3-Footprint August Monthly Report Will September bring the next breakout point for crypto?
Written by [email protected]
Date: 2021/09/09 Since our July 2021 Report, the market gradually recovered and the DeFi market got infused with more products, funding and users in August, with the emergence of new players stirring excitement. The token incentive policy for liquidity mining was launched, and the total value locked in each blockchain’s DeFi protocol also rebounded rapidly, setting new historical records again in most blockchains.
Next, the data indicators in Footprint's August monthly report August 2021 Report will be used as a starting point to review the overall situation of the DeFi market and predict what will happen in September.
一、Analysis from the data indicators of each blockchains
TVLs on multiple chains trending upward, Solana and Avalanche emerging blockchains growing rapidly
According to data provided by Footprint Analytics, the TVL of multi-chains in August was $162.8 billion, with a 32% MoM growth rate. Among them, Ethereum occupied the top spot with $126 billion, with a 30% MoM growth and 77% of the market share. Importantly, the hard fork upgrade of Ethereum EIP-1559 also introduced a destruction mechanism, marking an extremely important protocol change in the history of Ethereum. As of August 31, the EIP-1559 adoption rate accounted for nearly 50% of all ETH transactions and the TVL of Binance Smart Chain (hereinafter referred as “BSC”) increased by 27% MoM to $19 billion, a slow increase in terms of the overall trend.
Solana and Avalanche
As of August 31, Solana and Avalanche entered a solid market with a total of over $5 billion in locked-in capital, growing approximately 200% and 900% MoM. The Solana ecosystem's native cryptocurrency, SOL, hit an all-time high, climbing from $36 on July 31 to $107 on August 31, up 197.2% MoM, while the Avalanche token, AVAX, which peaked at $56 since its release in February, set a new record high of $58 on August 24, up 427.3% MoM from July 24. The increase was 427.3% compared to July 24.
However, with the rapid development of emerging blockchains such as Solana and Avalanche, DEX on each Blockchains is indispensable as an important part of DeFi, making the entire DeFi space more competitive.
Lending, asset management, and machine gun pool platforms had varying degrees of growth in August
The overall contribution of the Top 5 Ethereum platforms are all trending up from July, namely Aave ($12.19 billion, +21.9% MoM), Curve ($12.13 billion, 30.3% MoM), InstaDApp ($12.1 billion, +30.8% MoM), Compound ($1.17 billion, +30.5% MoM), and WBTC ($970 million, +19.8% MoM). Among them, it is worth mentioning how WBTC squeezed into the Top 5 platforms for tool chain among many projects, squeezing out the original MakerDAO, which ranked 4th in July, from the Top 5 position. WBTC implements the first mapped token model of bitcoin asset bridge, whose operation model is very similar to stablecoin, and also uses centralized escrow operation to lock bitcoin from the bitcoin network as a reserve.
WBTC is the first bitcoin asset bridge that uses a centralized escrow operation that locks bitcoin in the bitcoin network as a reserve, and issues 1:1 convertible ERC20 tokens on ETH for users to hold exposure and enable related transactions.
The top 5 platforms of BSC have risen and fallen, among them the biggest platform for BSC in the Dex class is PancakeSwap ($6.54 billion, -40.2% MoM). While the recent participation of Phala Network in the PancakeSwap syrup pool that provides liquidity mining has not brought a boost to BSC's TVl. Maybe it has not caught the attention of major investors or other reasons worth your thinking. Then, from the growth rate, the increase change is larger for Tranchess, whose TVL in August exceeded 1.26 billion, a MoM growth rate is 950%, The rapid growth can be attributed to the fact it can dismantle Queen, one of the tokens on its ecosystem, into two different risk-return sub-fund products. This allows it to achieve an efficient and open chain asset management to meet the needs of investors with different risk preferences. Tranchess, being in the initial growth rather than explosion period, should be expected to have a promising future.
二、Changes in indicators for different types of DeFi market
The three main types of Dexes, Lending and Yield have accounted for 45.2% of the DeFi market.
