A Bank for International Settlements study revealed significant discrepancies in widely used on-chain metrics, indicating that raw blockchain data often obscures true economic activity.
Estimates for Bitcoin on-chain transfer values can differ by as much as sixfold depending on measurement methodology. The core issue stems from Bitcoin's transaction structure, where unspent funds are returned to the sender as change outputs. These outputs are frequently counted as additional transfers despite not representing funds moved to a distinct counterparty.
The same measurement problem extends to Bitcoin's market capitalization. BIS researchers found that conventional market cap has at times been four times higher than realized capitalization, which values each Bitcoin at the price it last moved on-chain.
The study analyzed 100 billion blockchain records across Bitcoin, Ethereum and Tron, with findings suggesting measurement challenges are pervasive throughout the ecosystem.
Ethereum presented distinct hurdles due to widespread smart contract adoption. Out of approximately 67.5 million active contracts examined, the study could not categorize around 54 million using its established classifications.
Stablecoin activity compounds the problem. USDT deployed on Ethereum was more closely associated with DeFi protocols, while USDT on Tron was primarily linked to payment transactions and store-of-value applications. In 2022, USDT held by smart contracts on Ethereum exceeded 20 percent, while the corresponding figure on Tron was approximately 1 percent.
This functional divergence means aggregating USDT activity across blockchains conflates disparate types of economic activity and obscures actual use cases. Some analytics providers have begun addressing these issues by distinguishing between raw blockchain activity and adjusted measures designed to better reflect economic transfers. Visa's Onchain Analytics dashboard, powered by Allium Labs data, provides both total and adjusted stablecoin transaction volumes to filter out non-economic transfers.
