Review of DeFi in April: Real assets started to be mortgaged on the chain, and the issuance of TRON USDT exceeded Ethereum USDT for the first time

As crypto assets appreciate, various data in DeFi continue to improve. In addition to Ethereum, DeFi projects on other chains are also booming. Innovation in DeFi is becoming more and more difficult, but there are also many projects that have achieved extremes in certain directions, thus standing out and may change the existing way of interaction.

Project launch and update

As early as last year, MakerDAO stated that it would focus on real-world asset mortgage lending. On April 15, MakerDAO's first real-world financing execution proposal was passed, adding New Series 2 DROP as collateral, and then officially issued the first real-world asset loan. New Silver is a house renovation and resale loan on Centrifuge Tinlake. Investing in New Series 2 DROP tokens means financing real estate in the United States. MakerDAO cooperated with Centrifuge to realize the first DAI loan backed by real-world assets. This is also the first loan based on real-world assets in DeFi, which will become a milestone event in the integration of DeFi and reality.

In the decentralized lending market, because interest rates fluctuate with demand, it is not conducive to the large-scale influx of traditional assets. Pendle (formerly known as Benchmark), which is dedicated to the yield market, can solve this problem. It can separate the underlying assets from the income. The owner of the asset can sell its income rights within a fixed time, thereby locking in profits, and the buyer of the income rights has no liquidation risk. Lenders can lock in interest rates when interest rates are high, and borrowers can hedge interest rates when interest rates are low. In specific operations, you can use aToken in Aave and cToken in Compound to mint OT tokens representing ownership and XYT tokens representing future income. If you sell XYT tokens, it is equivalent to locking in future income; buying XYT tokens can obtain the income generated by the asset in Aave or Compound in the future, which is convenient for borrowers to hedge interest rate risks.

After six months of pre-mining, B.Protocol finally upgraded the points in the platform to the governance token BPRO through voting. B.Protocol wants to solve the gas war and uncertainty problems in the liquidation process. Its creator Yaron Velner was the CTO of Kyber Network and the co-designer of the WBTC protocol. B.Protocol will integrate the protocol into existing DeFi lending platforms, and has already completed the integration of MakerDAO and Compound. B.Protocol liquidators gain priority in the liquidation process by providing a buffer for user accounts when they are close to the liquidation price. Users of MakerDAO and Compound can complete loans in B.Protocol and obtain governance tokens over time, and part of the liquidator's income will also be distributed to users. The project was launched completely fairly. At the time of the initial token distribution, all BPRO tokens were distributed to users based on the proportion of points, and there was no pre-mining and VC allocation.

Recently, the discussion on "miner extractable value" in the Ethereum community has heated up again, and the high gas fee has seriously affected the participation of DeFi in Ethereum. The usage of the Ethereum network has skyrocketed, which includes many inefficient MEV extraction processes. The mutual bidding of arbitrageurs has also increased the gas fee, thus bringing negative externalities to Ethereum. Flashbots wants to solve this problem through a proof-of-concept project MEV-Geth. Miners can outsource the rights of the blocks in which transactions are packaged to third-party searchers through MEV-Geth, and searchers compete with each other by communicating the block space of transaction sorting preferences. Although MEV-Geth cannot reduce front-running and tailing transactions, it can reduce network congestion caused by robots.

CowSwap is also a type of decentralized exchange (DEX), but it is significantly different from existing DEXs and is known for its zero handling fees (Gas fees when authorization is required during actual use, basic fees for executing transactions, and protocol fees). Transactions submitted on CowSwap will first be matched in off-chain services. If there is a matching demand (Cow), the transaction will be completed directly. Because there are no market makers and no fees to be paid to liquidity providers, transactions in Cow will bring better prices. If there is no better price, the transaction will be executed in the best path in AMM. If the transaction is successfully matched directly off-chain, then CowSwap can also alleviate the troubles caused by MEV.

As the valuation of crypto assets rises overall, various data in DeFi continue to rise. According to CoinMarketCap, the total market value of cryptocurrencies rose by 15.8% in April and exceeded $2 trillion for the first time, reaching $2.12 trillion. The price of BTC (WBTC), which is widely used in DeFi, fell by 1.78%, ETH rose by 44.44%, and BNB rose by 105.92%.

Total locked amount

According to DeBank's statistics, the total locked-in amount on Ethereum, BSC, xDai, and Polygon chains increased from US$64.8 billion to US$108.6 billion in April, an increase of 67.6%. As of May 6, the total locked-in amount on these chains has risen to US$122.8 billion. If Heco's US$8.9 billion is added, the total locked-in amount in all DeFi protocols has exceeded US$130 billion.

Decentralized Exchanges

At the end of April, the daily trading volume of decentralized exchanges (DEX) was about $4 billion, compared with about $2.7 billion a month ago, an increase of 48%. Among DEXs on Ethereum, SushiSwap's locked volume is about half of Uniswap's, and its trading volume is about one-third of Uniswap's, and there is still a clear gap between the two. If DEXs on Ethereum are compared with other chains, PancakeSwap on BSC far exceeds Uniswap in terms of locked volume, 24-hour trading times, and active users, while the trading volumes of the two are comparable.

Decentralized lending

Total borrowing on decentralized lending platforms increased by 49.4% to $19.6 billion, with Compound still having the highest total borrowing volume, while Venus on BSC rose from third to second. Aave V2 had the largest increase in total borrowing volume, from $810 million to $3.64 billion, an increase of 355%. The increase in total borrowing on Aave V2 also accounted for 43.6% of the total increase in borrowing volume of all platforms counted in April, while the total borrowing volume of Aave V1 decreased slightly. Although Compound's total borrowing volume is increasing, its share has dropped from 42% to 38%.

Stablecoins

According to data on Messari, as of the end of April, the total market value of eight stablecoins, including USDT, USDC, BUSD, HUSD, TUSD, sUSD, PAX, and DAI, was $75.3 billion, compared to $61.8 billion a month ago, up 21.8% in a month. This month, the authorized issuance of USDT on Tron also exceeded that of ETH for the first time. According to data on Tether's official website, ERC20 USDT has been authorized to issue 25.9 billion, while Tron USDT has been authorized to issue 29 billion.

BTC anchored coins

The issuance of Bitcoin-pegged coins on Ethereum also exceeded 1% of the total BTC for the first time this month. As of the end of April, the total issuance of BTC-pegged coins on Ethereum was 216,728, an increase of 15.1% from a month ago. The issuance of BBTC increased significantly this month, from 2,900 to 9,900.

Decentralized Oracle

The number of decentralized oracle calls has not increased. According to DeBank data, by the end of April, ChainLink, as a professional oracle, was called about 10,000 times a day; Uniswap, because it has a large number of trading pairs and the largest trading volume among DEXs, was called about 3,700 times a day. These two accounted for 95% of the oracle calls.

Summarize

The various data in DeFi continue to improve, on the one hand due to the overall increase in the valuation of crypto assets, and on the other hand, more assets are pouring in. The total market value of crypto assets exceeded 2 trillion US dollars, MakerDAO issued the first loan based on real assets DAI, BTC anchored coins exceeded 1% of the total BTC for the first time, and Aave V2 also began to attract a lot of funds.

In addition to Ethereum, DeFi on other chains has also developed rapidly. PancakeSwap has surpassed Uniswap in terms of locked volume, 24-hour trading volume, and number of active users, and its trading volume is comparable to Uniswap. Venus's borrowing volume surpassed MakerDAO and jumped to second place. Tron USDT's issuance volume also exceeded ERC20 USDT for the first time.