Data is absolutely essential for any market that runs smoothly. Consider this: if a market is efficient, it means prices accurately reflect all the available information. That makes quality information incredibly important. And to get that information, you need data! Traditional financial markets are rich in data, and it’s generally well-organized and easy to access. This gives market players plenty of tools for analysis. Digital asset markets? They’re overflowing with data, but it’s often unstructured and lacks standardization, making fundamental and quantitative analysis more challenging.

It’s a bit of an irony: data is a sticking point for digital assets, especially given that public blockchains are praised for their transparency. Sure, transactions and data on the blockchain are pretty much instantly available to anyone who can access the system. But here’s the catch: transparency isn’t the same as accessibility, let alone usability. If we don’t make this data accessible, ensure it’s easily shared, and provide the right context, then just having mountains of raw blockchain data won’t automatically make the crypto market more efficient. And while the complexity of blockchain data might create opportunities for really sharp analysts to find an edge, this lack of consistent, user-friendly data likely adds to volatility, which can be a turn-off for big institutional investors.

So far, the somewhat scattered nature of blockchain data hasn’t been a major problem, mostly because the market has been driven by individual retail investors. But if the crypto market is to truly mature and attract serious institutional players – think pension funds, endowments, and insurance companies – it needs to step up its game.

To improve things, the digital asset world can take cues from traditional markets. Think about it: the value of tokens is supposed to increase as a project succeeds. That means key performance indicators (KPIs) should be readily available, almost like having ‘investor relations’ pages, but specifically for token holders. It’s not realistic to expect crypto startups to disclose information on the same scale as massive public corporations, but there are definitely intermediate steps they can take to make things much better.

Take, for example, some data points that would be useful for almost all projects to share. Things like: supply schedules (with details on token inflation and burn mechanisms, along with unlock schedules), fees charged, number of active users, and daily transaction counts. Of course, not all projects will have the same exact KPIs – for instance, what’s important for a smart contract platform will be different from an application or a DeFi protocol. Smart contract platforms might want to highlight the number of applications deployed within their ecosystem. DeFi protocols might focus on showcasing Total Value Locked (TVL) or trading volumes. No matter the specifics, every project should strive to disclose as many relevant data points as possible.

Now, here’s a crucial point: any data shared needs to come with clear and detailed definitions and explain the methodologies used to calculate it. Even better if projects can provide reproducible code showing exactly how this information is derived from the blockchain. Furthermore, this data should be available with complete historical records and easily accessible—either downloadable or through APIs (Application Programming Interfaces).

When projects make an effort to systematically share key information like this, it should reduce uncertainty (and therefore volatility) and encourage more capital to flow into the crypto space. Investors should absolutely expect this level of transparency and should reward projects that prioritize showcasing their KPIs. At the same time, they should encourage and push for improvements in portfolio companies that aren’t yet prioritizing this.

Larry Fink, the CEO of BlackRock, recently pointed out in an earnings call that greater transparency and better analytics could significantly broaden investment in digital assets, similar to how it happened with markets like mortgages and high-yield bonds as they evolved. We’re already seeing strong companies like Artemis stepping up to provide blockchain data and analytics, setting new standards for digital finance. These providers will be crucial, just as platforms like Bloomberg and S&P’s Capital IQ are indispensable in traditional markets. However, it’s also on each and every digital asset project to do their part in enhancing data availability for investors. As the crypto market matures in terms of transparency and analytics—just as many emerging markets have done before it—the potential for investment in this space should grow substantially.