Market Analysis

The Ergo Ecosystem at a glance.
At present, the Ergo ecosystem offers a plethora of unique dApps and tools. The open source ethos and community development have provided a huge trove of code to learn from and build exciting new dApps and protocols. Unfortunately, many of these tools lack quality frontends, documentation, or accessible UX to get up and running with the applications.
The impact of high quality UX should not be underrated. A prime example of this can be seen in SigmaFi. The smart contracts were open source for many months with little interest from users, because most were unable to do anything with them. With the creation of a quality frontend and some good documentation, it is much easier to onboard a community to a new application. This dilemma is what Crux finance aims to solve. There is huge untapped potential lying dormant within the incredible development talent in the Ergo ecosystem. Crux Finance will unlock that potential wherever possible.

Ecosystem Analysis

Total addresses:
Jan 1, 2021: 3,284
Jan 1, 2022: 79,179
Jan 1, 2023: 174,895
Source: Ergo.watch
When examining the year-over-year data for on-chain addresses, we observe a surge in activity from 2021 to 2022, aligning with the bull market and the bullish narratives surrounding the Cardano-Ergo relationship. Remarkably, this growth continues into 2023, even during the bear market.
However, the Ergo ecosystem faces a unique challenge. While there are considerable numbers of dedicated users interested in utilizing the chain for financial activities, the speed and quality of deployment of these protocols have impeded the community's ability to do so effectively.
Let's take a closer look at two case studies: SigmaFi and SigmaUSD.
The initial design for SigmaFi bonds was developed by Kirat Singh and openly shared on GitHub on November 18, 2022. Although the project remained dormant for several months, a high-quality frontend for the dApp was developed and published at the beginning of February 2023. Subsequently, the TVL (Total Value Locked) of the dApp experienced rapid growth, even amidst the bear market. On March 16, 2023, the TVL amounted to approximately $10,000 USD, which increased 22-fold in roughly 6 weeks time to $220,000 USD by May 1st, 2023, according to data tracked by SigmaFi Telegram users.
An even more striking case study can be observed with the initial launch of SigmaUSD.io.
Within a 24-hour period, the SigUSD bank received 1.2 million ERG, equivalent to just over $3 million USD at the time. While this occurred during the bull market, the surge in activity was significant, highlighting the Ergo community's eagerness to engage with financial tools and dApps.
Additional benchmarks as of May 24, 2023, include Spectrum TVL at $1.91 million USD and Ergopad staking with 3,415 active stakers and TVL at $1.15 million USD.
Sources: Defillama, Ergopad
These case studies provide a glimpse into the potential user activity within other dApps and tools if they were to offer similar user experience (UX) quality and accessibility. Here are some examples:

SigmaO

SigmaO is a sophisticated tokenized options platform combined with an orderbook market for selling options and other tokens. The depth of novel trading strategies it offers is comparable to SigmaFi. However, the current UI and UX require further refinement to gain substantial adoption from the community. Interaction with UI elements feels clunky and confusing, and there is little information to help new users understand what they are doing. Given the complexity of options trading, comprehensive documentation and guides are essential for the platform's success.
Ergo Mixer, the first non-interactive, non-custodial mixer in the cryptocurrency space, has struggled to gain adoption and the necessary liquidity to be widely used. It is impossible to pinpoint the exact reason for lackluster adoption, but an easy area for improvement could be the unapproachable user experience of seeking the release on github and running it in conjunction with a full node or SAFEW wallet.
Babel fees, an attractive and marketable feature on the Ergo blockchain, allow users to spend non-ERG tokens for transaction fees. Presently, TokenJay is the only application that enables interaction with and creation of babel boxes, but it has limitations. Users are unable to view existing babel box orders or assess the depth of liquidity for potential fees. While the UI allows users to create a babel box, it lacks information crucial for those intending to use babel boxes as their fees or users who wish to arbitrage between market price and babel box price.
Development of these bots by Kushti is nearly complete, with ergoscript contracts shared on the Ergo forum. However, the off-chain bots have not been open-sourced, and a functional UI is currently unavailable. Grid bots would be an immensely appealing dApp for users seeking new DeFi trading strategies.