DappRadar report: DeFi giant whale user activity trajectory analysis on Ethereum and BSC chains

In the second part of the DeFi Giant Whale Analysis Report, we will mainly focus on the lending protocol to identify the giant whale pattern in these dapps, but will also complement the Binance Smart Chain (BSC) and the Ethereum decentralized exchange The comparative analysis of the two networks provides a more comprehensive view of DeFi. Finally, let’s see if DeFi giant whales are interested in NFT.

Key points

  • Although the entire market has a strong interest in NFT and games, in the third quarter, the DeFi field still attracted more than 590,000 active user wallets, reaching a TVL of $178 billion.
  • Lending agreements have more whales active than other production activities such as DEX; the average transaction size of the lending platform MakerDAO exceeded US$3 million in the third quarter, while the exchange liquidity pool Curve was approximately US$400,000 in the third quarter. 
  • Similarly, the Ethereum Dapp showed more activity than the BSC Dapp. The average transaction size on Aave in the third quarter was approximately US$461,000, while this indicator reached US$7.2 on Alpaca Finance. 
  • Like the DEX giant whale, the lending giant whale on Ethereum shows less correlation with other peer categories such as NFT or games, while the BSC giant whale tends to diversify its investment portfolio through tokens based on games and NFTs.
  • In October, only 17% of DeFi users interacted with NFT Dapp, which shows that DeFi Dapp users are only very interested in this category. 

Part One Review

As mentioned in the first part of this report, since the summer of 2020, the popularity of DeFi products has been on the rise. One of the most attractive features of the DeFi field is yield agriculture, which refers to the process of allocating initial investment to one of the many DeFi protocols to obtain a return. Once the protocol is full of liquidity, it will provide token swaps or crypto lending, etc. For terminal services, end users need to charge for this. 

The first part of this report focuses on activities that occur on decentralized exchanges or DEXs, and provides some insights into the whale model. These platforms act as decentralized market makers. For example, DEX on Ethereum seems to be more attractive to giant whale users than DEX hosted on BSC.

Obviously, the Ethereum DeFi ecosystem is where the giant whales thrive. Although the gas fee mechanism has changed due to the London upgrade, it is still an ecosystem that benefits giant whales. On the other hand, BSC is a network, and ordinary traders may find it more friendly in terms of fee barriers, as evidenced by the scale of transactions in Uniswap and PancakeSwap shown in the first part . 

It is also worth noting that BSC’s giant whale users have a more diversified investment portfolio. Especially in other peer categories, NFTs and games. In the second part, we will delve into the loan agreements Aave, MakerDAO and Alpaca Fiance. In addition, outline the main differences between the giant whales in Ethereum and BSC, which are currently the two most important ecosystems in DeFi. 

The whale in the loan agreement

In the second part, we will analyze the loan agreement in detail, and the loan Dapp democratizes personal debt. Issue loans to borrowers and return liquidity providers at interest rates.  

In Ethereum, MakerDAO, Aave, and Compound are clear references, while in BSC, Alpaca Finance and Venus are in a leading position. In this report, we will focus on Maker, Aave and Alpaca. 

MakerDAO

MakerDAO is a lending protocol hosted on the Ethereum network. As a supplier of the widely used stablecoin DAI, it is related to the DeFi field. DAI is a decentralized stablecoin with the largest supply, although it is much worse than the circulating supply of Tether or USDC . 

Unlike other lending Dapps, Maker does not accept lending transactions. In Maker, users can only borrow DAI by depositing collateral in the accepted cryptocurrency or using the accepted tokens to create a new vault. The most popular debt pairs include the liquidity pairs provided in Uniswap, which also helps to highlight the interactions that exist between the leading DeFi protocols.

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At the time of writing this article, Maker’s TVL is approximately $15 billion, and analysis of the transaction volume in Maker implies a high usage rate of giant whales. In May, both the transaction volume and the average transaction size hit a record high. However, with the sharp decline in the number in June, the activity of the giant whale has also decreased.

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In the third quarter, the average transaction size in August exceeded $3 million, but it has been declining since. It was reduced to about $1.5 million in October. Nevertheless, especially when compared with other lending agreements, Maker can still be regarded as a platform for giant whale users to borrow funds.

