Insight into the current status of AAVE from on-chain data: Why has it performed so well recently?

Original author: Riyue Xiaochu

Editor's note: AAVE has performed well recently and has now exceeded $170, more than double the lowest price during the "8.5" crash. With the launch of Bitcoin and Ethereum ETFs this year, Aave has benefited as an emerging asset class. In addition, as the global market demand for stablecoins increases, Aave's revenue and TVL continue to climb. Crypto KOL Riyue Xiaochu conducted a comprehensive analysis of Aave's on-chain data, and BlockBeats reproduced the full text as follows:

Key points:

· AAVE has a circulating market value of 2.3 billion US dollars and a FDV of 2.46 billion US dollars. 43,000 AAVEs are newly circulated each month.

· On-chain data shows that funds in the US time zone dominate the increase in AAVE holdings.

· Most of AAVE's large holders are in a profitable state, but the overall profit is not high. Judging from the profit and loss situation, most of the large holders are not the ones in the 2021 bull market, and most of the chips in the middle have been fully changed hands.

· The address of AAVE's holders has a large amount of funds and is a powerful big funder.

1 AAVE Overview

1) The total amount of AAVE is 16 million. According to coinmarketcap data, AAVE's current circulation is 14.93 million, with a circulation market value of 2.3 billion US dollars and FDV2.46 billion US dollars.

2) From the perspective of chip distribution, AAVE is mainly divided into two parts, 13 million 20-year exchange tokens are exchanged from LEND, and 3 million are used for ecological incentives. 3 million, 43,000 new circulation per month. The role is divided into two parts, one part is used for AAVE pledger rewards, and the other part has the creation team rewards.

3) AAVE Genesis Wallet still holds 790,000 AAVE, worth 122 million US dollars.

2 Distribution of chips on the chain

2.1 The top 10 holding addresses:

From the perspective of the on-chain holding addresses, the address with the largest holding is the AAVE staking address, with 2.99 million tokens pledged. Among the top 20 addresses, most are cold wallets of project parties and exchanges. Among them, the addresses worthy of special attention are

1) Holding address 9, the address where LEND migrated to AAVE, there are still 330,000 AAVE that have not been migrated, worth 50 million US dollars. Due to the time interval of several years, it is highly likely that the wallets of these tokens have forgotten the private keys. This is equivalent to the fact that these chips are considered to be destroyed.

2) The institution with the largest holding is blockchain capital, which holds 233,000 tokens. Blockchain capital is an investment institution of AAVE, and most of the chips have not been sold and are held to this day.

2.2 Overall Chip Distribution

From the perspective of chips, AAVE holds 37.29% of the project, but this includes staking chips, which belong to users. There are 2.19 million AAVE in Binance Exchange, accounting for 13.07%. Next are coinbase, Kraken, upbit, etc. The liquidity of AAVE on the main chain is in Balancer, which holds 880,000 AAVE and has a liquidity of up to 170 million US dollars. Secondly, in AAVE's uniswap, the liquidity is 13M.

From the perspective of public chain distribution, most of AAVE's 16 million AAVE are on the Ethereum main chain. Other chains are more, including BSC: 500,000 AAVE. Polygon: 229,000 AAVE.

2.3 Staking situation

1) From the perspective of changes in staking, AAVE has maintained a staking volume of 2 to 3 million. Since staking began in 2020, it quickly reached 2.8 million in October. It then reached a maximum of 3.6 million in February 2021.

2) From the perspective of changes in the number of stakes, AAVE stakers will also be affected by a certain bear market. In the bear market of 22, AAVE's staking volume dropped significantly, from 3.17 million to 1.97 million, a drop of 1.2 million. And when the market was not good in the second half of 23, there was also a continuous decline.

3) After May 24, AAVE's pledge continued to rise again. Now it has recovered to 2.99 million.

