Original title: Etherscan: The Master of Block Explorers
Author: Launchy
Compiled by: TechFlow
Etherscan is a tool that helps users browse the Ethereum blockchain, more commonly known as a blockchain explorer, with 80 million visits per month. Etherscan has always been one of the most popular and widely used tools in the cryptocurrency space.
With Etherscan, users can easily analyze block transactions on the Ethereum blockchain. Through this platform, everyone can enjoy one of the core principles of blockchain technology: transparency. From detectives investigating suspicious "Rug" behavior on the chain to traders monitoring large-scale capital flows, Etherscan provides us with the necessary tools to better understand what is happening behind the scenes of the block.
Etherscan has no tokens. Although it operates at the core of the crypto Web3.0 ecosystem, Etherscan is considered more like a "traditional SaaS business" and not exactly a localized blockchain application. It simply provides users with tools to better understand blockchain transactions.
Etherscan has become the blockchain explorer of choice since its founding in 2015. As of 2023, Etherscan has expanded to over 18 blockchains.
How does Etherscan make money?
Etherscan, like many other software companies, generates revenue by providing services. Although Etherscan also provides some B2B products, it is primarily a B2C business. However, advertising has become an important factor in Etherscan's revenue generation.
At a high level, Etherscan generates revenue from:
SaaS: Etherscan offers SaaS services that are primarily B2B, such as building a block explorer as a service (which they call EaaS).
API Plans: Etherscan offers API plans to access its data, ranging from free to $399 per month, with undisclosed enterprise pricing.
Advertisements: Etherscan has 5 types of advertisements. They are described in detail below.
On-chain services: We found that one of Etherscan’s products, BSCscan, provides delegation services, and Etherscan is developing other on-chain tools, including wallet-to-wallet messaging, token authorization revocation tools, and more.
Donate: This is simple. The platform allows users to donate to support its development and maintenance.
Let's do some revenue estimates.
Newsletter: $120,000 to $300,000 per year
If Etherscan had 1 million subscribers, they could charge anywhere between $20k-50k per newsletter, depending on the CPM. Since the newsletter is not “core” and we are not discussing open rates, we will assume a 50% discount on the price.
Etherscan can charge $10k-25k per newsletter (they publish a newsletter once a month). Overall, they can make $10k-25k per month from the newsletter.
Website advertising: $3.2 million to $8.64 million per year
There are four types of website ads, including homepage banner ads, banner ads, header text ads, and button ads.
Honestly, this revenue is very dependent on how Etherscan decides to monetize. As the examples below show, it depends on the industry sector, monetization method, and the state of the industry.
Estimating ad revenue based on website traffic is tricky because it varies widely based on industry, sector, and geography. For context, it can range from $0.10 to $50 per 1,000 views.
The super general formula is: monthly flow / 1000 * RPM.
RPMs can range from around $15 per 1,000 impressions to $100 for specific niches like real estate insurance. Let’s assume that the RPM for cryptocurrencies is between $30-50.
Using extremely rough estimates, I predict that commercializing Etherscan’s capabilities, as well as having 4 different ad slots and higher RPM rates for cryptocurrencies will bring:
80 million page views per month. According to Playwire, 10 million page views should net at least $25,000 per month. At this rate, Etherscan should net $200,000 per month.
8 million unique visitors per month. According to the above Quora source, 500,000 unique views in the gaming space would net $45,000 per month. At this rate, Etherscan should be netting $720,000 per month (assuming crypto and gaming have comparable RPMs).
API initiatives, on-chain services, and SaaS: $2.91 million to $12.55 million per year.
If we assume that Etherscan can convert the following percentage of unique visitors (8 million) into buyers at the lowest price ($199/month):
0.1% → 8,000 customers paying $199/month → $1.91M/year.
0.5% → 40,000 customers paying $199/month → $9.55M/year.
As for Etherscan’s Explorer-as-a-Service (EaaS), it’s more of a one-time deal (perhaps with some security deposit fees). Most of the on-chain services listed on the site, token delegation, and block scanning chat are still in beta.
Therefore, we estimate this would put annual revenue in the low seven-figure range ($1 million to $3 million).
Number of people and expenses
According to LinkedIn, Etherscan has 29 employees. LinkedIn breaks down the first 5 “departments” as follows:
Engineering - 12 people
Business Development - 8 people
Operations - 4 people
Community and social services - 3 people
Information Technology - 2 people
Let’s create a scenario to estimate how much Etherscan would have to spend on the 5 sectors above:
Engineering: In the $100k-$200k range, Etherscan would need to pay $1.2-$2.4 million per year.
Business Development: In the $80k to $120k range, Etherscan would need to pay $640k to $960k per year.
Operations: In the $70k to $100k range, Etherscan would need to pay $280k to $400k per year.
Community and social services: In the $60,000 to $90,000 range, Etherscan would need to pay $180,000 to $270,000 per year.
Information Technology: In the $100,000 to $150,000 range, Etherscan would cost $200,000 to $300,000 per year.
In total, Etherscan spends between $2.5 million and $4.33 million per year on the five departments mentioned above.
However, it is important to note that Etherscan is based in Malaysia - which would significantly reduce salary expenses. A more realistic assumption would be to cut annual headcount expenses in half, to $1.25 million to $2.15 million per year.
As always, this figure is a headline expense assessment only. It does not include other operating costs such as third-party vendors, office space, etc.
income
Our estimates yield the following results:
Etherscan revenue: $6.23 million to $21.49 million per year.
News Brief → $120,000 to $300,000 per year;
Website advertising → $3.2 million to $8.64 million per year;
API plans, on-chain services, and B2B SaaS → $2.91 million to $12.55 million per year
Etherscan’s expenses: $1.25 million to $4.33 million per year.
Our rough estimates are:
minimum gross profit of $1.9 million ($6.23 million-$4.33 million);
The highest gross profit was $20.24 million ($21.49 million - $1.25 million).
What's next?
For Etherscan, insight business is a very logical choice.
They own all the blockchain data and can launch products like Dune’s dashboard or Nansen’s wallet tokens. This seems like a way for Etherscan to expand verticals relatively easily without investing too many resources.
The fact that Etherscan isn’t capitalizing on this trend suggests that they are already very profitable in the space (raw blockchain data) and brand (website traffic/ad revenue) they have conquered.
Etherscan is in a good position. They are not based in the US and have not launched any tokens. As the blockchain ecosystem matures, let’s wait and see how the undisputed king of block explorers performs in the market.