24 Hour Transaction volume (24Hv) is one of the most critical tokenomics metrics. Factors such as 24Hv and market cap are what popular coin rankers such as CoinGecko, CoinMarketCap, and CryptoSlate use to determine popularity of a token. On these platforms, one can easily see how the major players in crypto dominate the market and by how much. For example, at the time of writing, Bitcoin has a 24Hv of over $24 billion, more than double that of Ethereum just over $11 billion. Other coins and tokens in the top 10 boast amazing utility and likely belong to their own networks. Much can be gleaned from observing the top 100 tokens in general, and when I’m advising clients on tokenomics and how to build a sustainable, longterm project, I make them aware of these numbers.
About 24 Hour Transaction Volume
24-hour transaction volume is a key performance indicator for mass adoption. Generally speaking, the greater the 24-Hour transaction volume, the more widely adopted the token. If the transaction volume is high, this means the project is still very active, and therefore the price is more likely to fluctuate. If 24-Hour transaction volume is low, then this means that the project is likely dead or dying, and therefore the price is more likely to be stagnant.
The truth is, it is very difficult for just any project to hit the top 100 (I reference the top 100 because it would be the first page on CryptoSlate), and stay there, unless the token powers its own network, or is a unicorn. In other words, it is so immensely popular that it has mainstream appeal. For example, Shiba Inu, the ERC-20 equivalent of DogeCoin, is currently #11 and memecoin Pepe is #38. Smack dab in the middle between Bitcoin and Pepe, right at #20 is Litecoin, a coin with no utility, but is not a memecoin either. It’s only tagline is that it is a lighter, more environmentally friendly version of Bitcoin. And yet, Litecoin’s 24Hv is still close to $350 million. Litecoin’s staying power in the market points to an aspect of tokenomics that many crypto founders overlook:
In order to stay relevant as a cryptocurrency, the cryptocurrency must be able to be widely used.
This sounds obvious, but you wouldn’t believe how this simple fact is overlooked. Many times, founders have elaborate schemes for staking or rewards or governance, but at the end of the day, the best way to stay relevant is to be sure that the average holder can spend the token in everyday life.
To this point, Litecoin (LTC) has emerged as a prominent cryptocurrency for online shopping, securing the fourth spot in the rankings for the most used cryptocurrencies in this sector for the year 2022. According to a report by the crypto payment processor Coingate, Litecoin was involved in 88,295 transactions, representing 9.5% of all cryptocurrency transactions processed by CoinGate throughout the year. This marked a 6% increase from 83,620 transactions in 2021, showcasing a growing preference for Litecoin among online shoppers.
The report highlighted that January 2022 was particularly strong for Litecoin, recording the highest monthly usage with 8,971 transactions. The overall trend for Litecoin payments showed an upward trajectory, especially from mid-year. December saw a notable rise, with 7,968 transactions, which was over 11% higher than the numbers from June, the lowest performing month with 6,717 transactions. This indicates a steady increase in the adoption of Litecoin as a preferred payment method towards the end of the year.
Litecoin’s increasing popularity as an online payment option is largely attributed to its high network speed and relatively low transaction fees, making it a practical choice for everyday transactions. Often referred to as the “lighter” version of Bitcoin, Litecoin provides similar benefits while often enabling quicker and cheaper transactions. Despite the positive trends for Litecoin and other altcoins, Bitcoin continues to be the most dominant cryptocurrency for online payments, accounting for over 48% of all transactions in 2022. However, the landscape is shifting slightly, with altcoins like Litecoin beginning to erode Bitcoin’s long-standing dominance in the market.
Payment processing giants such as BitPay and Coinbase Commerce strictly limit the types of cryptocurrencies that vendors can accept. This puts other up and coming altcoins at a distinct disadvantage in terms of 24Hv due to the rule I stated in bold above, many of the major coins and tokens are able to maintain their place in the rankings simply because there are more usages for them.
Litecoin can be used to book travel arrangements with Travala, make real estate transactions with Re/Max, and buy e-gift cards for major stores including Amazon, Apple, Walmart, and Target with eGifter.
My solution to this is that altcoins need to think outside of just utility within their own projects, but look into how their tokens fit in with the greater landscape. Ensuring that their tokens can be exchanged in common eCommerce platforms such as Shopify and others would be a great start.
Luckily, there are startups that have emerged to target this issue. CryptoCadet is a payment processor that gives business owners total flexibility when it comes to the cryptocurrencies they accept. Designed with non-technical business owners in mind, CryptoCadet offers powerful features like the ability to accept nearly any cryptocurrency on virtually any kind of site, whether it is Shopify, Wordpress, Wix, Squarespace, or others, as well as send confirmation emails, create affiliate links, and integrate with bookkeeping software, all with minimal setup. To learn more about how CryptoCadet is revolutionizing crypto payments, or to integrate this solution into your business, visit ascendant.finance.
CryptoCadet, along with other companies like it, aim to expand the market share of altcoins by increasing the amount usage cases for them. We are definitely in for a great deal of excitement and innovation for this next generation of web3.
TechJD teaches developers how to transition to or start a career in web3. He discusses topics that go beyond just the code, including the business and legal aspects of running a successful web3 startup or being an impactful member of a team. You can learn more about the CryptoCadet Academy here or join the Discord.
twitter/x: https://twitter.com/theweb3jd