3 Exchange Chip Analysis

In the above picture, the first one represents the daily exchange deposit/withdrawal situation, where yellow represents the net deposit of the day, and blue represents the net withdrawal of the day. The shaded area is the accumulation of deposits and withdrawals. The second picture represents the average amount of each deposit/withdrawal, which is used to determine whether the deposit and withdrawal are the behavior of large investors or retail investors. Intuitively, the higher the value, the behavior of large investors, and the lower the peak value, the behavior of retail investors.

1) From the deposit and withdrawal of the exchange, from -89,000 on August 4 to +190,000 on September 16, it means that in more than a month, the cumulative net inflow in the exchange is about 280,000. However, there is some uncertainty here. The exchange here includes Coinbase, and Coinbase has the Prime Custody service. The AAVE deposited in the Custody service should not be counted as the user's deposit to Coinbase. On the contrary, the user gives AAVE to Coinbase for token custody, which is a performance of long-term holding.

2) From the average amount of each deposit. The amount of a single coin deposit is higher than the amount reflected. The maximum value is 8.9. There is an average deposit of 1,176. It means that it is a deposit from a large account. This is very consistent with our assumption above. Because providing Prime Custody service is definitely the behavior of a large account.

I excluded the data of coinbase exchange and counted the changes of AAVE holdings in other exchanges. It can be clearly seen that since July 25, AAVE has had a clear net outflow. It has dropped from 3.45 million to 3.28 million, with a net outflow of 170,000.

The above picture shows the number of transfers of wallet addresses (contract addresses) of DEX and CEX, which is the cumulative number of transfers in and out. Please note that the above time is UTC.

From CEX, it can be seen that the most active time on CEX is UTC 15:00, 16:00, and 17:00. If converted to Beijing time, it is 11 pm, 12 pm, and 1 am in China. This is the most active time for the US world. The transfer-in and transfer-out volumes are the smallest at 12:00 and 17:00 Beijing time, which is the most active time for Asia. This can indirectly indicate that AAVE has been mainly active with US funds in the past two months.

From DEX, we can see that the most active time on DEX is UTC 21:00, followed by 17:00 and 07:00. Converted to Beijing time, the most active time is still 8 am. Of course, we can also clearly see that the overall transfer in and out of the exchange is higher than the situation.

From the transfers of DEX and CEX, it can be clearly seen that funds are more active in the exchange, and they are funds in the US time zone.

4 In-depth portrait of large coin holders

Please note that the large coin holders here are the large coin holders who hold AAVE after excluding addresses such as project parties, DEX, CEX, MEV, DEX intermediate wallets, and CEX intermediate wallets. These large coin holders may include institutions.

The above is the core information of the large coin holders.

1) ROI. From the perspective of ROI, more than 75% of the large coin holders are in a profitable state, but the profit is not high. The median profit is 20%, and the maximum profit is 137%. However, 26% of the large holders are still in a loss state, with the largest loss of 66%. Combined with the price of AAVE, AAVE's highest point was $668 in the 21-year bull market, and the lowest point was $49. It can be clearly inferred from the profit and loss that most of the chips have been fully changed hands.

2) HoldDay represents the length of time the address is held, the median of which is 287 days, about 9 months. This shows that more than half of the large holders bought it just this year. The other half was bought before 24 years ago. Only 25% of the large holders hold for more than 647 days, which is more than 1 year. The largest holding address is 1342 days.

3) TransactionsPerDay (TPD) refers to the average daily transfer times of the address, which is used to measure the activity of the wallet on the chain, and can be used to judge whether the holder is a long-term or short-term operation. From the data, the median TPD of AAVE's large holders is 0.048 times, that is, the monthly average is 1~2 times, which mainly reflects that the large holders of AAVE rarely make frequent transactions. This is completely different from the current on-chain Chongtugou and MeMe.

4) From the addressAge, we can find that the median wallet time is 654 days, and more than three-quarters of the wallets have been more than 1147 days. This shows that most wallets are not newly generated addresses and have existed for some time.

