June 25, 2023
Assessing the Competitiveness of Web3 Sectors: Insights into Capital Concentration
In this post we look at the distribution of capital within different sectors of web3 protocols; E.g. dexes, bridges, lending, derivatives, etc. To gauge the competitiveness of these sectors, we turn to a trusted tool from the world of economics: the Herfindahl-Hirschman Index (HHI). The Herfindahl-Hirschman Index: A Measure of Market Concentration HHI is a measure of the level of competition among firms in a market, or in our case, protocols within a sector.