Footprint August Monthly Report - DeFi market is blooming in many places, will September usher in the next outbreak point?

Written by: [email protected]

Date: 2021/09/09

The market gradually recovered in July, and the DeFi market in August made a qualitative leap in products, funds and user scale. The emergence of new players in the DeFi market has caused another upsurge. The token incentive policy for liquidity mining has been launched, and the total value locked in the DeFi protocols of various public chains has also rebounded rapidly, and most public chains have refreshed historical records again. Next, we will review the overall situation of the DeFi market based on the data indicators of the Footprint August 2021 Report and estimate the trends of various public chains in September.

1. Analyze the data indicators of each public chain

Market Share for TVL in Multi Chains

Data source: Footprint Analytics

Changes in TVL ratio of different chains

Data source: Footprint Analytics

Prices of different public chain tokens

Data source: Footprint Analytics

TVL of multiple chains is on the rise, and Solana and Avalanche emerging public chains are developing rapidly

According to data provided by Footprint, the TVL of multiple chains in August was 162.8 billion US dollars, a month-on-month growth rate of 32%. Among them, Ethereum Chain ranked first with 126 billion US dollars, a month-on-month growth rate of 30%, accounting for 77% of the market share, and continued to maintain its unshakable position. Importantly, the hard fork upgrade of Ethereum Chain EIP-1559 introduced a destruction mechanism, marking an extremely important protocol change in the history of Ethereum. As of August 31, the adoption rate of EIP-1559 has accounted for nearly 50% of all Ethereum transactions; and BSC TVL increased by 27% month-on-month to 19 billion US dollars. From the overall trend, the increase is slow and it remains at a relatively stable level.

After years of continuous development, the public chains that finally came out are Solana Chain and Avalanche Chain. As of August 31, Solana and Avalanche have entered a stable market with a total of more than $5 billion in locked funds, with a month-on-month growth rate of about 200% and 900%. The native cryptocurrency SOL of the Solana ecosystem hit a record high, climbing from $36 on July 31 to $107 on August 31, a month-on-month increase of 197.2%; and the highest price of Avalanche token AVAX since its release in February this year is $56. On August 24, the token AVAX once again set a new high record of $58, a month-on-month increase of 427.3% on July 24.

However, with the rapid development of emerging public chains such as Solana and Avalanche, DEX on each public chain is indispensable as an important part of DeFi, making the entire DeFi field more competitive.

In addition, we conducted further cross-chain analysis on Ethereum Chain and Binance Smart Chain, which are ranked first and second by TVL.

TVL changes of top platforms on Ethereum and Binance Smart Chain

Data source: Footprint Analytics

Lending, asset management, and smart pool platforms had different increases in August.

The overall contribution of the top 5 Ethereum platforms has increased compared to July, including Aave (US$12.19 billion, +21.9% month-on-month), Curve (US$12.13 billion, +30.3% month-on-month), InstaDApp (US$12.1 billion, +30.8% month-on-month), Compound (US$1.17 billion, +30.5% month-on-month), and WBTC (US$970 million, +19.8% month-on-month). It is worth mentioning that how did WBTC squeeze into the top 5 platforms of Ethereum among many projects and squeeze MakerDAO, which was ranked 4th in July, out of the top 5? WBTC realizes the first Bitcoin asset bridge under the mapping token model. Its operating model is very similar to that of stablecoins. It also uses centralized custody operations to lock Bitcoin on the Bitcoin network as reserves and issue ERC20 tokens WBTC that can be exchanged 1:1 on Ethereum, so that users can hold Bitcoin risk exposure on the Ethereum network and realize related transactions.

The growth of the top 5 Binance Smart Chain platforms has increased and decreased. Among them, the largest platform for Binance Smart Chain is Dex-type PancakeSwap (6.54 billion US dollars, -40.2% month-on-month). Phala Network joined the PancakeSwap syrup pool and started liquidity mining. The total TVL did not increase but decreased. This is worth your consideration. From the growth rate point of view, the one with the largest increase is Transess. In August, the TVL has exceeded 1.26 billion, with a month-on-month growth rate of 950%. Why can Transess grow so fast in just one month? The reason is that it can disassemble Queen into two sub-fund products with different risk returns, thereby realizing a more complex but efficient and open on-chain asset management method to meet the needs of investors with different risk preferences and achieve complementarity. Transess is still in its initial growth stage and has not yet reached the outbreak period. It is promising in the future.

2. Changes in different types of indicators in the DeFi market

Changes in TVL ratios of different types

Data source: Footprint Analytics

The three major types of DeFi, Dexes, Lending and Yield, account for 45.2% of the DeFi market.

The following is an analysis of TVL, Market Share and other indicators of the three major types of Dex, Lending and Yield.