Overall, most of the wallets of AAVE's major coin holders are wallets that have been in use for more than 9 months, and the number of daily transfers is not active, so they are not frequent traders. Most of them are in a profitable state, but the overall profit is not high. From the perspective of profit and loss, most of the major holders are not the ones in the 21-year bull market, and most of the chips in the middle have been fully changed hands.

Further study the cost of major holders. The above figure is a relationship diagram between the cost of major coin holders and the amount of holdings. From the above figure, we can intuitively see

1) The average holding cost of most major holders is concentrated between $85 and $150, especially around $100, with the highest concentration. This price is also the recent range of fluctuations. We can see that between $85 and $100, there are positions of all levels, with positions of around $6K, and positions of 20K and 35K.

2) There is a group of gaps in the cost range, with prices between $200 and $200. AAVE has been priced below $200 since April 22, indicating that these large holders have been holding for a long time. It can be seen that the overall chips in this part are relatively small, with the largest one holding around $20K, and most of them holding less than $10K.

3) There is also a group of holding costs below $70, which have doubled their profits according to the current price, but the overall proportion is also relatively small.

5 Analysis of large holders who increased their holdings in the last 60 days

Note: Large holders who increased their holdings refer to large holders who made new purchases, and they may overlap with large holders who held positions. For example, a certain address is a large holder of the Top 100 and increased its holdings. If this address holds 50K and has purchased 2K in the recent period, only 2K will be used in the analysis here.

5.1 Distribution of increased holdings

The above figure shows the increase in holdings by large holders in the last 60 days. The largest increase in holdings is between 0K and 1K, about 140,000 US dollars, with a total of 23 addresses. The second largest increase in holdings is between 1K and 2K, with a total of 15 addresses. Secondly, between 2K~12K, there are different numbers of addresses with different holdings. However, above 14K, there are fewer addresses with only 1 holding of each type.

The largest address holding is around 26K, worth about 4 million US dollars.

5.2 Basic information of increased holdings

1) Analysis of address holding duration:

The median of the addressAge column is 281.5 days, which is about 9 months. This shows that more than half of the large holders generated addresses in less than a year. And 25% of the increasers are older than 42 days. Comparing it with large holders, it is found that the age of the address is significantly lower than that of large holders (median is 654 days), which shows that the recent increase in holders is a new batch of buyers.

2) Daily transfer times (TransactionsPerDay, TPD) analysis:

The median of transactionPerDay is 0.0731 times/day, that is, there are about 2 transactions per month. This shows that the large holders of AAVE have a low transaction frequency, do not frequently participate in on-chain activities, and are more likely to hold for a long time. This is very different from some current high-frequency short-term trading investors, and further shows that most holders have adopted a more conservative operation strategy.

3) TokenNum

The number of tokens held by the address can be used to measure the investment style of the address from one perspective. If the number is relatively large, it is often an address that casts a wide net. The number of tokens is relatively small, and investors tend to buy heavily in favored coins. The median number of coins held by AAVE holders is 4, because the statistics here include AAVE itself, which means that 50% of the holders hold less than 3 other coins. Among them, 25% of the addresses hold AAVE alone.

5.3 Total assets of holders

The total assets of the holders' addresses can measure the financial strength of the addresses, and to a certain extent, the potential strength of these holders to continue buying in the future. From the data, there are 26, 10, 8, and 9 addresses with assets between 0~500K, 500K~1M, 1M~1.5M, and 1.5M~2M. This shows that AAVE holders are addresses with relatively large amounts of funds. The address with the largest fund is 20.5M.

5.4 Graph of holdings of accumulators

This graph clearly shows that the largest holding of AAVE accumulators is AAVE, which is of course a very natural answer. The second and third positions are ETH and USDT respectively. The other holdings are ONDO, USDC, UNI, FET, LINK, PENDLE, ETH, stETH, aETHAAVE, and USDT. Judging from the graph, accumulators prefer traditional projects rather than the latest hot spots and narratives.

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