DeFi's multi-chain movement: traffic gathers to head applications, Ethereum is still the main position

Analyst | Edited by Carol | Produced by Tong | PANews

At this time last year, the DeFi ecosystem on Ethereum began to explode. According to DeBank data, the total net locked positions of DeFi protocols on Ethereum surged from US$848 million at that time (June 1, 2020) to US$46.975 billion at the moment (June 9, 2021), which is equivalent to double 55 times. This directly drives the transactions on the Ethereum chain to become more active. According to data from glassnode, the number of single-day transactions on the Ethereum chain soared from 913,900 at the time to the current 1,150,900, an increase of about 25.93%, and the highest increase was about 78.63%.

However, due to the surge in demand for on-chain transactions brought about by DeFi at the same time, Ethereum transaction fees have also risen. According to data from glassnode, the average handling fee for a single transaction on Ethereum rose from 0.0019 ETH at the time to the current 0.0023 ETH, reaching a peak of 0.032 ETH at one point, exceeding 0.01 ETH for several days.

High handling fees have become the main sticking point for the development of the underlying network and the upper-level ecology. However, the reform of Ethereum’s handling fees cannot be completed overnight, which makes many projects begin to be deployed on Layer 2 of Ethereum and other public chains. Agreement, the multi-chain era of DeFi has kicked off.

After analyzing the transaction data of 40 DeFi protocols [1] in 8 public chains, Polygon, xDai, Zkrollup, BSC, Solana, Fantom, Heco and Avalanche, PAData found that:

1) DeFi traffic gathers towards the head. First, from a horizontal perspective, different chains are severely differentiated. For example, the average lock-up volume, average transaction volume, and average address number of BSC and Polygon are significantly better than other chains; second, from a vertical perspective, different protocols within the same chain are severely differentiated , such as PancakeSwap and Venus on BSC, QuickSwap on Polygon, and MDEX on Heco, have significantly higher locked positions, transaction volumes, and addresses than other applications on the same chain.

2) Multiple DeFi protocols have achieved multi-chain deployment, among which Sushiswap has the fastest multi-chain process, and 6 public chains/Layer 2 have been launched. However, Ethereum still maintains a dominant position in the multi-chain competition. Not only DeFi has launched the Ethereum version, but in many versions, the amount of locked positions on Ethereum is significantly higher than that of other chains.

3) At present, it cannot be fully explained that multi-chain deployment will disperse the traffic on Ethereum, but among the 8 projects within the statistical range, 4 projects (AAVE, DODO, Sushiswap, WePiggy) have recently locked positions on Ethereum Compared with 7 days ago, the proportion of locked positions decreased slightly. Among the 4 projects that can completely compare the data of 30 days ago, 3 projects (AAVE, QIAN, DODO) have a relatively obvious decline in the proportion of locked positions on Ethereum. More protocols and longer data validation are needed on this issue.

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The locked positions of each chain are significantly differentiated, with an average daily active address of 1634

DeFi traffic is gathering towards the head. On the one hand, among many public chains/Layer 2 building DeFi ecology, the average data performance of BSC, Polygon, and Heco is significantly better than others. On the other hand, in these chains, the top applications data performed significantly better than the others.

From the perspective of static lock-up volume, on June 8, the average (median [2]) lock-up amount of DeFi protocols on BSC reached 1.041 billion US dollars. Secondly, the average lock-up amount of Heco was about 566 million US dollars. Polygon The average lockup amount of zkrollup is about $204 million, and the average lockup amount of zkrollup is about $151 million. The average lock-up amount of DeFi protocols on other chains is less than 50 million US dollars.

It is worth noting that the static lock-up volume of PancakeSwap, Venus, MDEX, Ellipsis on BSC, MDEX on Heco, and QuickSwap on Polygon is significantly higher than that of other protocols on the same chain. The highest PancakeSwap reached 7.268 billion US dollars. But beyond that, most DeFi protocols on these chains have locked volumes under $60 million.

Judging from the static trading volume of DEX or the static lending volume of lending agreements, on June 8, due to the impact of liquidity mining, the static trading volume of MDEX on Heco reached about 2.2 billion US dollars, much higher than other protocols. In order to reflect the whole picture more accurately, it is not included in the analysis here. In addition, the average transaction volume of DEX on BSC and Polygon is relatively high, reaching about 52 million US dollars and 47 million US dollars respectively. Among them, the transaction volume of PancakeSwap and QuickSwap reached about 736 million US dollars and 231 million US dollars respectively. In addition, the transaction volume of DEX on other chains is mostly in the million-dollar level.

Currently, there is less data on the lending agreements included, but judging from the borrowing volume of the only two lending agreements on BSC, Venus is about 1.249 billion US dollars, much higher than WePiggy.

From the perspective of the number of static addresses, the average number of DeFi addresses on Heco has reached 25,600, while the average number of addresses on other chains is mostly around 1,000-2,000, and the average number of addresses on the least xDai is only 424. As far as a single protocol is concerned, PancakeSwap has the highest number of addresses, which is about 250,100. In addition, there are several protocols with more than 10,000 addresses, and the number of addresses for protocols with a small number of addresses is mostly less than 500. indivual.