1. Dexes

Changes in TVL share of top Dex platforms

Data source: Footprint Analytics

Curve continues to play the role of a decentralized exchange, and Balancer surpasses Uniswap V3 to rank fifth

The TVL of Dex platforms rose slowly in August, with Curve (+33.1% month-on-month) being the top Dex platform with the highest increase and always occupying the leading position among Dex platforms, PancakeSwap (+19.7% month-on-month), Uniswap V2 (+9.1% month-on-month), SushiSwap (+28.5% month-on-month), and Balancer (+16.9% month-on-month). In August, Balancer surpassed Uniswap V3 and ranked fifth. The principle of Balancer's initial token sale is similar to that of Uniswap. It created the Liquidity Bootstrapping Pool, which improved the capital efficiency of the project party. The price pressure formed by the adjustment of the proportion of each asset in the trading pool and the price upward momentum formed by the purchasing behavior of participants jointly determined the token's issuance price. Compared with the mechanism of Uniswap, Balancer provides a more balanced price discovery mechanism.

Market capitalization changes of top decentralized exchanges (Dex)

Data source: Footprint Analytics

Uniswap still ranks first in the market value of Dex platforms, but PancakeSwap has the highest increase

According to the data provided by Footprint, the Dex platform with the highest increase in token market value is PancakeSwap, with a market value of $4.9 billion, a month-on-month increase of 49.4%, ranking second. It is still three times away from the market value of $15.1 billion of Uniswap, which ranks first. Can Sushiswap, which ranks fourth, surpass Uniswap in the near future? Because this month, the transaction volume of the decentralized exchange Uniswap surpassed Coinbase, the largest centralized exchange in the United States, for the first time. All this was done under the token incentive of an emerging project Sushiswap, which provided liquidity to users. Then, SushiSwap, which has better liquidity in the future, may grab a large number of customers, and its market value increase is expected in the future.

2. Lending

Changes in TVL share of top lending platforms

Data source: Footprint Analytics

Changes in TVL share of top lending platforms

Data source: Footprint Analytics

Aave's market share in lending platforms has slightly decreased, and Compound's total TVL has exceeded 10 billion again since May this year

According to the data provided by Footprint, Aave's TVL in August was as high as 14.27 billion US dollars, a month-on-month increase of 19.2%, accounting for 40% of the market share. Compared with July, its market share decreased slightly by 2%, but it did not affect its leading position in lending platforms. Compound's TVL in August once again exceeded 11.68 billion US dollars, a month-on-month increase of 30.5%. Affected by TVL, the coin price is also slowly recovering to 515 US dollars. The higher growth rate only allows Compound's market share to maintain a level relative to July, accounting for 33% of the market share; and MakerDao, judging from the changes in market share this year, has been shrinking or even maintaining.

Changes in deposit balances on leading lending platforms

Data source: Footprint Analytics

Aave's deposit volume has exceeded the level in May, and Compound's deposit volume has increased by 13.33% month-on-month.

According to the data provided by Footprint, the deposit balance of the top lending platforms at the end of August was 43 billion US dollars, a month-on-month increase of 16.2%. The lending market did not continue to grow rapidly, but it gradually recovered to the highest deposit of 47 billion US dollars in May. As the current leader of lending platforms, Aave's deposit volume in August has reached 19 billion US dollars, a record high, a month-on-month increase of 18.8%, and has surpassed the highest deposit volume of 15 billion US dollars in May. According to reports, Aave has applied for an electronic money institution license from the UK Financial Services Authority. Aave users can use legal currency to purchase stablecoins and other assets in the Aave ecosystem. Will it be the next dark horse in the mortgage lending market in September? Secondly, Compound, the deposit volume is 17 billion US dollars, a month-on-month increase of 13.3%; Compound's deposit volume did not increase significantly in August, but it is still an attractive market for borrowers.

On the other hand, due to the demand for DAI in decentralized applications, the amount of borrowing in MakerDAO is still growing, and the deposit amount remains in the range of 6-7 billion US dollars.

Changes in loan balances of top lending platforms (Outstanding)

Data source: Footprint Analytics

The outstanding loan balances of the top three lending platforms are becoming more balanced

The market share of loan balances held by the three major platforms in August tended to be balanced, with little change from the market share of loan balances in July. It can be seen that MakerDAO has the highest capital utilization rate among the three platforms, and the funds deposited by borrowers are basically used for lending. Maker has proven itself to be one of the most powerful stablecoins and lending markets in DeFi.

Market value changes of top lending tokens

Data source: Footprint Analytics

Compound returns to second place in Lending market capitalization

At the end of August, the market value of the top five Lending platforms was 8.1 billion US dollars, a decrease of 16.9% from the previous month. The strongest one was Aave, whose market value once again exceeded 5.1 billion US dollars, a month-on-month increase of 20.7%, making it the platform with the largest increase in the Lending category. Compound has returned to the second place in the Lending category with a market value of 2.4 billion US dollars, a month-on-month increase of 7.7% from July. The increase is not obvious, but it squeezed MakerDAO, which ranked second last month, out of the top 5. It should be said that Token TRU, which has the largest increase this month, has increased by 276.6% month-on-month, and its market value has doubled several times compared with last month. The rise of TrueFi is undoubtedly due to the introduction of a credit review mechanism for borrowers. Since May, the amount of lending on TrueFi has increased significantly. In the future, TrueFi will also expand lending assets so that most ERC20 assets can be used as lending assets to generate lending pools.