The following is an analysis of TVL, Market Share and other indicators for each of the three types of Dex, Lending and Yield
1、Dexes
Curve continues to play decentralized exchange role as Balancer overtakes Uniswap V3 in fifth place
The TVL of Dex category platforms slowly rose in August. Curve (+33.1% MoM) saw the highest increase in the head Dex category and has been occupying the lead position over PancakeSwap (+19.7% MoM), Uniswap V2 (+9.1% MoM), SushiSwap (+28.5% MoM), and Balancer (+16.9% MoM). In August, Balancer overtook Uniswap V3 in fifth place. The principle of Balancer's initial token offering is similar to that of Uniswap, creating a Liquidity Bootstrapping Pool, which improves the efficiency of the project's capital, and the price pressure formed by the adjustment of the ratio of assets in the trading pool, and the price increase formed by participants' purchasing behavior. The price pressure formed by the adjustment of the ratio of assets in the pool and the upward price momentum formed by the purchasing behavior of participants jointly determine the price of the token.
Uniswap still holds the top spot in market capitalization in the Dex category, but the highest gainer is PancakeSwap
From the data provided by Footprint Analytics, the highest market cap increase for Dex-like platform tokens is PancakeSwap, with a market cap of $4.9 billion, up 49.4% MoM.
Since this month the decentralized exchange Uniswap surpassed Coinbase, the largest centralized exchange in the US, for the first time in terms of trading volume. This is all thanks to the token incentive of an emerging project, Sushiswap, which provides liquidity to its users. The subsequent liquidity of Sushiswap could grab a large number of customers and increase its market cap. The future is promising.
2、Lending
Aave's market share in the lending category decreased slightly as Compound's total TVL exceeded $10 billion again since May of this year
From the data provided by Footprint Analytics, Aave's TVL in August was as high as $14.27 billion, up 19.2% MoM, accounting for 40% of the market share, a slight decrease of 2% market share relative to July, but it did not affect its leading position in the lending platform. Compound's TVL in August again exceeded $11.68 billion, up 30.5% MoM, affected by the TVL impacting its coin price, slowly rebounding to $515. The higher growth rate also allowed Compound's market share to remain level relative to July, accounting for 33% of the market share. MakerDao’s market share has shrunk slightly.
Aave's deposit volume has surpassed May levels, Compound's deposits up 13.33% MoM
From the data provided by Footprint Analytics, the deposit balance of the head lending category platform was $43 billion at the end of August, up 16.2% MoM.
The lending market did not continue to grow rapidly, but also gradually recovered to the highest deposited volume of $47 billion in May. As the head of the current lending category, Aave's August Deposit volume has reached a record high of $19 billion, up 18.8% MoM, having surpassed May's highest Deposit volume of $15 billion. According to reports, Aave's e-money institution license (EMI), applied for from the UK Financial Services Authority, allows Aave users to buy Aave through fiat currency. This could allow it to emerge in the mortgage lending market in September.
Compound, with a deposit volume of $17 billion, went up 13.3% MoM. Compound's deposit volume grew insignificantly in August, but it is still an attractive market for borrowers.
On the other hand, borrowing volume in MakerDAO is still growing due to the demand for DAI in decentralized applications, and deposit volume remains in the range of $6-7 billion.
The head of the three major lending class platforms tend to balance the external lending balance
The market share of lending balances held by the three major platforms in August tended to balance each other out. It is clear that MakerDAO has the highest capital utilization among the three, 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.
Compound regains #2 spot for market cap in the lending category
The market cap of the top five lending class platforms at the end of August was $8.1 billion, down 16.9% from the previous month. The strongest platform was Aave, which broke through again with a market cap of $5.1 billion, up 20.7% from the previous month, the largest increase in the lending class. Compound returned to 2nd place in the lending category, with a market cap of $2.4 billion, up 7.7% from July, an insignificant increase, but pushing MakerDAO, which was in 2nd place last month, out of the Top 5.
The winner of the fastest growth in August is TRU, the token of TrueFi, gaining a MoM growth over 270% and tripling its market cap compared to previous month. The reason is the innovation of TrueFi that introduces the credit auditing mechanism of borrowers, which has caused a significant increase of its outstanding loan amount since its launch in May. In the future, according to TrueFi’s official report, it will expand the selection of lending assets to major ERC-20 tokens.
