DeFi Weekly Report | Week 38, 2021
A bird's eye view of the money flows across blockchains and within each DeFi building block.
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On-chain Metrics
Total Addresses
Polygon is 14.6 million addresses away from surpassing Binance Smart Chain, which is highly likely in the next 1-2 weeks, given its growth rate at 12 million addresses per week, as witnessed last week.
New Addresses
Meanwhile, the number of Binance Smart Chain and Ethereum addresses experienced a decline. Specifically:
Binance Smart Chain: 172,079 (-5.51%)
Ethereum: 99,156 (-9.44%)
Polygon: 1,845,341 (+30.78%)
Daily Active Addresses
Binance Smart Chain active daily addresses rose beyond the highest peak, with a number of 1.26 daily active addresses. Meanwhile, growth has stunted for Ethereum and Polygon, which were moving sideways in the ranges of 500,000 and 200,000-220,000 respectively.
Daily Transactions
The volume of daily transactions on Binance Smart Chain exceeded that of Polygon, reaching 6.47 transactions per day. Ethereum, on the other hand, slowed down at 1.2 million transactions per day.
Layer 2
Layer 2: Total Addresses
Growth ceased for Arbitrum and Optimism after their number of total addresses experienced periods of massive growth spurts. Specifically:
Arbitrum: 164,938 (+21.13%)
Optimism: 125,656 (+36.12%)
Layer 2: Daily Transactions
Arbitrum daily transactions dropped significantly as soon as it peaked at an all-time high of 267,000. Similarly, Optimism was on a downward trend. It shows that Layer 2 solutions have only managed to attract attention in the beginning, yet lack stability.
Layer 2: Total Value Locked
Total value locked of Optimism and Arbitrum showed positive growth, in which, Arbitrum saw an upsurge from the beginning of September with its total value locked rising to 2.2 billion, while that of Optimism was recorded at only 231 million.
Decentralized Finance
Total Value Locked
Total Value Locked rose back to 150 billion dollars, manifesting a minor decrease of 5.96%, as compared to last week.
Total Value Locked of Solana continued to show a downward trend after reaching its all-time high. Terra, by contrast, recovered from a declining market last week. Avalanche rose significantly, reaching 3.2 billion dollars.
Total Value Locked by Category
Ethereum
The 40-billion-dollars lending sector continues to be the top sector, with regards to TVL. DEX came second with 30 billion dollars in TVL. Derivatives on the Ethereum chain, however, dropped by 14.98% from the previous week, reaching 7.31 billion dollars.
Binance Smart Chain
On the Binance Smart Chain, DEX attracts the largest majority of the cash flow, estimated at 13.8 billion dollars. Nonetheless, a downward trend can be witnessed, starting from late August. On the contrary, the Lending sector showed recovery signs after experiencing a downward trend from early September. The growth Derivatives sector, driven largely by Tranchess, was positive again.
Solana
Although expressing a downward trend, the DEX sector of Solana maintained the highest total value locked of 5.7 billion dollars, followed by the Assets sector with a TVL of 2.37 billion (decreased by 17.33%). Meanwhile, the Lending sector was on the rise again, reaching 800 million dollars, an indication of exponential growth that is bound to happen anytime.
Avalanche
The Lending sector grew steadily, yet slower and weaker than that of DEX, given that within a week, DEX has surpassed Lending to become the more appealing sector on Avalanche, with its total value estimated at 1.4 billion dollars.
Terra
Anchor is still leading in terms of TVL on Terra, followed by Lido. Interestingly, Mirror is flattening. This shows that the attraction of mAssets is fading, signifying the demand for a larger number of protocols built on top of Mirror.
A Closer Look in DeFi
Decentralized Exchange
Overall, DEX liquidity of various chains showed a decreasing growth last week. Avalanche DEX was the only to manifest fast growth, with its figures surpassing those of Terra. At 1.4 billion dollars in TVL, Avalanche DEX is likely to catch up with Solana DEX (whose TVL is estimated at 5.7 billion dollars) soon.
A closer look revealed that Avalanche DEX was dominated by Trader Joe, which accounted for 71.88% (approximately 1.03 billion dollars) of total value.
DEX's Liquidity by Protocol
Curve maintains its momentum as a leading protocol with 13 billion dollars in liquidity. Pancakeswap came right behind, but expressed a discernible downward trend. Trader Joe was closing on Terraswap on Terra and can surpass Raydium in the next 1-2 weeks
DEX Weekly Trading Volume
The volume of transactions on DEX this week was as high as the previous week, with little changes. The total volume is 23.56 billion dollars, with Uniswap and Pancakeswap accounting for the majority:
Uniswap:$10,640,995,273 (+1.66%)
Pancakeswap: $5,257,709,510 (+4.73%)
Lending Landscape
Lending Value Locked by Chain
The Lending sector on Ethereum is still leading, even though it is decreasing.
Lending Value Locked by Protocol
Lending on Solana is increasing, closing in on Lending on Avalanche. Meanwhile, Lending Terra is increasing, awaiting an opportunity to overtake Lending on BSC, which has been showing a downward trend.
Outstanding Loans
Overall, most lending protocols witnessed a drop in their outstanding liabilities as a result of a sudden decrease in the market last week. Meanwhile, Aave’s outstanding liabilities was still above 8.8 billion dollars (-2.62%), and that of Compound was above 8.6 billion dollars (-3.05%)
Derivatives (Ethereum)
The amount of perpetual swap was increasing fast beyond its all-time high at 2.66 billion dollar. It can be observed that dYdX L2 created 93.88% of the total transaction volume, which was approximately 1.7 billion dollars. This figure is 15.35 times the total volume of Perpetual Protocol.
It is noteworthy that at the moment, dYdX is offering incentives for market makers and traders, thus increasing the transaction volume. The same scenario can be said for Perpetual Protocol with its transaction mining rewards program.
Non-Fungible Tokens
Highlight: Opensea Growth
After reaching an all-time high in terms of transaction volume and DAU in late August, the volume of Opensea has decreased by ⅓, while the number of DAU did not shrink as fast. This shows that NFTs are still appealing to the retail industry, even though on-chain activities created little impact.
Fundraising Spotlight
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