Infrastructure protocols

A space to discuss the ‘Infrastructure’ market sector available on Token Terminal.

What are infrastructure protocols?

Infrastructure protocols are smart contract-based protocols that provide support functionality for e.g. DeFi protocols and DAOs in general. Some examples are oracles and domain name registries.

What problems do infrastructure protocols aim to solve?

The growing onchain economy requires tooling to function. Oracles help bring information from the real world onchain, which makes smart contracts orders of magnitude more powerful than if that information was not available. Similarly, onchain domain names improve the user experience for those transacting onchain.

How do infrastructure protocols solve those problems?

Oracles provide access to critical data or information outside of the blockchain ecosystem. Onchain domain name registries improve the UX of finding, identifying and utilizing a wallet address of an entity.

Why is now the right time to build and invest in infrastructure protocols?

Assets deposited into DeFi protocols has reached hundreds of billions of dollars. Without properly functioning, secure, and decentralized oracles, this is all value at risk. Similarly, in order to reach a global audience, being able to send assets directly to human readable names becomes a necessity for non-expert users.

What is the business model of infrastructure protocols?

The primary business model for infrastructure protocols is to generate revenue by charging fees for the service they provide.

Where can I view the current and historical (financial) performance of infrastructure protocols?

Infrastructure dashboard: Infrastructure | Markets | Token Terminal

Methodology for Infrastructure-specific metrics

Total value locked: assets deposited into the protocol’s contracts.
GMV: project-specific metric.
Fees: total fees paid by users.
Supply-side fees: share of fees that goes to the service providers.
Revenue: share of fees that goes to the protocol (and its tokenholders).
Token incentives: value of governance tokens distributed to users.
Daily active users: daily distinct addresses interacting with business relevant contracts.

Example project documentation