The microvelocity of money in Ethereum

Abstract

Abstract The transfer velocity of money is a macroeconomic quantity that measures the frequency of exchanges in an economy. For cryptoassets it can be exactly measured adopting a new approach, MicroVelocity. In this study we apply the framework to Ether, the native cryptocurrency of the Ethereum blockchain, to investigate velocity and its top contributors and how they can be characterised in the Ethereum ecosystem. While the inequalities and heterogeneity in wealth are well known, we here find that the same inequalities occur as well for MicroVelocity distribution and that this inequality is not explained just by wealth, but rather by the behaviour and economic activity of each individual agent.