OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

As the industry’s infrastructure, the public chain carries people’s expectations for the blockchain as the underlying network of Web3. In the past year, Ethereum has undergone a London upgrade and continues to move towards ETH 2.0. The emerging public chain embraces DeFi to rapidly develop the on-chain ecology and become a big winner in the crypto world in 2021. We try to use the data on the chain to compare and analyze the hotspots of the public chain and DeFi in the past year, and explore the core value of the public chain and DeFi protocol.

  • As the leader of the public chain, Ethereum is still the main battlefield and the birthplace of innovation in this field. In the past year, multiple indicators of Ethereum have achieved ETH Flip BTC.
  • After the implementation of Eip-1559, the volatility of Ethereum Gas fees decreased, and the miner’s yield curve began to move closer to the staking model.
  • Layer-2 is beginning to make its mark, Arbitrum takes the lead, and zk-Rollup is poised to take off. How to get through the liquidity of assets on Layer-2 is the key to development.
  • The new public chain embraces the rapid rise of DeFi, and multi-chain deployment has become the choice of many protocols, but blindly deploying multi-chain is not a rational choice.
  • The release of Uniswap V3 is a major event in the DeFi field in the past year. Higher capital utilization has laid the foundation for more capital to enter the market. The emergence of Convex allows Curve users to get more generous rewards, but it also brings challenges to community governance.
  • Security issues have become a hot word in the DeFi field in the past year, and the importance of on-chain data and tracking has begun to highlight; supervision has brought pains to the development of DeFi, and the head DeFi protocol has begun to respond to regulatory pressures.

1. Ethereum & public chain

1. Ethereum vs Bitcoin

2021 is a year of optimism for Ethereum, with a market value of up to 562.491 billion U.S. dollars, an increase of 568% from the beginning of the year. The exchange rate of ETH/BTC exceeded 0.08, a new high in the past three years, an increase of more than 350% from the beginning of the year.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: OKLink

Since the beginning of 2018, the ETH/BTC exchange rate has started to decline from 0.1, and once fell below 0.02 during the period. ETH holders have witnessed Ethereum moving from Constantinople to London, and it has regained momentum in the past year. With the London upgrade and activation of EIP-1559, Ethereum officially opened the road to ETH2.0. But the computing power of the Ethereum network is still soaring in the past year. As of the time of writing, the total network computing power of Ethereum was 866 TH/s, an increase of 208% from the beginning of the year, while Bitcoin’s computing power increased by 17.62% during the same period.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: OKLink

Many applications on Ethereum contribute a lot of transaction fees.

The amount of Ethereum consumed by NFT transactions on OpenSea alone exceeds 130,000 ETH, and various DeFi and NFT on-chain activities have greatly consolidated Ethereum’s status as an infrastructure at the application and settlement level. Brought huge profits.

As of December 22, the income of Ethereum miners for the year has exceeded 17.7 billion U.S. dollars, while the income of Bitcoin miners during the same period was 16.2 billion U.S. dollars. Since May this year, the monthly income of Ethereum miners has been consistently higher than that of Bitcoin miners.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Miners provide computing power guarantee for the network, and the corresponding block reward is the network’s “security expenditure”. From this perspective, Ethereum’s security spending has surpassed Bitcoin in the past year. Of course, this is due to the sharp rise of ETH in the past year.

On the other hand, we can use FRM, that is, “total miner income/fee income” to quantify the impact of fees generated by on-chain behaviors on miners’ income, and the security of the network after the block reward is cancelled.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

In the past year, the average FRM of Bitcoin was 39.74, while that of Ethereum was 6.2, which means that the user’s fee expenditure has accounted for more than 15% of the annual income of Ethereum miners, while the proportion of Bitcoin is only Is 2.5%.

We also compared the differences in the number of new and active addresses between Bitcoin and Ethereum:

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

As of December 31, the average daily number of new and active addresses in Ethereum during the year were 161,700 and 615,000, respectively; while that of Bitcoin was 445,800 and 979,900, respectively. It is worth noting that in terms of the number of active addresses, Bitcoin and Ethereum have shown a certain degree of tacit understanding: the number of active addresses in Ethereum has increased sharply when the daily activity of Bitcoin has plummeted many times. The reasons for this phenomenon are not yet clear, but combined with the market performance of the two, it seems that Ethereum’s claim that it will take over funds after Bitcoin’s peak seems to have some truth.

In addition to the indicators on the chain, we have indeed seen that funds from traditional institutions and fields not only flowed to Bitcoin, but also began to invest in Ethereum and even more types of encrypted assets.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

As of December 22, the value of Ethereum-related securities products was close to 5.8 billion U.S. dollars, while similar products of Bitcoin were valued at 10.5 billion U.S. dollars during the same period.

