Data review of DeFi’s torrent in June: the rise of lending upstarts, USDT’s market value exceeded 10 billion

Text | Edited by Jiang Haibo | Produced by Bi Tongtong | PANews

Text | Edited by Jiang Haibo | Produced by Bi Tongtong | PANews

If one word were to be used to describe the DeFi market in June, it would be "advancing rapidly".

DeFi may be experiencing the fastest period of development. PANews observes everything that is happening in the DeFi world from data analysis, and tries to foresee future developments.

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The total lock-up volume increased by 83.5%

In June, the total lock-up volume in the Ethereum network rose from US$1.026 billion to US$1.882 billion, an increase of 83.5%. As can be seen from the figure below, after Compound began to distribute the governance token COMP on June 15, the amount of locked positions increased rapidly. At the end of June, after a period of slight fluctuations, the lock-up volume continued to rise in July and exceeded $2 billion on July 2.

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Stable currency: USDT market value breaks through 10 billion U.S. dollars

The total market capitalization of the stablecoin market is an overall upward process, and has accelerated since March this year.

There were some "monumental" moments in the stablecoin market in June. On June 29, as USDT was issued an additional USD 300 million in the Ethereum network, the market value of USDT exceeded USD 10 billion for the first time. In addition to USDT, the fastest growing is the compliant stablecoin USDC. In June, the market value rose from US$731 million to US$986 million, an increase of 34.9%. On June 24, the Algorand Foundation announced a partnership with Circle to issue USDC on the Algorand chain. In March of this year, Tether issued 1 million USDT on Algorand one step ahead of schedule.

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Mortgage lending up 134%

Mortgage lending is the most important type of application of DeFi. In June, the loan balance of mortgage lending platforms on the Ethereum network rose from $545 million to $1.276 billion, an increase of 134%. Before June, Maker had been the top mortgage lending platform for a long time, but now it has been far behind by Compound.

At the beginning of June, Maker accounted for 73.59% of the borrowing volume, while Compound’s borrowing volume was only 15.26% of Maker’s. Throughout June, Compound’s borrowing volume rose from US$19 million to US$3.835 billion, an increase of 1869%.

Compound is a project that has developed rapidly recently, and has even changed the pattern and gameplay of the DeFi market.

There are 10 million COMP tokens in total, of which 5,004,949 COMP are distributed to users. Previously, the distribution of COMP was affected by the amount of interest earned on a given asset, but after a modification at the end of June, the distribution of COMP is only determined by the value of USD assets deposited or lent on Compound.

As can be seen from the figure below, as of June 30, the spread of Compound’s deposit interest rate and borrowing interest rate is extremely large, and the spread of BAT is close to 20%. Essentially, the project side of Compound still relies on the interest rate difference to maintain the operation of the project, but these benefits have nothing to do with COMP token holders. In addition, due to the allocation of COMP, there is a strange situation in the Compound project that the return on borrowing is higher than that on deposits, and the higher the borrowing rate, the higher the return. This mechanism has spawned a large number of arbitrageurs and cannot reflect real demand. Once the income does not meet the expectations of arbitrageurs due to the increase in borrowing volume or the decline in the price of COMP, these funds will inevitably be withdrawn from Compound.

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Decentralized exchanges ushered in a small peak in mid-June

For now, the main use of cryptocurrencies is still trading. Although the current trading market is still dominated by centralized exchanges (CEX), decentralized exchanges (DEX) are bound to be an important direction of future development.

In the Ethereum network, the trading volume of Uniswap V2 ranks first, far exceeding other projects. From the figure below, we can see that the top 6 exchanges in the 24-hour trading volume belong to the exchange pool type. This also reflects the role of the blockchain in the financial field - the blockchain is changing the traditional transaction and settlement methods. Although order book-type DEXs such as Loopring are also very popular and have made breakthroughs in technology, the 24-hour trading volume is less than $1 million.

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Synthetic assets hit record highs

The synthetic asset Synthetix (SNX) is undoubtedly one of the best-performing projects in 2019. The price of SNX rose by 2734% throughout the year, and staking SNX can obtain nearly 100% currency-based returns. This brilliant achievement was continued in June this year. From the end of last year to the first quarter of this year, the price of SNX dropped from $1.46 to $0.38, a drop of 74%. But the price of SNX reached a new high in June, and it is still hitting new highs continuously.

Synthetix is ​​a synthetic asset trading protocol in the Ethereum network. It can be said that Synthetix has opened a door to legally trade financial derivatives with cryptocurrencies. A recent popular project, Oikos (OKS), has transplanted the idea of ​​Synthetix into the Tron network.

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The number of cross-chain assets WBTC has increased by 126%

The first step of DeFi requires currency, and Bitcoin's market value of 100 billion US dollars can just provide assets for DeFi projects, which can be realized through cross-chain assets. From last year to the beginning of this year, the development of cross-chain assets has been in a tepid state. At the beginning of this year, Bitcoin's anchor currency was only 1110 BTC, and by the end of June it had reached 11773 BTC.

This year, the development of cross-chain assets was firstly because WBTC was listed as collateral assets by Maker DAO. Afterwards, liquidity mining (yield farming) such as Compound, Balancer, and Curve attracted more Bitcoin-anchored coins, and cross-chain assets therefore Entered a golden period of development.

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leveraged trading

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Summarize

Summarize

Among all kinds of DeFi projects, mortgage lending is the fastest growing at this stage, represented by Compound. The cross-chain assets that provide assets for DeFi are also ushering in a golden period of development due to the mortgage demand on Ethereum. In the first half of this year, the scale of WBTC has increased by 683%; the scale of RenBTC, which has only been online for more than a month, has also reached 1082. RenBTC's trustless model will inevitably continue to develop at a high speed, and even become the mainstream in the future.