DeFi Protocols Are Stress-Tested Amid Crypto Market Slump, Are They Alright?

特邀专栏作者

2021-05-25 10:49 (UTC+8)

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From point to surface, analyze the performance of the DeFi protocol in the stress test triggered by this black swan event through macro data.

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From point to surface, analyze the performance of the DeFi protocol in the stress test triggered by this black swan event through macro data.

Written by: Pan Zhixiong

On the evening of May 21st, after the government agency issued a request for "cracking down on Bitcoin mining and trading", the global cryptocurrency market experienced violent shocks that lasted for two days. The single-day decline of mainstream currencies was as high as 30%. More Other currencies fell even more than 50%.

In fact, the market has undergone a substantial adjustment since May 19th. Under this extreme stress test, it is another opportunity to observe the operational efficiency of the DeFi (decentralized finance) system—especially when the system The amount of participating funds once exceeded the milestone of 100 billion U.S. dollars, and some of the assets are still being over-pledged or executing leveraged transactions.

The violent market fluctuations in the past weekend were rare large-scale and high-volatility "black swan events" since last year's 312 (Black Thursday). Last year, there was a flash crash in the 3.12 cryptocurrency market. The biggest impact was that the liquidation engine in the Maker system of the "central bank" on the chain encountered some problems. Fortunately, it resumed operation through auctions and improved protocol design. MakerDAO did not suffer from the same problems during this period of wild market volatility.

Against such a background, after experiencing large market fluctuations again, we hope that by summarizing some macro data of the DeFi world and combining the data presented by some core DeFi protocols during the market fluctuations this weekend, we can gain a clear understanding of the current situation from point to point. In the market fluctuations, the performance of these DeFi protocols in the stress test triggered by this black swan event.

Looking at the overall performance of the DeFi field

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DeFi Total Locked Volume (TVL): Nearly cut in half

According to DeBank data, the total lock-up volume (TVL) of DeFi protocols in all blockchain networks dropped from US$130 billion on May 11 to a minimum of US$67 billion within 12 days, nearly halved (-48%).

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DEX trading volume: all-time high

In the market crash that already occurred on May 19, the cumulative trading volume of all DEXs was the highest in daily trading volume, close to 22 billion US dollars.

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Mortgage lending data: close to halving

From the on-chain data, the total borrowings fell from a historical high of US$26.7 billion to US$15 billion, a drop of 44%, which was comparable to the market decline.

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Mortgage Liquidation Data: Record Highs

On May 19 and 23, the highest and second largest chain clearing volumes in history were born successively, with single-day liquidation volumes of 614 million US dollars and 140 million US dollars respectively. In addition, on May 19, Venus on BSC also suffered from a large area of bad debts due to the design problem of the system mortgage rate, resulting in a liquidation volume of more than 250 million US dollars.

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Gas: more stable

This may be related to the recent increase in the block capacity of Ethereum, the increase in the number of transactions has a reduced impact on block Gas, or it may be because more and more miner nodes have deployed Flashbots, which can reduce the Gas bidding in MEV.

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Stablecoins backed by fiat currencies or assets continue to grow (generally referred to as compliant stablecoins, but USDT is more controversial), and have not flowed out of the blockchain or DeFi system due to violent market fluctuations. The scale is 63.4 billion US dollars.

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The oracle machine represents the frequency with which DeFi and other businesses on the chain need off-chain or price data. Therefore, during periods of large price fluctuations, the number of times the oracle machine is called also increases significantly. Although it is not the highest in history, it can also be ranked in the top three in history, with more than 35,000 calls in a single day.

Synthetix

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Synthetix is a synthetic asset protocol realized through a very high mortgage rate. The native token SNX of the protocol can mint various synthetic assets such as sUSD through a mortgage rate of 5 to 10 times, simulating the value fluctuations in the real world or other encrypted currency assets.

But because of its extremely high mortgage rate, the capital efficiency of the agreement is relatively low. But even so, many people will question the "sustainability" of the Synthetix model, but fortunately, in the past few days, Synthetix has not stepped on or spiraled down.

According to the data from Chain, DeBank and CoinMarketCap, Synthetix’s operation has not experienced any significant problems in the past few days, which is comparable to the overall market volatility. TVL has dropped from the original peak of 3.8 billion US dollars to 2 billion US dollars, a drop of about 47%.

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Data Sources:https://stats.synthetix.io

Maker

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"On-chain central bank" Maker encountered a problem with its clearing system on March 12 last year, but it performed well in the market fluctuations in recent days. It can be seen that the team's adjusted system design has solved the problems that existed last year.

The issuance of DAI is currently about 4.4 billion US dollars, while the total amount of mortgage assets in the entire system is close to 7.5 billion, and the overall mortgage rate is about 170%.

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Terra

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However, the performance of the US dollar stablecoin UST issued by Terra is not satisfactory. The most serious unanchor situation has occurred since Terra issued UST. UST fell to a minimum of 0.93 US dollars and has not yet fully recovered.

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Float

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As a new generation of algorithmic stablecoin that is not anchored to the US dollar, Float just completed its founding and issuance last week, but was unlucky and encountered violent fluctuations in the ETH market at the beginning-you know, Float used ETH as collateral in the early days, so Definitely a big impact.

On the whole, Float is not quite like a "stable currency". Its current role is more like absorbing the volatility of collateral (ETH) through the governance token BANK and the auction mechanism, and providing a relatively stable asset.

Perpetual Protocol

The Perpetual Protocol, a leveraged derivatives trading protocol deployed on the Ethereum sidechain xDAI, is also one of the representatives of trading applications. More than a month ago, due to the violent fluctuations in the ETH market, the price in the agreement crashed or "pinned". Compared with the centralized exchange, it is nearly 1000 US dollars lower.

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