3、Yield
Machine gun pool class platforms in August have different degrees of increase, momentum is highest in Tranchess
From the data provided by Footprint Analytics, as of August 31, the head machine gun pool platform TVL was $17.78 billion, up 47.5% MoM, two times more than the lending market MoM growth rate, of which Convex Finance ($7.24 billion, +59.2% MoM), occupied the leading position of the yield category platform. Momentum is highest in Tranchess ($1.26 billion, +950% MoM), the reasons for which are mentioned in the analysis of the BSC chain in this paper. Autofarm ($3.13 billion, +25.9% MoM), saw its TVL reach $3.1 billion since its launch in early June.
PEAKDEFI grows 271.45% in August with strong momentum
The market value of PEAKDEFI is $300 million, up 271.45% from the previous month, and it overtook ApeSwap Finance's market value of $250 million on August 25, coming close to Illuvium's market value at the end of August. Yearn Finance's market cap has improved somewhat compared to July, with a market cap of $1.37 billion, a 13.35% increase from the previous month, placing it at the top of the machine gun pool category.
From the data provided by Footprint Analytcis above, DeFi has formed a trend to expand from ethereum to other chains, solving the problems of ethereum to varying degrees, while providing a healthy and complete environment for more users. Will there be more breakout points? In addition, most of the tokens fell in early September. What will be the impact on the future market? All that will be covered in our September report.
Review of various events in August:
Chain:
Avalanche Rush to Distribute Over $180 Million in DeFi Awards
Avalanche Adds SushiSwap to Liquidity Mining Program Avalanche Rush for a Total Reward of $15 Million
Total lock-up volume on the OEC chain surpasses $2 billion
Poly Network attacker buys Crypto Punk 3100 for 42,000 ETH
All funds stolen in Poly Network attack have been returned
Total Avalanche lock-ups reached $2.01 billion, with inflows of $1 billion in the three-day period from 22 to 25
Polygon's First Global Hackathon to Kick Off at HackerLink on August 30 with $100,000 in Total Prizes
Celo also announced in August the launch of its $100+ million "DeFi for the People" project with Aave and Curve, among others, to enable the use of DeFi on mobile
Stable Coins:
Uniswap, Curve holdings of stable coins have reached centralized exchange levels
Solana overtakes USD Coin in 8th place by market cap
Tether Issues 1 Billion Additional USDTs on Wavefield Network
Trading volume:
DEX trading volume for the month was $72.54 billion, down 15.4% MoM
DeFi lockups top $157 billion, a record high
Gas fee
EthHub Co-Founder: Once EIP-1559 is implemented, every DEX transaction on Layer 1 must pay for gas in ETH
Ether developer trent: users try the new EIP-1559 function and other 5 major reasons for the high price of gas
Ethernet Core Developer: EIP-1559 Reduces ETH's Annual Inflation Rate from 4.2% to 2.6%
EIP-1559 adoption has accounted for nearly 50% of all Ether transactions
NFT：
NFT trading marketplace OpenSea reaches $547 million in cumulative volume in August, up 68% from July
Axie Infinity's agreement revenue in the past 30 days exceeded RMB 1 billion, 7 times the combined total of #2-10
CryptoPunk's average trading price rose 68.2% in the past week, with total trading volume exceeding $120 million
OpenSea, the NFT marketplace, approached $100 million in trading volume over the weekend
Lending
DeFi Lending Agreement Aave V2 Lockup Tops $11 Billion, Hits Record High
Total Maker borrowings top $6 billion, a record high
Dex
Uniswap V3 Introduces Full Range of Mobility Capabilities to Emulate V2
DEX July trading volume at $56 billion, 65% from Uniswap
O3 Swap relaunches USDC cross-chain pool and announces NFT rewards for backers
Ethereum Gas
As of the completion of the Ether London hard fork upgrade, 3,200 Ether were burned in 12 hours
Total value of ETH destroyed by Ether hit $400 million, destruction volume exceeds 126,000 pieces
About Footprint Analytics
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