About Ethereum surpassing Bitcoin

The performance of Ethereum in the past year was so impressive that the ETH FLIP BTC argument reappeared in people’s vision, but we still believe that this vision is difficult to achieve in this market cycle.

Bitcoin is continuing to consolidate its position as a digital gold, and at the same time it will become the legal tender of El Salvador in 2021, and it is the first choice for most investors entering the crypto asset industry.

As a representative of Blockchain 2.0, Ethereum still needs to face the test and competition from many parties: the progress of network expansion and upgrade, and the governance issues after turning to POS consensus are all foreseeable challenges.

2. EIP-1559: Out of uncertainty

On August 5th, Ethereum reached the [London Upgrade] scheduled block height, and the scheduled 5 EIP proposals were activated. Among them, the EIP-1559 proposal brought new token supply to ETH by destroying the base fee for transactions on the chain. Variety.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

As of December 23, the amount of Ethereum burned has reached 1,248,400 ETH, and the average burn value of a single block is 1.395 ETH, which means that the activation of EIP-1559 will reduce the current inflation rate of Ethereum by nearly 70%.

Furthermore, in the progress of Ethereum’s destruction, OpenSea, Uniswap, and Tether have become the “backbone”. So far, 130,700, 111,400 and 66,500 ETH have been destroyed.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

DeFi, stablecoins, and NFT related activities have become the current main use cases of the Ethereum network, and are also the main areas of development for other public chains in the ecological development.

On the other end, changes in miners’ income and transaction fees after the upgrade in London have become another point of our concern.

In terms of miner income, from the activation of EIP on August 5 to December 22, a total of 139 days, during which Ethereum miners earned 2,118,500 ETH, of which 241,600 ETH was commissioned, accounting for 11.4%. In the same period last year, Ethereum miners earned 2,996,600 ETH, and the handling fee was 1,099,700 ETH, accounting for 36.69%.

Considering that we experienced DeFi Summer in the same period last year, we will also sum up the same 139 days of Ethereum miners’ income from March 19th to August 4th this year, totaling 2,841,100 ETH and handling fee of 976,200 ETH, accounting for 34.33 %.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

From this we can conclude that after the implementation of EIP-1559, the miners’ ETH standard income is as expected, and there has indeed been a decline. But at the same time, the overall extreme volatility of handling fees has also been eased compared to before. The daily income of Ethereum miners no longer fluctuates sharply as before, but fluctuates within a narrower range, which is closer to the staking possible under the POS consensus. Foreseeable benefits.

After the official launch of ETH2.0, after the current POW chain and POS chain are merged, the inflation rate of ETH will further drop significantly. At that time, the POS rewards for participating in the pledge will become the only source of additional issuance of ETH.

If 30% of Ethereum is pledged, the annual additional issuance will be around 1.75 million ETH. The current annual burn volume of Ethereum is expected to be 3.2 million ETH. Ethereum will move from inflation to deflation, with a deflation rate exceeding 1.2%. On the other hand, although the activation of Ethereum EIP-1559 has reduced the previous situation of high gas fees under extreme conditions, it still has not solved the fundamental problem of high gas fees in Ethereum, especially as the price of ETH increases, users The cost of interaction with Ethereum remains high.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

At the beginning of December, Ethereum once approached the $5,000 mark, and the average single-day transaction fee also reached $61.86. Even if market enthusiasm has faded recently, the average daily fee for a single transaction on Ethereum is still above $20. The high interaction fees have blocked retail investors and even developers’ enthusiasm for Ethereum:

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Since August this year, the number of daily new contracts on Ethereum has dropped significantly. During the same period, a number of new public chains began to rise, and the market value and ecological development entered a period of acceleration. The high interaction cost of Ethereum has caused user overflow, and it will take time for ETH2.0 to go online. The new public chain seized this opportunity period and began to exert its strength.

3. Public chain warfare: data does not lie

How to judge the value of the public chain is still an unresolved issue. We compare and analyze the activity data on the public chain and try to get some conclusions.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

The number of transactions is the first indicator we think of. Due to the adoption of the POH consensus mechanism, Solana has obvious advantages in this indicator. As of December 25, the number of transactions executed on the Solana network in 2021 has exceeded 5.3 billion, which is even higher than the total number of transactions in the public chain included in the statistics such as BSC, HECO, and ETH.

