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Overview

The transaction component of the Dune Index measures blockchain activity by counting transactions that transfer at least 1 USD in value. This filtered approach helps focus on meaningful economic activity while maintaining a simple, verifiable methodology.

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Methodology

The transaction metric employs a straightforward filtering approach:
  1. Base Criteria
    • Count only transactions with transfers of $1 or more
    • Convert all token transfers to USD value at time of transaction
    • Include both native token and token contract transfers
  2. Rationale
    • $1 threshold excludes dust transactions and spam
    • Low threshold maintains inclusivity of meaningful activity
    • Simple criteria enables consistent cross-chain comparison
  3. Implementation
    • Track successful transfers only
    • Calculate USD value at transaction time
    • Aggregate across all supported token types

Transactions Metrics Code

For specifics on how this is implemented, refer to the transactions metrics code in the Spellbook repository.

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Technical Considerations

Several factors influence transaction counting:
  1. Value Calculation
    • Use time-weighted token prices
    • Account for token decimals and precision
    • Handle cases of missing price data
  2. Cross-Chain Standardization
    • Apply consistent $1 threshold across networks
    • Account for different token value representations
    • Handle multi-token transactions appropriately

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Limitations

Understanding the metric’s limitations is crucial:
  1. Threshold Effects
    • May exclude some meaningful sub-$1 activity
    • Still includes some non-meaningful activity above $1
    • Value threshold is nominal, not inflation-adjusted
  2. Technical Constraints
    • Requires reliable price data for all tokens
    • Must handle complex transaction types consistently
    • Network upgrades may affect transaction classification

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Usage Guidelines

When analyzing transaction data:
  1. Trend Analysis
    • Focus on directional changes over time
    • Compare across similar time periods
    • Consider seasonal and cyclical patterns
  2. Context
    • Use alongside other Dune Index components
    • Consider network-specific factors
    • Account for major protocol changes
The transaction count provides a foundational measure of blockchain adoption while the $1 threshold helps filter out noise, making it a valuable component of the Dune Index despite its inherent limitations.