3. Yield

Yield Aggregator TVL Changes

Data source: Footprint Analytics

Smart pool platforms had different increases in August, and Tranchess had the strongest momentum

According to the data provided by Footprint, as of August 31, the TVL of the leading machine gun pool platforms was 17.78 billion US dollars, a month-on-month increase of 47.5%, which is twice the month-on-month growth rate of the lending market. Among them, Convex Finan (7.24 billion US dollars, a month-on-month increase of 59.2%) occupies the leading position in the Yield platform; the other one with the largest increase and the most "momentum" is Tranchess (1.26 billion US dollars, a month-on-month increase of 950%), the reason for which is mentioned in the analysis of the BSC chain in this article; Autofarm (3.13 billion US dollars, a month-on-month increase of 25.9%), from its launch in early June to August, its TVL has reached 3.1 billion US dollars, with a rapid development trend, ranking third among the Yield platforms.

Changes in the market value of Yield Aggregator tokens

Data source: Footprint Analytics

PEAKDEFI grew 271.45% in August, showing strong momentum

PEAKDEFI performed relatively well in August, with a market value of 300 million US dollars, a month-on-month increase of 271.45%. On August 25, it had surpassed ApeSwap Finance's market value of 250 million. At the end of August, its market value was close to Illuvium. Will it be able to surpass Alpha Finance in a short period of time in September? Stay tuned. Yearn Finance's market value has improved somewhat compared to July, with a market value of 1.37 billion US dollars, a month-on-month increase of 13.35%, ranking first among machine gun pool platforms.

From the data provided by the above Footprint, DeFi has already formed a trend of expanding from Ethereum to other chains, solving Ethereum's problems to varying degrees, while providing a healthy and complete environment for more users. New players emerged in August, and we look forward to the development of various public chains in September. Will there be more amazing "explosion points"?

In addition, most of the tokens fell in early September. What impact will it have on the future market? Let us look forward to the September report.

Review of various events in August:

1. Chain:

a. Avalanche Rush will issue over $180 million in DeFi rewards

b. Avalanche includes SushiSwap in its liquidity mining program Avalanche Rush, with a total reward of $15 million

c. The total locked amount on the OEC chain exceeds 2 billion US dollars

d. Poly Network attacker purchased Crypto Punk 3100 for 42,000 ETH

e. All stolen funds from the Poly Network attack have been returned

f. Avalanche's total locked-in amount reached 2.01 billion US dollars, with an inflow of 1 billion US dollars in three days from the 22nd to the 25th

g. Polygon's first global hackathon will open on HackerLink on August 30, with a total prize of $100,000

h. Celo also announced in August that it would launch a "DeFi for the People" project with Aave and Curve, with a total investment of over $100 million, aiming to enable the use of DeFi on mobile devices.

2. Stablecoins:

a. The proportion of stablecoins held by Uniswap and Curve has reached the level of centralized exchanges

b. Solana’s market value surpasses USD Coin and ranks eighth

c. Tether issues 1 billion USDT on the TRON network

3. Trading volume:

a. The monthly DEX trading volume was US$72.54 billion, a decrease of 15.4% from the previous month

b. DeFi locked-in volume exceeds 157 billion US dollars, setting a new record high

4. Gas fee

a. EthHub co-founder: Once EIP-1559 is implemented, every DEX transaction on Layer 1 will have to pay gas fees in ETH

b. Ethereum developer trent: 5 reasons for high gas prices, including users trying out new EIP-1559 features

c. Ethereum core developers: EIP-1559 reduces ETH’s annual inflation rate from 4.2% to 2.6%

d. EIP-1559 adoption accounts for nearly 50% of all Ethereum transactions

5. NFT:

a. NFT trading market OpenSea’s cumulative trading volume in August reached US$547 million, a 68% increase from July

b. Axie Infinity’s protocol revenue in the past 30 days exceeded RMB 1 billion, which is 7 times the total of the 2nd to 10th place.

c. CryptoPunk’s average trading price rose 68.2% in the past week, with a total trading volume of over $120 million

d. NFT market OpenSea’s trading volume approached $100 million last weekend

6. Lending

a. DeFi lending protocol Aave V2 locks up over $11 billion, setting a new record

b. Maker’s total borrowing volume exceeded $6 billion, setting a new record

7. Dex

a. Uniswap V3 launches full range of liquidity features that simulate V2

b. DEX transaction volume in July was $56 billion, 65% of which came from Uniswap

c. O3 Swap restarts USDC cross-chain pool and announces NFT rewards for supporters

8. Ethereum Gas

a. As of the completion of the Ethereum London hard fork upgrade, 3,200 Ethereums will be burned within 12 hours

b. The total value of ETH destroyed by Ethereum has dropped below $400 million, with more than 126,000 ETH destroyed

About Footprint

Footprint Analytics is a one-stop visual blockchain data analysis platform. Footprint helps solve the problem of on-chain data cleaning and integration, allowing users to enjoy a free blockchain data analysis experience. Providing more than a thousand tabulation templates and drag-and-drop drawing experience, anyone can create their own personalized data charts in 10 seconds, easily gain insight into on-chain data, and understand the stories behind the data.