault accounts for over 95% of Archway’s TVL, followed by Liquid Finance and Eris, two liquid staking protocols with a combined TVL of approximately $500,000 at the quarter's end.
Since its launch, the staking ratio on Archway has consistently exceeded 40% and reached 50% by the end of the quarter. The network supports 100 active validators operating under the Tendermint consensus and rewards them for validating transactions. Governance has set the inflation rate at 10%, with half of the gas fees being burned. In Q2, over 67,000 ARCH was burned, marking a record low for Archway.
Key Developments
Protocol Upgrades
Archway released its V7 in Q2, marking its most substantial upgrade to date. The upgrade introduces several new modules that enhance the platform's capabilities for both developers and users. Among the updates is the Callback module, which allows smart contracts to schedule and receive automated callbacks at the end of a block. This capability facilitates tasks that previously required external bots, such as loan liquidations, domain renewals, and auction settlements. Also, the new CW Fees module enables contracts to act as "fee-granters" to cover user transaction fees, potentially supporting subscription-based or freemium service models within dApps and enhancing user experience by reducing friction.
Additionally, the CW ICA module expands Archway's functionality into the Cosmos ecosystem. It allows contracts to manage accounts and execute transactions across different chains, thus broadening the scope for dApps to operate multichain. This approach could simplify processes such as claiming rewards from different blockchains without switching networks. The upgrade also includes the CW Errors module, which enhances error handling by providing feedback on execution errors — a crucial feature for developers using the Callback and CW ICA modules. This system allows developers to subscribe and receive error notifications, streamlining the development process and enhancing the capabilities of dApps on Archway. These updates collectively aim to improve automation, reduce costs, and expand the operational reach of applications built on Archway.
Partnerships
The Archies NFT collection launched on Ambur.xyz in April. DeFi projects Prisma, a fee-less order book DEX, and Aeroscraper, a decentralized borrow/lend protocol, launched on Archway this quarter. One of the first dApps on Archway was Arch.ID. It launched a new game in which players compete for a prize pot by submitting onchain interactions that iterate throughout the game’s duration.
In Q2, Archway introduced several key updates. One is Drop Camp, a platform where users can complete quests and tasks to enhance their onchain reputation and increase their chances of receiving future airdrops from Archway, ecosystem applications, and partners.
Additionally, Archway launched the “Friends with Benefits” campaign. It aims to reward users with exclusive NFT badges and tokens for participating in various quests. Archway is offering a $10,000 in USDC bounty for each successful listing of the ARCH token on a top 20 exchange and a monthly raffle of $1,000 in USDC for badge holders. The total prize pool for the campaign is up to $200,000. Archway’s dApp treasury, which stands at $1.3 million, is dedicated solely to contract deployers on mainnet. These initiatives show Archway's commitment to its technical infrastructure and robust community, setting the stage for more growth and innovation.
Closing Summary
Despite a 57% decline in payments to contract deployers and a drop in developer revenue since Q3 2023, April saw a significant boost with developers earning $4,800, indicating a resilient core of development activity. This period also saw the number of unique addresses launching new contracts rise to 72, with 124 new contracts deployed, reflecting positive engagement with developers.
The quarter also recorded a downturn in TVL, which fell to $4 million, mainly due to a 35% drop in the USD value of ARCH. However, when measured in ARCH, TVL rose by 57%, indicating underlying growth in native terms. Archway continued on its innovation trajectory, as seen in its active developer engagement. It also introduced significant protocol upgrades, like the V7 update, which included several pivotal modules like Callback and CW Fees. These enhancements aim to streamline operations across the blockchain and broaden the utility and reach of dApps within the Archway ecosystem.
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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.
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.
