State of Cosmos Hub Q2’24

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Key Insights

Financial Analysis

ATOM price declined 45.3% QoQ from $12.63 to $6.73 in Q2’24, aligning with the broader contraction in altcoin markets. This decline followed a period of ATOM price increase of 46.6% from $7.2 to $12.30 in Q4’23.

In Q2’24, ATOM price and revenue (USD), which is derived from total transaction fees, significantly declined QoQ. ATOM price declined 45.3% QoQ from $12.30 to $6.73 in Q2’24.

ATOM’s inflation marginally increased by 1.1% QoQ, from 11.7% to 11.8% in Q2’24. The diluting effects of this inflation were minimized by the growth in real yield, which rose 8.9% QoQ, from 4.1% to 4.4% in the same period. This net-positive divergence reduced the effective tax on non-stakers and enhanced value for all ATOM holders.Validator nodes risk having their ATOM rewards slashed for infractions such as double-signing transactions or prolonged offline periods. The slashed rewards are burned.

Average daily new addresses declined by 42% QoQ from 5,700 to 1,600 in Q2’24. Average daily transactions exhibited a greater decline of 56.2% QoQ falling from 151,000 to 66,000 in Q2’24. This contraction aligns with broader macroeconomic trends

Inscription-based transaction activity in Q2’24 exhibited significant shifts in both volume and frequency compared to the previous two quarters. Whereas Q4’23 and Q1’24 experienced sporadic and volatile transaction spikes, Q2’24 saw a transition to lower and less volatile transaction activity. That said, transaction activity was still elevated compared to pre-inscriptions deployment despite a notable decline in active addresses QoQ.

In Q2’24, the engaged staking rate continued its QoQ decline, dropping from a high of 66% to 63.6% in Q2’24. This decline occurred despite the total staked ATOM remaining stable at 240 million, suggesting newly minted ATOM tokens likely being kept available to cover validators’ operational expenses.

In Q2’24, a notable divergence emerged in IBC transfer volumes despite the sharp QoQ decline in average daily IBC unique senders and receivers for both inbound and outbound IBC transfers. Average Daily IBC Transfers-In increased 20.7% QoQ, rising from 6,700 to 8,100 in Q2’24. In contrast, Average Daily IBC Transfers-Out decreased 45.6% QoQ, dropping from 10,200 to 5,500 in Q2’24.

This divergence reflects a trend where interchain interactions through inbound transfers increased 20.7% QoQ, going from 6,700 to 8,100 in Q2’24, despite the decline in daily active addresses. Moreover, the contrasting trends between inbound and outbound IBC transfers suggest that fewer daily active addresses are engaging in more frequent inbound transactions. They are also becoming more strategic in their interchain activities, focusing on specific use cases offered by the connected chains. Meanwhile, outbound activity is becoming more concentrated and less frequent.

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