Text | Carol Edited | Bi Tongtong Produced | PANews The massive sell-off by Chef Nomi, the founder of Sushiswap, caused a "Sushi Storm" over the weekend. Although FTX founder SBF "turned the tide" and took over control from Chef Nomi and restarted multi-signature voting to put Sushi under the control of the community, it remains to be seen whether the upcoming migration can proceed smoothly. Sushi achieved a good "cold start" through yield farming and grabbed a large amount of liquidity from Uniswap, but this piece of sushi is just a "delicious food on the plate" for big investors. Whether it can successfully take away the liquidity has become an important test in the Farming era. Over the past period of time, DEX has made rapid progress under the incentive of liquidity mining. According to PANews statistics, in August, the total amount of liquidity pools of Uniswap v2, Curve Finance, Balancer, Mooniswap and Kyber Network increased by 312%, which reflects the role of Farming in promoting AMM DEX. So, from the data, to what extent has Farming promoted the aggregation of AMM DEX liquidity and the increase in trading volume? After excluding the impact of ETH's rise and Sushiswap's drainage, what position does Uniswap, which does not launch an incentive plan, hold in the fierce competition in the past month? If the Farming plan is not launched, does AMM DEX have other ways to break through? Stablecoins and Farming tokens are the main trading assets on DEX According to CoinGecko data, as of September 1, the daily nominal trading volume of 46 DEX platforms was approximately US$1.129 billion, of which Uniswap accounted for 68.52% of the market share with a trading volume of over US$773 million. The second largest market share was the stablecoin trading platform Curve, with a daily nominal trading volume of approximately US$115 million, accounting for 10.23% of the DEX market. Other platforms with a daily nominal trading volume of more than US$10 million include 1inch, Balancer, 0x Protocol, Mooniswap, Kyber, Tokenlon, and Synthetix, all of which have a market share of more than 1%. The daily trading volume of these nine DEXs accounts for 97.38% of the entire DEX market. Among them, except for 0x Protocol which is an order book model and 1inch which is an aggregate exchange, the other seven are AMM DEXs. Compared with the DEX craze in the second half of last year, the recent growth of AMM DEX reflects the market’s choice of the direction of DEX development. Among the DEXs with large trading volumes last year [1], there were more order book DEXs than AMM DEXs, such as Etherflyer, Binance DEX, IDEX, DDEX, TronDEX, etc., while there were only Uniswap and Bancor as AMM DEXs. At that time, Uniswap’s daily trading volume was only US$750,000, far inferior to order book DEXs such as Etherflyer, Binance DEX, and IDEX. The prosperity of AMM DEX is inseparable from the development of other areas of DeFi, such as stablecoins and lending markets. Judging from the top three major trading pairs in the current DEX with high trading volume, stablecoins and DeFi concept coins are the main trading assets, such as USDT, USDC, YFI, SUSHI, BAL, AMPL, REN, etc. Moreover, the trading volume of these assets accounts for a high proportion. According to rough statistics, the total trading volume of the top three trading pairs in DEX accounts for an average of about 57.21% of the total daily trading volume of their exchanges. Among them, the trading volume of the top three trading pairs in Mooniswap, Curve, Uniswap v2, Balancer and 1inch accounts for less than 40%, with Mooniswap being the lowest at about 34.72%. The trading volume of the top three trading pairs in Tokenlon, Synthetix and Bancor accounts for more than 80%, with Tokenlon accounting for the highest at 94.83%. Trading volume increased significantly in August. In the era of farming, big investors eat "sushi" AMM DEX has achieved significant development in August. PAData further counted the trading volume of 5 AMM DEXs with high trading volume to observe how AMM DEX has developed in the past month. In order to eliminate the impact of ETH's rise on DEX trading volume, this article will use ETH as the statistical unit [2]. According to statistics, the trading volume of major AMM DEXs in August showed a significant increase. Uniswap v2, which has the largest coin-based trading volume, saw a cumulative increase of 379.04% in trading volume during August. However, this was largely affected by Sushiswap. If only the increase in coin-based trading volume before Sushiswap went online is counted, then Uniswap v2 only had an increase of about 50%, which is only slightly higher than Kyber and far lower than other AMM DEXs. Secondly, Curve’s coin-based trading volume also increased significantly in August. Since Curve is a stablecoin trading platform, it is not affected by the fluctuations of ETH. According to statistics in US dollars, its trading volume in August increased by 215.58%, showing an overall fluctuating upward trend. Mooniswap had the largest increase in coin-based trading volume in August, nearly doubling 100 times, from 318.09 ETH at the