Aave

Aave has become one of the most important lending protocols currently deployed on Ethereum, Polygon and Avalanche. This DeFi Dapp allows investors to borrow 31 different assets and 16 liquidity pairs from Uniswap and Balancer. On Polygon and Avalanche, there are 7 assets respectively. 

Aave differs from other loan agreements in that it not only provides diversified assets, but also provides groundbreaking lightning loans and realizes interest rate conversion. Because of these free DeFi functions, Aave is widely used not only by large investors, but also by arbitrageurs. At the time of writing, the total value of Aave locked in Ethereum has exceeded $15 billion, so if you pay attention, you will find that Aave has some whale potential. 

Overall, the scale of transactions on Aave is almost the same as that on Maker. After the sudden drop in trading volume in June, the whale trading activity also decreased at the same rate. However, in the third quarter, even if the transaction volume remained at the same level, the average transaction volume almost tripled.

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Although Aave is a place where whale transactions frequently occur, it should be noted that the transaction size on Maker is about 10 times that of Aave.

Alpaca Finance

In order to understand the situation more fully and confirm that the behavior observed in the BSC DEX observed in Part 1 is repeated in the loan agreement, we analyzed Alpaca Finance. Alpaca is the largest loan agreement on BSC, enabling leveraged high-yield agriculture. It allows borrowers to make under-collateralized loans for leveraged high-yield agricultural positions. 

Looking at the transaction volume on Alpaca, we can see the same steady decline in June as observed in other DeFi Dapps. Although this is not in the scope of this report, it seems that in the DeFi field, the sharp drop in cryptocurrency prices in May has been felt more clearly.

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Alpaca’s average transaction size has been growing. Since the beginning of the third quarter, the average transaction volume has increased nearly five times, reaching nearly $125,000 in October. Although it is far from the million level seen in Maker, it is not far from the level of Aave.

Giant Whale Wallet: Stable Coins and Packaging Assets

So far, we have introduced the main differences between the DeFi protocol on Ethereum and BSC from the perspective of the giant whale. In order to further understand the behavior of giant whale users on these two networks, we analyzed two packaged versions of native tokens. Packaged ETH or WETH is one of the most used assets in DeFi, appearing in the top 5 trading pairs on the network.

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WETH is one of the least centralized assets. The top 5 WETH giant whale users only hold about 0.45% of the token circulation supply. In total, there are approximately 300,000 WETH holders.

Similarly, using DappRadar’s portfolio tool, we can determine that WETH’s top giant whale has high-end activities in DeFi, and it is also interesting to see another DeFi dapp DEX revenue aggregator 1inch that attracts giant whales. In addition, AXS is the governance token for the game to earn the game Axie Infinity , and holders can stake on the Ronin sidechain to get rewards.

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DappRadar Portfolio Tracker

From the top 5 holders of WBNB (the packaged version of Binance Coin), we see a very diluted asset. The top 5 WBNB giant whales only hold 0.75%. The number of WBNB holders is 804,500, which is also more than WETH, which reflects the difference in the supply of each token. 

What’s interesting is that, like DEX governance tokens, BSC wallets tend to be more diverse, not just focusing on DeFi. For example, one of the WBNB giant whales holds a large number of altcoins, such as MATIC, LINK, ADA, and EGLD, as well as a large number of TLM (the Alien Worlds game currency). 

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DappRadar Portfolio Tracker

This difference is even more obvious by comparing the most popular stablecoins in the two ecosystems. This BUSD (Binance USD) giant whale wallet holds different NFT and game-related tokens, once again fully demonstrating the diversification of BSC. 

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DappRadar Portfolio Tracker

Finally, check one of the DAI giant whale wallets and confirm that the Ethereum giant whale mainly focuses on DeFi, even if the activity is not always so active. 

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DappRadar Portfolio Tracker

The difference between Ethereum and BSC Giant Whale

BSC and Ethereum are the two most important blockchains in DeFi. Together, they hold about 76% of the total value locked in DeFi, and Ethereum holds more than 66%. After in-depth research on DEX and lending platforms that provide high-yield agriculture, we found four main differences between the whale patterns in these two main categories. 

1) Giant whale activity on Ethereum is often larger than BSC -it is undeniable that high gas fees on Ethereum hinder user investment; however, it is also true that giant whales are not so sensitive to these fees. Although ordinary investors may look for other alternatives, such as side chains, layer 2 solutions or other layer 1 alternatives, giant whale users will not do so. 

