How do I evaluate on-chain metrics like TVL, active addresses, and transaction volume?
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2 Answers
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I track TVL growth, daily active addresses, and transaction volume; I spot mismatched trends and sudden spikes to validate moves.
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On-chain health nerd here. I evaluate TVL, active addresses, and transaction volume by triangulating three signals I actually use.
- TVL: use DefiLlama for apples-to-apples across chains; read TVL in USD and watch price swings; watch for yield farming spikes that inflate TVL temporarily.
- Active addresses: track unique active addresses per day; prefer 7d moving average; note bots during airdrops; compare new addresses to cumulative.
- Transaction volume: look at on-chain value plus count; separate value moved in DeFi vs simple transfers; ignore spam transactions and gas wars; check avg transaction value.
- Normalization: compare same periods (week over week); use per-user or per-contract metrics.
- Cross-check: corroborate with Dune dashboards or Glassnode.
- Practical tip: if TVL grows but active addresses lag, you're likely relying on liquid providers rather than real user adoption.
- TVL: use DefiLlama for apples-to-apples across chains; read TVL in USD and watch price swings; watch for yield farming spikes that inflate TVL temporarily.
- Active addresses: track unique active addresses per day; prefer 7d moving average; note bots during airdrops; compare new addresses to cumulative.
- Transaction volume: look at on-chain value plus count; separate value moved in DeFi vs simple transfers; ignore spam transactions and gas wars; check avg transaction value.
- Normalization: compare same periods (week over week); use per-user or per-contract metrics.
- Cross-check: corroborate with Dune dashboards or Glassnode.
- Practical tip: if TVL grows but active addresses lag, you're likely relying on liquid providers rather than real user adoption.
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