November 07, 2022
The last three years have been a boom era for the burgeoning crypto and web3 industry, which has seen unprecedented amounts of VC money rush into the space.
But even after a big 2020 and 2021 for crypto, HODLers are feeling down on their luck — and that’s because major cryptos are down more than 50%.
But with every boom and bust comes a new cycle of building, growth, and adoption. After crypto’s fourth turning, it’s extremely hard to ignore all the growth that the industry has seen.
One of the best ways to surmise all that growth is the sheer number of places you can stack sats, ETH, or your favorite cryptocurrency. There are now dozens of crypto exchanges, and legacy players are getting in on the action too.
That means that — if you’re a growing fintech, crypto, or web3 company — you have to support dozens of brokerages, wallets, centralized exchanges, and connections. And given the notoriously open-border nature of crypto, there’s really no telling where you’ll have to meet your customers.
That’s why we’ve built a middle-ground to ingest, interpret, and serve data from financial accounts. The Front API helps lending services, crypto companies, social trading communities, banking solutions, tax companies, and advisors collect and make sense of financial information from clients.
Offering emerging fintech and finserv businesses these kinds of reliable solutions is our core mission. As we serve that information to firms building more informed and intelligent financial products, we have gained a lot of data on financial accounts connected through Front API which we can generalize, curate, and share insights about. We call it FrontIQ.
For the last few months, we’ve been observing centralized crypto exchanges — the place where people are going to buy their crypto. We’ve quantified the impact of some of the industry’s leading crypto platforms (and sized them up against their decentralized alternatives.)
Let’s dive into the research itself, starting with the value of assets connected:
- 1. The balances below are sorted in terms of average balance per user. These balances also only consider centralized exchanges (CEXes.)
- 2. The CEX with the highest balancer per user was Kraken, which had $15,750 on average among a hundred accounts ingested via Front API.
- 4. The average balance per user reported in Front API was lower than publicly-addressed figures reported by some CEXes, which can largely be ascribed to falling crypto valuations.
Another important consideration is that many users connecting in Front API are fintech natives, users with two or more brokerage accounts who skew younger and generally have lower balances.