In general, when considering the gas cost, Giant Whale’s demand for DeFi products is basically inelastic, which means that Giant Whale does not worry about paying high fees when operating in its preferred network. 

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BNB Giant Whale Trading: Santiment

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Ethereum Giant Whale Transaction: Santiment

As shown in the figure above, compared with BNB in ​​the Binance network, the whale activity on the Ethereum lending agreement (with a transaction value of more than $1 million) has more ups and downs.

2) In the Ethereum DEX, the advantages of stablecoins are more obvious. Although the packaged versions of ETH and BTC are widely used in Ethereum, the supply of stablecoins is large. The supply of Tether and USDC, the most widely supplied stablecoins on Ethereum, exceeds that of BUSD by more than twice.

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By looking at the number of stablecoins held by giant whale users, it is obvious that the Ethereum giant whale has a greater certainty about the supply of these multi-functional assets.

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The supply of ETH held by the giant whale: Santiment

3) BSC giant whale users have a more diversified investment portfolio -although most of the DeFi giant whale users on Ethereum focus on stablecoins or DeFi-related currencies, the giant whale users on BSC seem to be more involved in games and NFTs . Among PancakeSwap giant whale users, we can see that game dapp tokens dominate, such as HERO, SPS or MPET. Although the Ethereum Whale will definitely consider other DeFi peer categories, the diversification in its portfolio is not so obvious.

We found a similar pattern by analyzing the BUSD and Alpaca investment portfolios, in which asset diversification is prominent.

4) The whale activity between the two networks is easier to distinguish in DEX than in lending agreement -after analyzing some of the most important DEX and lending agreements in Ethereum and BSC, there are obvious differences when analyzing DEX. Instead of focusing on lending Dapp. 

For example, the average transaction size of Curve in September exceeded US$450,000, while the transaction volume of PancakeSwap was approximately US$750 during the same period. Even compared with Uniswap, which has a transaction size of around US$50,000, the difference is quite large. 

However, when comparing the lending protocols Aave and Alpaca, the difference is only more than three times. Although the Ethereum lending protocol has higher whale activity, the gap between Alpaca and Aave is not as large as the gap between Uniswap and PancakeSwap .

Will the DeFi whale invest in NFT? 

To summarize this DeFi whale analysis, we analyzed the behavior of those wallets connected to the DappRadar portfolio tool in October (MTD). A DeFi user is understood as a wallet that has interacted with at least one DeFi function, and an NFT user is understood as a wallet that holds at least one NFT token.

This month, nearly 83% of this user group only interacted with DeFi Dapp, while 17% of users were involved in both categories. Compared with the August behavior report, we have seen an increase in interest in NFTs. At the time, only 13% of DeFi wallets had some degree of interaction with NFT. 

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Although people’s interest in NFT and games is on the rise, heavy DeFi users are still fully involved.

summary

Since 2020, the trade volume of the industry has grown exponentially. This has caused Gas fees on several blockchains to reach historical highs, especially on Ethereum. In addition, as the price of ETH hit a record high, gas fees forced ordinary investors to switch to alternatives, such as BSC. However, this is not the case with giant whales. 

As with other categories in the industry, it is also important to analyze DeFi whale users, especially when you realize that this category occupies most of the value of the industry. After analyzing some of the most important DeFi Dapps on Ethereum and BSC, it can be seen that the giant whale still pays great attention to Ethereum and DeFi. Of course, there are also giant whale activities on the BSC, but the number is much lower.

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Percentage of stablecoin held by Whale Wallet (> 5 million USD): Santiment

It is also worth noting that the difference is more pronounced in a highly used DeFi Dapp like DEX, and the difference is even smaller in terms of loan agreements. For example, we also expect this behavior to occur in the yield aggregator (another DeFi layer full of whale activity).

All in all, Ethereum giant whale users and DeFi giant whale users often only pay attention to this category. The “DeFi Summer” of 2020 was born in Ethereum and achieved unexpected results, so most of these giant whales tend to Stick to Ethereum because they can easily move from one Dapp to another for better revenue without linking assets to another blockchain. ; In addition, due to the lack of flexibility of giant whales in gas fees, and ordinary investors looking for alternatives like BSC, they can easily try DeFi. In addition, they are able to access other categories more widely, such as NFT and games. 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/dappradar-report-defi-giant-whale-user-activity-trajectory-analysis-on-ethereum-and-bsc-chains/
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