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Ethereum (ETH) Leadership and Real-World Impact of Crypto: Andreessen Horowitz Publishes First Annual Report

Tue, 05/17/2022 - 15:30
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Vladislav Sopov
Pioneer of crypto-centric VC investments Andreessen Horowitz shared its first annual thesis on core Web3 trends
Ethereum (ETH) Leadership and Real-World Impact of Crypto: Andreessen Horowitz Publishes First Annual Report
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Eddy Lazzarin, head of protocol design and engineering and a partner at legendary VC innovator Andreessen Horowitz, has shared on Twitter the key takeaways of the first a16z annual report, State of Crypto.

CAGRs up, take rates down: Why is Web2 better than Web3?

According to the report, the Web3 industry is in the middle of its fourth "price-innovation" cycle. It is a mechanism whereby interest in a new idea meets money and results in technical and ideological beakthrough.

Within this cycle, multiple crypto metrics demostrate breathtaking compound annual growth rates. For instance, while global crypto market capitalization grows with 270.9% CAGR, start-up activity and developer activity surge with 63% and 69% CAGR, respectively.

Web3 ecosystems have already managed to become far more creator-friendly than its Web2 analogs. For instance, flagship NFT marketplace OpenSea charges its clients with 2.5% fees, while major social media platforms' take rates can be close to 100%.

According to our analysis, web3 paid out $174,000 per creator, while Meta paid out $0.10 per user, Spotify paid out $636 per artist, and YouTube paid out $2.47 per channel.

Also, the DeFi segment is already challenging top-tier banks by net volume of assets locked. Should it be compared to banking giants, it is ranked in the top 30.

Yes, we're still very early

Besides financal services, decentralized start-ups brought revolutionary designs into various industry segments. Ethereum (ETH) remains the backbone of the smart contracts ecosystem in terms of development activity and transaction pressure.

Its importance is amplified by Layer 2 networks: zk-rollups and optimistic rollups are set to push the barriers of Ethereum (ETH) scalability in the near future.

At the same time, if compared with global Internet adoption, crypto is still "very early." In terms of number of active users, crypto's adoption can be compared with that of the 1995-1996 Internet.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (, Monoreto, Attic Lab etc.)