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The lock-up volume of multiple projects on Ethereum is much higher than other chains, and the lock-up volume of some projects on Ethereum has been diverted

Within the scope of statistics, multi-chain projects with relatively comprehensive data include 1inch, AAVE, Beefy Finance, Cream, Curve, DODO, MDEX, ParaSwap, QIAN, Sushiswap, and WePiggy. Among them, Sushiswap's multi-chain layout has made the fastest progress. Currently, 6 public chains/Layer 2 have been launched. Secondly, Beefy Finance has also launched 5 public chains/Layer 2. In addition, most other multi-chain projects only have 2 to 3 chains, and most of them will deploy Ethereum. Among the 11 observed projects, only 3 projects, Beef Finance, MDEX and ParaSwap, have not launched the Ethereum version.

Judging from the static lock-up amount of multi-chain DeFi projects, the protocol that deploys Ethereum has a significantly higher lock-up amount on Ethereum than other chains. For example, AAVE's lock-up volume on Ethereum reached about 8.265 billion US dollars, which is 2.4 times that of Polygon. For Curve with a more significant gap, the lockup amount on Ethereum is about 10 times that of Polygon, and about 8000 times that of Fantom. However, if the initial protocol is based on a non-Ethereum protocol, such as WePiggy and QIAN, its lock-up amount on Ethereum will not have an advantage.

Although Ethereum has a significant first-mover advantage in multi-chain competition, will the widespread deployment of other chains affect Ethereum's dominance? Under the premise that the lock-up volume has generally declined recently, PAData analyzed the changes in the lock-up volume and their proportions of 8 projects on different chains.

It can be found that in the last 7 days, except for Curve and Cream, the lock-up volume of other multi-chain DeFi projects within the scope of observation has decreased, and the lock-up volume of AAVE and DODO on Ethereum has dropped by more than For other chains, the decline in the amount of locked positions on Ethereum in the former was 3.2 percentage points higher than that in other chains, and the difference in the latter was nearly 30 percentage points.

If the time period is extended to the last 30 days, then the lock-up volume of AAVE, Sushiswap, DODO, and QIAN on Ethereum has also dropped more than other chains. It is also worth noting that in the past 30 days, the lockup volume of AAVE and Sushiswap on Polygon has increased significantly.

The relative changes in the proportion of each chain’s lock-up volume may be more responsive to this question than the absolute lock-up volume. Among the 8 projects within the scope of statistics, the lock-up volume of the 4 projects AAVE, DODO, Sushiswap and WePiggy recently decreased slightly compared with 7 days ago, with a decrease of 0.72 percentage points, 5.18 percentage points and 0.91 percentage points respectively. percent and 0.60 percent. In addition, the three projects Cream, Curve and QIAN have recently increased their locked-up volume in Ethereum to varying degrees compared to 7 days ago. Among them, Curve has the most obvious growth, an increase of about 4.05 percentage points.

Among the 4 projects that can completely compare the data 30 days ago, the three projects AAVE, QIAN, and DODO have a relatively obvious decline in the lock-up volume on Ethereum, and the current lock-up volume has decreased compared to 30 days ago. 14.85 percentage points, 10.17 percentage points, 1.02 percentage points.

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Since the beginning of this year, the lock-up volume of Polygon has increased tremendously, but the greater the increase in the lock-up volume, it does not mean the greater the increase in the currency price

To some extent, the situation of DeFi multi-chain competition was opened by Ethereum. If Ethereum cannot continue to optimize the on-chain transaction experience through reforms, then multi-chain competition is likely to become fierce. At present, the tuyere of this track has obviously been formed.

Although the current locked-up amount of DeFi on Ethereum is still much higher than that of other chains, reaching 48.55 billion US dollars, the next echelon of BSC, Heco and Polygon are only 8.79 billion US dollars, 6.78 billion US dollars and 5.47 billion US dollars respectively, which are only equivalent to 18.11%, 13.96%, and 11.27% of the Ethereum DeFi scale.

However, in terms of growth rate, the growth rate of Ethereum DeFi lockups this year is only 167.96%, which is far lower than the 803.88% in the second half of last year. This year, the lock-up volume of DeFi on other chains has increased by more than 2000%, much higher than the second half of last year[3]. Among them, Polygon, which has the highest increase in lockup volume this year, even reached 3621990.01%, which is equivalent to an increase of 36,000 times, an astonishing growth.

The development path of Ethereum has proved that the prosperity of upper-layer applications will promote the skyrocketing of native tokens, which has also been reflected in the development paths of other chains this year. With the growth of DeFi locked positions, the prices of native tokens such as MATIC, SOL, and FTM have also risen rapidly. The three have increased by 8313.19%, 2412.50%, and 1666.13% this year, respectively. Meanwhile, BNB, AVAX and HT have all increased by more than 200%. Combined with the daily average amplitude of less than 4%, these tokens have all come out of a strong unilateral rise this year.

the data shows:

the data shows:

[1] According to the lock-up volume of DeFi projects on each chain, and covering DEX and lending agreements as much as possible, PAData selected 40 projects in total, but each analysis category will further delineate the sub-sample set according to data integrity.

[2] Considering that the data of individual items are significantly higher than others, this will cause the arithmetic mean to not accurately reflect the overall situation. Therefore, unless otherwise specified, the mean values ​​in this article refer to the median.

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