💥 DeFi Quietly Doubled By Most Metrics in Q1
Hello Defiers! Here’s what we’re covering today,
Here’s how Cooper Turley sold an NFT-ed post for $6k to 3LAU
DeFi quietly doubled in the first quarter
Aave expands into the Polygon network
Filecoin rallying most among major tokens
and more :)
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📺 Podcast: "I Try to Tell People About DeFi; It Will Come Here and Completely Flatten You:" Jim Bianco
A new web3 media platform called Mirror offers a new way for journalists to monetize their work.
This past month, I set out to explore the NFT value-stack - leveraging Mirror to make the essay into an NFT. The post, titled “NFT Value Capture Equation” was broken down using a fractional token called $VALUE. I unbundled the NFT landscape and honed in on the curation layer to spotlight rising Creator DAOs like WHALE and FWB Pro.
$VALUE hit its crowdfund target of 2 ETH in under five minutes, and the NFT of the post sold for 3.33 ETH to 3LAU earlier this week. Here’s what I learned from my first NFT.
TLDR While searches for “NFTs” have outpaced those for “DeFi” by seven to one at the close of 2021’s first quarter, DeFi has quietly doubled or tripled by most key metrics.
TVL Deposits in Ethereum-based DeFi more than doubled to $37.7B from $16.6B at the start of the year, according to DeBank, besting 2020s Q4’s 90% increase from $8.3B.
It bears noting that Ether itself more than doubled in each of the last two quarters. As roughly $18.7B of ETH is locked in DeFi it’s fair to say that roughly half of Ethereum-based $37.4B TVL can be attributed to the asset’s Q1 appreciation. While this somewhat puts a damper on the explosive growth of TVL, ETH itself locked in DeFi protocols increased by roughly 28%, or 2M, to 9.7M according to DeFi Pulse.
BSC FACTOR Binance Smart Chain (BSC), while arguably not decentralized, had a breakout quarter with it’s TVL jumping more than 34 times to $8B by the quarter’s close. That’s more than “DeFi Summer,” where, using Q3 of 2020 as an approximation, Ethereum’s total TVL jumped by six times, to $8.4B according to DeBank.
DEX VOL Decentralized exchange (DEX) daily volume appears to have doubled in 2021’s Q1. The last day of sub $1B in DEX trades was Dec. 31 after which daily volume has never gone below that point. Daily DEX volume has averaged over $2B in Q1 2021 compared with sub $1B averages in Q4 of 2020 according to DeBank.
BSC FACTOR - AGAIN As with TVL, DEX volume has been bolstered by BSC’s rise. The chain had never facilitated more than $300K of trading prior to 2021, but now appears to be on track to average over $1B in volume after hitting a high of $1.9B on Mar. 24 before dropping back down slightly below the 10-figure mark.
Still, isolating volume for Ethereum also shows a doubling, with the chain hitting an all-time high of $4.5B on Feb. 22 before trading slowed slightly to average slightly below $2B during March.
Stablecoins Minted, Borrowing Volume, Defi Pulse Index, All Up By Multiples.
[CORRECTED ON 3RD PARAGRAPH TO REFLECT ETH TVL ACCURATE TVL]
TLDR Aave, DeFi’s third-largest protocol by assets in its smart contracts, will be expanding onto the Polygon network as it aims to improve scalability.
MULTI-MARKET APPROACH Consistently high gas fees, while indicative of Ethereum’s growing success and adoption, have the downside of pricing out smaller investors, Aave said in a March 31 blog post. In order to facilitate accessibility, Aave hopes to implement a “multi-market approach” to scalability solutions.
POLYGON NETWORK Polygon (formerly MATIC) is an interoperability blockchain scaling framework focused on ETH-compatible sidechains with nearly zero transaction fees. The Polygon network already hosts the popular NFT game Aavegotchi, the digital asset lending protocol EasyFi, and the decentralized exchange Quickswap.
TLDR Filecoin’s token is soaring by the most in all of crypto. FIL has jumped 168% to $231 in the last week, the most among the top 100 tokens listed on CoinGecko.
LATEST NEWS Fueling the rally are news including Grayscale’s Filecoin Trust launch on March 17 and Chainlink’s integration, which will allow Filecoin’s blockchain’s state to become easily accessible to other chains.
GRAIN OF SALT Only .03% of Filecoin’s max supply of 2 billion tokens are currently circulating. This leaves some room for skepticism about the token’s value as were all the tokens trading, the project’s market capitalization at this price would be $456B, more than double that of Ethereum.
TLDR Enjin has revealed more details about their NFT-focused blockchain, Efinity Network, which was announced earlier this month alongside their “high-speed bridge network” scaling solution, JumpNet.
POLKADOT Efinity Network will be built as a parachain (ie: an offshoot blockchain) on the Polkadot network. Enjin plans Efinity Network to be a cross-chain highway for NFTs, capable of supporting any NFT from any other blockchain, with the intent to offer lower fees and move NFTs away from environmentally inefficient proof-of-work blockchains.
“Governance weighted salaries where simply proposals set up by community members, where they proposed that contributor X should receive Y payment. These require active management and need monthly DAO votes / approvals. This doesn’t scale well.
To address the scaling and overhead problems, the yearn team built Coordinape, these are my favorite kind of products since they originate out of a personal need, but can be generalized to help any other organizations / DAO’s struggling with a similar problem.”
“Feeder Pools are liquidity pools that use a custom bonding curve optimised for 2 asset pools. fPools comprise two assets in equal proportion — 50% fAsset (feeder asset) and 50% mAsset and allow users to mint mAssets from any fAsset at the lowest possible cost. mAssets are used here as bridge assets and the default trading pair on mStable.
For liquidity providers, feeder pools offer a way to earn on your assets with zero impermanent loss (unless an underlying asset loses its peg). As a liquidity provider, you also passively earn yield from swap fees and Meta (MTA) rewards, which can be multiplied, or boosted by staking MTA.”
✊ Head to THEDEFIANT.IO for more DeFi news 📰
🧑💻 ✍️ Stories in this newsletter were written by Owen Fernau, Dan Kahan and Cooper Turley, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($10/mo, $100/yr). We will be raising the price to $15/month next week!