On the other hand, ADA and DOT rank lower in the number of transactions. The Alonzo upgrade of ADA to support smart contracts began in late September this year, and the DeFi ecosystem including Dex and lending is still in its infancy; while the DOT parachain card slot auction was officially launched in early November, and the subsequent ecological development is also needs time.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

The number of active addresses is another indicator that we use to consider public chain operations, and its significance is to reflect the true number of users on the chain.

The number of active addresses in Ethereum remains within a relatively stable range. For most of the time in 2021, the number of daily active addresses in Ethereum will remain above 500,000. This also means that the current network utilization rate of Ethereum may be close to the carrying limit, and it needs to be expanded to accommodate more users.

At the same time, the number of active addresses in Ethereum shows a clear positive correlation with market popularity. In the hottest market in April to May, the number of active addresses in Ethereum also reached the peak of the year.

In addition to Ethereum, the number of active addresses on BSC has surpassed ETH since May, and has achieved substantial growth with the help of GameFi and other hotspots during October-November. The highest number of single-day active addresses during the year reached 2.271 million, which was significantly higher than Other statistical public chains are also the only public chain that exceeds ETH in the number of daily active addresses.

DOT stood above the $50 mark for the first time in May, and the number of active addresses in that month also set a high record for DOT in the year. As the market rebounded in October, the number of active addresses on the DOT chain also picked up.

Avax began to make efforts in the second half of the year. It has incubated several TVL applications with more than one billion U.S. dollars, but there is still a big gap between the number of users and public chains such as ETH.

On the whole, the number of active addresses and fluctuations of different public chains are closely related to the market popularity and the time node of the public chain itself. The market value of the public chain shows a clear positive correlation with the activity on the chain. More users and transaction activities mean higher adoption and market acceptance. For public chains, there is no indicator that is more important than adoption.

4. Layer 2: Ethereum’s counterattack

Although in the past year, rising stars such as Solana and Avalanche have emerged on the public chain track, and exchange public chains such as BSC have entered the battlefield, it is undeniable that Ethereum is still the center of innovation in the public chain field. Whether it is DeFi, GameFi or Dao, most of its ideas and prototypes come from the Ethereum ecology and community. The emerging public chain “crosses the river with Ethereum” with lower interaction costs and faster confirmation time.

Faced with this status quo, the Ethereum community chose Layer-2 as the expansion solution before the official launch of ETH2.0. Arbitrum and Optimism are based on Optmistic Rollups technology, while Zksync and Loopring use zkRollup based on zero-knowledge proofs, while Polygon and Xdai use solutions similar to side chains for capacity expansion.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

From the perspective of handling fees, the current fee of Layer-2 is indeed significantly lower than that of the Ethereum main network:

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: l2beat.com

The current ETH transfer fee on Loopring is about 3% of the Ethereum mainnet, and Zksync and Polygon are 4% of the Ethereum mainnet. Arbitrum and Optimistic costs are slightly higher, around 30% and 35% respectively.

The comparison of Swap on the chain is more obvious: the transaction fee for DEX transactions on Ethereum is often more than 25 US dollars, while Zksync and Loopring only cost 0.56 and 1 US dollars, respectively, and Optimistic and Arbitrum are only 2-3 US dollars. From the perspective of fees alone, Loopring and ZKsync based on zkRollup seem to be more dominant.

However, because Optimistic and Arbitrum have not yet issued their own tokens, and are still in the early stages of development, the user base is small, and ETH is still used as the transaction fee, so the fee is relatively high. and

Regarding the competitive relationship between zk-Rollup and Optimistic-Rollup, V God also expressed his opinion. He believes that with better compatibility with EVM, Optimistic-Rollup will seize the market in the early stage of Layer-2 development, but with the ZK-SNARK technology Mature, zk-Rollup will move towards more use cases in the middle and late stages.

On the other hand, the current TVL on Layer 2 has reached 5.6 billion U.S. dollars, and the amount of deposited funds on different Layer 2 is not at the same level.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: l2beat.com

Arbitrum accounted for nearly half of the deposited funds of Layer-2 with a TVL of US$2.5 billion. Dydx based on Starkware and Loopring using zkRollup are ranked second and third with US$960 million and US$580 million respectively.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

With the first-mover advantage and the easy deployment of Optmistic Rollups, Arbitrum has become the fastest-growing protocol in the Layer-2 ecosystem. The mainstream CEX platform has also successively supported asset deposits and withdrawals on Arbitrum, which will bring advantages to the development of the Arbitrum ecosystem. Users no longer need to experience the waiting period from Layer-2 withdrawal to the mainnet, and the convenience is greatly improved. However, due to the difficulty of development of zkRollup, the current main application scenarios seem to be still concentrated in the field of payment. It seems that it will take time to see more complex applications deployed to Layer-2 of zkRollup.

