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28 pictures to fully understand DeFi

Now that the DeFi market is not good, people are beginning to shake the prospects of DeFi. DeFi was so fast a while ago, now it’s time to calm down.

The following 28 pictures are used to briefly explain the side of DeFi. Most of the pictures are derived from TheBlock, DeFiPulse and Duneanalytics and cover the main parts of DeFi. These include the amount of locked assets, the total number of users, the number of users of different protocols, transaction fees, the transaction volume of BTC, DEX on Ethereum, stablecoins, lending, prediction markets, insurance, privacy, NFT, wallets, etc.

Of course, these data can’t reflect all of DeFi. However, from this aspect, we can see how fast DeFi has developed in the past three months, and its future is full of many possibilities.

1. Changes in the amount of locked assets

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According to the data in the above figure, the total amount of assets locked in DeFi has exceeded 10 billion U.S. dollars. Among them, payment, DEX, derivatives, lending and asset management have developed rapidly in the past three months, especially in the field of DEX and lending.

2.DeFi users approaching 500,000

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This graph shows us the growth in the number of addresses that have interacted with the DeFi protocol in the past few months. 5000 new addresses are added every day, which shows that new DeFi users are growing rapidly (even if some users use several addresses). At the same time, it can also be seen that DeFi is still in a very early stage, and the overall user scale is still small, even with the overall encrypted trading market. Compared to users, it is only about 1%. There is still a lot of room for expansion.

3. BTC circulating on Ethereum

At present, the total number of BTC circulating on Ethereum exceeds 127,000, accounting for 0.608% of the total BTC and valued at more than 1.3 billion U.S. dollars. Among them, wBTC occupies the vast majority of the market share and currently exceeds 70%.

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According to this trend, there will be more and more cross-chain assets in circulation. At present, BTC is mainly circulated on Ethereum. In the future, there will be more and more cross-chain assets circulating. Assets from different chains will circulate on different chains due to differences in income. Cross-chain DeFi will be an important field in the future.

4. Distribution of the number of token holders of different DeFi projects

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The distribution of the number of token holders of the DeFi project is different, and the number of token holders of Uniswap, AAVE and LRC is significantly more than that of other projects. This is related to their token distribution mechanism (such as Uniswap’s distribution of some tokens to historical traders), business nature, investor preferences, etc.

5. Gas cost trend on Ethereum

Gas costs are closely related to the development of mining. As the mining fever drops, the gas cost also drops. In addition, different DeFi activities have different requirements for handling fees. Simple transfers on Ethereum and DeFi mining require a completely different level of fees.

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Because of such high fees, the backbone of the crypto world began to consider building a Layer 2 solution, which will be the main scalability solution before ETH 2.0 achieves a substantial breakthrough, especially the Rollup series.

6.DEX officially became a substantial competitor of CEX

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The September trading volume of DEX exceeded USD 23.5 billion. In the past year, the entire DEX field, to be precise, mainly in the past 6 months, its transaction volume was close to 50 billion US dollars.

People have been discussing whether DEX will become a competitor of CEX. If there was controversy a few months ago, and now it has become a reality, Uniswap’s current transaction volume has surpassed Coinbase.

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From the current point of view, the average amount of Uniswap per transaction is 2500 US dollars. For small transactions, gas is too expensive and not cost-effective.

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The DEX trading volume of the three top AMM models accounted for about 90%. However, SushiSwap is not included here.

7. Super development of stablecoins

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The current supply of centralized stablecoins exceeds US$20 billion. Few people would have thought that 65% of USDT was still circulating on the Bitcoin network (issued based on the Omni protocol) a year ago, and now only about 7% remain. At present, most of the USDT is circulated on public chains such as Ethereum.

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The vast majority of DAI’s growth occurred in the last month: the current supply of DAI exceeds 860 million, of which more than 90% was newly added in the last month. Another interesting phenomenon is that the largest proportion of its mortgage assets comes from the centralized stable currency USDC rather than the long-term stable ETH.

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The current supply of synthetic USD has reached 74 million U.S. dollars. Although it is very small compared with centralized stablecoins and DAI, it has grown three times in the past three months, and the development speed is acceptable.

8. Compound and Aave in lending

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The scale of outstanding debt on Compound is 3.6 times that of Aave, but Aave is higher than Compound in terms of locked assets.

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Compound’s supply assets are dominated by stablecoins and ETH, while Aave is more evenly distributed, and the proportions of USDC, USDT, TUSD, ETH, LINK, and LEND are not far apart. More or less reflects the difference in the two businesses.

9. Synthetix in the field of derivatives

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From the perspective of its users, the development of synthetic assets is still at a relatively early stage. Even in the DeFi field, it is not the most popular field. Uniswap has more than 300,000 users. But given the future possibilities, the field of derivatives will become increasingly important.

10. The influence of YFI’s yVaunt

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YFI’s yVault has the largest amount of locked assets in ycrv, and its mining strategy has created selling pressure on CRV. The shortcomings of the token economic mechanism of mining that formed selling pressure gradually showed up, including Uniswap and Sushiswap. In the future, mining based on lower inflation rates or even deflationary models will gradually increase.

11. The prediction market is still in its infancy

At present, most prediction markets are around the general election and events in the crypto field, and their trading volume is very small, generally not exceeding 170,000 US dollars. Obviously, the incubation of the prediction market will take a long time.

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12. Nexus Mutual in the insurance market

Driven by mining, Nexus Mutual insurance has grown rapidly, currently exceeding US$220 million, and a large amount of insurance has been sold in most mainstream DeFi agreements.

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In this case, because Nexus Mutaul has certain restrictions (such as KYC, etc.), there will be more and more new insurance projects based on mining models in the future. Such as NSure.

13. Rising demand for privacy

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Tornado Cash has locked up assets in its privacy pool of USD 7 million and the number of users has exceeded 4,000. It has grown very rapidly in the past few months.

14.NFT transaction growth

With the development of DeFi, NFT has also grown significantly. The daily trading volume of NFT exceeded $1 million in the past week.

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Rarible surpassed opensea to become the new largest NFT trading volume platform. NFT trading volume platform rankings will change in the future.

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15.Pool Together grows flat

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The growth of Pool Together’s participation funds did not follow the upward trend of the development of DeFi, and the development was relatively slow. Its participating users exceeded 11,000 and only locked in 1.5 million US dollars. Its weekly bonus is only 500-1000 US dollars. Obviously, this reward amount cannot attract more users. For it to develop, there must be large-scale participation of small users. Only when the amount of locked DAI is large enough and the bonus is large enough can more users participate. Maybe in the future there will be projects that introduce liquid mining models to expand this field.

16. Wallet

Argent has more than 34,000 accounts and approximately 22,600 ETH deposited in its wallet. And MetaMask has more than 1 million monthly active accounts.

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DeFi is still in its early stages, and there are many problems it has to solve, such as scalability, cost, user experience, etc., which are all time-consuming things. It is not realistic to expect DeFi to have millions of users at once like Internet products.

However, DeFi has shown its huge possibilities. In this process, there will be many ups and downs and countless challenges, but in the end it will continue and will reshape the value interaction mode of the entire world.

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