State of Sia Q2 2024

Active storage contracts on Sia increased by 23% QoQ in Q2’24, maintaining the growth momentum in Q1. This increase likely stemmed from either more new contracts being initiated at the end of the quarter or longer-term contracts starting early in the quarter. With a similar impact on network storage activity, incremental updates to Sia’s renting module may have also contributed to this growth, given its improvements to user experience.

In Q2’24, revenue in SC terms increased by 22% QoQ, peaking in April 2024. However, revenue in USD terms declined by 25% QoQ despite stable storage demand and a 23% QoQ increase in active contracts. USD revenue likely fell due to a 54% QoQ decrease in the SC price, driven by the Q2 crypto market decline. For comparison, BTC, ETH, and SOL market caps also fell by 12%, 6%, and 25% QoQ, respectively. Regardless, Sia’s ongoing improvements to the network’s renting and hosting modules, with incremental upgrades throughout the quarter, helped maintain the network’s storage demand.

Storage prices in USD declined by 23% QoQ, dropping from $2 to $1.58 per TB. This reduction may have contributed to increased storage demand in Q2, as evidenced by a 23% QoQ rise in active contracts and a 41% QoQ increase in new storage contracts. Conversely, storage prices in SC rose by 40% QoQ, increasing from 199 SC to 280 SC per TB. The change reflected the growing access to cheaper storage in SC terms due to the decline in the USD value of SC in Q2.

For the first time in three quarters, upload and download costs in SC rose by 44% and 37%, respectively. This increase aligns with the decline in the USD value of SC, allowing renters to purchase storage more cheaply in Q2 compared to Q1. The lower USD value of SC, combined with a tightening supply of storage, may have incentivized storage providers to raise prices. This adjustment helps sustain revenue in USD terms while limiting the SC supply.

The USD price for upload bandwidth moved in the opposite direction compared to SC’s price. While SC’s price declined 53% QoQ, the USD prices for upload bandwidth costs jumped to 186% QoQ, the highest level in three consecutive quarters. This surge in upload bandwidth cost in USD did not result in a proportional decrease in upload bandwidth cost in SC terms, which instead increased by 44% QoQ. Meanwhile, download bandwidth cost in USD terms dropped by 37% QoQ, driving a corresponding increase in download bandwidth cost in SC terms.

Total block rewards for Q2 declined 35% QoQ, with miners earning significantly less compared to Q1. F2Pool saw the most substantial drop, producing no blocks and losing 100% of its Q1 share. Luxor trailed a close second with a 60% QoQ decrease in rewards. For the third consecutive quarter, DxPool retained its position as the top miner, although its share of rewards decreased 49% QoQ, falling from $2.3 million to $1.1 million.

F2Pool lost the third spot to SiaMining, ending the quarter with no blocks mined. Again, Luxor followed closely, experiencing a 45% QoQ decrease in blocks mined. Meanwhile, DxPool’s market share as the top miner declined by 26% QoQ, though it remains the leading miner. As other mining pools continue to lose market share, the level of dominance on the network could pose security risks to the Sia blockchain.

Sia’s market cap fell from $570 million in Q1’24 to $272 million by Q2’24’s end, marking a 53% decrease QoQ. This sharp decline reflects the broader downturn in the cryptocurrency market during this period. Despite the selloff, demand for Sia’s core product remained stable as active and new storage contracts grew by 23% and 41% QoQ, respectively.

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