User behavior and token adoption on ERC20

TL;DR

This paper analyzes user behavior and token adoption patterns on the ERC20 platform, revealing diverse user profiles and the potential impact of portfolio diversity on network stability.

Contribution

It provides the first detailed social network analysis of ERC20 token transactions, highlighting behavioral heterogeneity and systemic implications.

Findings

Most users transact with few tokens

Diverse portfolios connect large parts of the network

Portfolio diversity may threaten system stability

Abstract

Cryptocurrencies and Blockchain-based technologies are disrupting all markets. While the potential of such technologies remains to be seen, there is a current need to understand emergent patterns of user behavior and token adoption in order to design future products. In this paper we analyze the social dynamics taking place during one arbitrary day on the ERC20 platform. We characterize the network of token transactions among agents. We show heterogeneous profiles of user behavior, portfolio diversity, and token adoption. While most users are specialized in transacting with a few tokens, those that have diverse portfolios are bridging across large parts of the network and may jeopardize the system stability. We believe this work to be a foundation for unveiling the usage dynamics of crypto-currencies networks.