beginning of its launch (August 11) to 30,600 ETH, surpassing the established Kyber in one fell swoop. The surge in AMM DEX trading volume can only mean that the scale of funds in the DEX market has expanded. However, judging from the limited public data, the user scale of DEX has not expanded in the same proportion. According to DAppTotal's statistics on the number of users, the number of Uniswap v2 users only increased from 556 on August 1 to 759 on August 31, an increase of only 37.05%. On the contrary, the number of Bancor users decreased from 630 on August 1 to 149 on August 31, a decrease of about 76.35%. In addition, judging from the changes in the number of transactions on the chain, this Farming not only brought a very limited number of new users to DEX, but the Farming bonus was also mainly obtained by large users. According to statistics, it can be clearly seen that during the period from the 28th to the 31st when SUSHI was listed, the daily month-on-month increase in Uniswap v2 transaction volume was significantly higher than the daily month-on-month increase in the number of transactions, which means a significant increase in the amount of a single transaction, and also indirectly reflects the current situation of large users "eating sushi". Optimizing trading models is a new way out in the "post-Farming" era In addition to providing trading platforms for DeFi tokens, many AMM DEXs have recently launched their own incentive programs aimed at providing higher returns to liquidity providers (LPs). This has prompted the funding pools of these DEXs to expand rapidly at a rate far higher than the growth rate of trading volume. According to statistics, as of August 31, the total liquidity of Uniswap v2, Curve, Balancer, Mooniswap and Kyber was approximately 7.431 million ETH[3], equivalent to US$3.241 billion. Among them, Uniswap v2 is currently the AMM DEX with the largest liquidity, with a currency-based liquidity of about 3.1305 million ETH, equivalent to $1.365 billion, accounting for about 42.13% of the total liquidity. As of September 3, the liquidity of Uniswap v2 has exceeded $2 billion, but according to statistics from SUSHIBOARD, about 70% of this liquidity comes from Sushiswap. If the impact of Sushiswap is corrected, the liquidity scale of Uniswap v2 may be lower than Curve and Balancer. Earlier in August, Curve[4] was once the platform with the largest liquidity, with a peak liquidity of US$1.391 billion, equivalent to 3.4749 million ETH. In terms of growth, Mooniswap is still the AMM DEX with the highest liquidity growth. In August, its currency-based liquidity scale expanded 337 times. The surge in Mooniswap's trading volume and liquidity confirms the saying "standing on the wind, even pigs can fly". 21 days after its launch, it easily surpassed various old DEXs and ranked sixth in the market. Although it has borrowed the east wind, Mooniswap did not issue incentive tokens. According to other public reports, its selling point is to keep most of the slippage income in the pool by maintaining virtual balances in different swap directions, increase the value obtained by liquidity providers, and claim that according to simulation experiments, this can bring liquidity providers 50% to 200% more income than Uniswap V2. Optimizing trading models may provide a feasible idea for breaking Farming. In addition to Mooniswap, Curve had the largest increase in liquidity in August. In terms of US dollars, its liquidity increased by 275.02% in the past month. The second largest was Uniswap v2. After excluding the impact of Sushiswap, its currency-based liquidity increased by about 185.16%. In addition, Balancer's currency-based liquidity also increased by 92.21%. Kyber, which was launched earlier, was at a disadvantage in this competition, and its currency-based liquidity actually decreased by 2.41%. It is also worth noting that stablecoins have become the main "seed" for AMM DEX liquidity mining. According to statistics, as of September 1, the maximum liquidity of stablecoins in the three major DEXs, Uniswap v2, Curve and Mooniswap, reached 1.247 billion US dollars, equivalent to about 38% of the total liquidity. Among them, USDT and USDC are the two most liquid stablecoins, reaching $470 million and $370 million respectively, equivalent to 5.5% and 25.38% of their respective total circulation. The high reserves of stablecoins once again demonstrate the demand of DeFi users to manage their finances in US dollars. [1] See PAData’s “DEX Breakout: Data on Asset Liquidity and User Base”. [2] [4] The trading volume and liquidity of the stablecoin trading platform Curve have nothing to do with the increase in ETH. For unified observation, there will be a certain error after conversion to ETH, but it will not affect the chart pattern or trend. The statistics for USD units will also be explained later. [3] For some platforms that do not directly provide currency-based liquidity data, currency-based liquidity is calculated based on the provided USD-based liquidity data and the coin price corrected by Coin Metrics.
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