Major VC a16z crypto introduces new cryptocurrency indicator

Scoring the development of cryptocurrencies

On the 11th, a16z crypto, the crypto asset (virtual currency) division of major venture capital firm a16z, introduced a new index, the State of Crypto Index.

You can explore the State of Crypto index yourself!

It’s interactive, so tweak the parameters, create different views, and share them with us ↓https://t.co/LDCLKZPLIj

— a16z crypto (@a16zcrypto) April 11, 2023

He explained that a new initiative started this year is the creation of this index. The State of Crypto Index presents the state of the cryptocurrency space from a technical rather than a financial perspective in one chart. The company explained that the index can be translated as “velocity of Web3 innovation and adoption.”

Specifically, 14 elements such as the number of active addresses and developers, the number of developer tool downloads, and the number of verified smart contracts are calculated by weighted average monthly, and the cryptocurrency situation is scored. ing. He explained that a16z crypto is an index to get a more accurate and detailed picture of the cryptocurrency situation.

The actual graph is below. The score was down after peaking in October 2021, but recently it has been on the rise again. Bitcoin (BTC) hit a new all-time high in November of the same year.

Source: a16z

At the time of writing, the State of Crypto Index score increased by 11.54% month-on-month. Although it was down 5.86% year-on-year, it rose more than 1,577% from three years ago.

The index also allows users to adjust the weighting of the factors used in the calculation. a16z crypto also has separate graphs for each element that makes up the index.

Publish report

a16z crypto has released a report on virtual currency this time. The above indices were introduced in conjunction with the publication of the report.

The 2023 edition of the report points out that blockchain active users and activity related to DeFi (decentralized finance) and NFTs (non-fungible tokens) are on the rise. The number of active developers has also increased steadily over the past three years. He also notes that the development of zero-knowledge proofs is progressing at a very fast pace.

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Others point out that the United States is losing its leadership in the Web3 area. Between 2018 and 2022, the share of U.S.-based developers in the world declined by 26%. And a16z crypto argued that “thoughtful regulation can facilitate the development of cryptocurrencies in the United States.”

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