5. ETH2.0: slow is fast

Layer-2 has become the mid-term solution for Ethereum’s expansion, and ETH2.0 is the end of the Ethereum roadmap. In order to achieve this goal, the Beacon Chain was officially launched at the end of 2020, and the pledge of validator nodes was opened, which opened the curtain of Ethereum 2.0.

After the self-confidence standard chain is online, users can participate in the ETH2.0 ecology by staking 32 ETH. In the past year, the Ethereum 2.0 deposit contract has jumped to become the address with the most ETH balance. More than 8.87 million ETH has been transferred to the smart contract, valued at more than 3 billion U.S. dollars, which also means that the staking rate of Ethereum has reached 7.5 %.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

However, Ethereum’s current pledge rate of 7.5% is still low compared to other public chains’ pledge rates of more than 50%. The main reason may be that the launch time of ETH2.0 is still to be determined. Now participating in the pledge means locking ETH until 2.0 is online. The risk of price fluctuations during this period may be unacceptable for most investors.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: stakingrewards

Compared with other public chains, the pledge rate of Solana and Cardano reached 70%. Avaxlanche and Polkadot exceeds 50%, Algorand Terra and also 46% and 37%, respectively.

From the data on the chain, the addresses currently participating in the Ethereum 2.0 pledge include centralized exchanges and POS service providers, decentralized pledge agreements such as Lido, and Ethereum giant whales.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Beaconcha

After deduplicating the addresses that have participated in the pledge, we found that more than 59,500 addresses have been pledged on the chain of 32 ETH at least once, and the current number of nodes in the beacon chain exceeds 270,000, which means that every Each address operates more than 4 nodes on average, and the amount of pledged ETH is more than 128 ETH.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

In addition to 7.5% of the ETH pledged in the Ethereum 2.0 deposit contract, the number of Wrapped ETH has also reached more than 7.5 million, accounting for more than 6.3%.

The number of ETH in centralized exchange wallets continued the downward trend since the DeFi boom in 2020, dropping to 14 million ETH in early December.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Various ETF products and Grayscale ETHE trust hold 1.45 million and 3.11 million ETH, respectively. Among them, ETF will increase significantly in 2021.

In addition, the official cross-chain bridge of the second-tier network has also undertaken a considerable amount of ETH. The official cross-chain contracts of Polygon and Arbitrum have stored 510,000 and 35 ETH respectively. This amount will increase among users with the expansion plan in 2022. Further expansion, there is still greater room for growth.

Although Ethereum’s plan to switch to POS consensus has been disclosed in the roadmap early, when it is actually implemented, progress in all aspects seems to be slow. The reason may be that on the one hand, it is necessary to consider the demands and balance of the interests of all parties including miners, communities, and the market; on the other hand, it is how to complete the consensus transformation of the network without reducing the current decentralized attributes of Ethereum.

2. DeFi: a year of narrative and gaining momentum

1. DeFi multi-chain blooming: what’s the difference?

In the past year, the emerging public chain has attracted a large number of users and funds by embracing DeFi. The path of stablecoin-lending-DEX-financial management has become a clear and feasible development model for the new public chain’s DeFi ecosystem. And some head DeFi protocols also start multi-chain deployment and provide users with liquidity incentives. Nevertheless, the development level of different public chains in the DeFi field is obviously uneven, which is particularly obvious in the amount of lock-up (TVL) on the chain.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

At present, the total TVL of various public chains has exceeded 200 billion U.S. dollars. Among them, the TVL on Ethereum exceeds 150 billion U.S. dollars, and it is still the main battlefield of DeFi.

Avalanche, BSC, and Solana have maintained a rapid development momentum in the past year, with TVL reaching tens of billions of dollars; Polygon, Fantom, and Arbitrum’s TVLs have reached the billions of dollars.

In a horizontal comparison between protocols, among the top ten protocols of TVL, five protocols including Curve and Aave have been deployed in multiple chains, while five protocols including Maker and Convex focus on the Ethereum ecosystem. Curve has become the current DeFi protocol lock-up volume leader with a TVL of more than 20 billion U.S. dollars.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

In addition to Ethereum, we found that cultivating our own ecological DeFi protocol is a common feature of the rise of emerging public chains.

Avalanche’s ecological loan agreements include Benqi, Dex Swap, Trade Joe and Pangolin, and asset management and farming, such as Wonderland, which is popular at the end of the year. The trading volume of Pancake on BSC has long been in the forefront of Dex in the whole network, and Venus and Tranchess TVL, ranked second and third, are both above $1 billion.

Solana has incubated multiple applications such as Raydium, Marinade, and Tulip, covering the main use cases of DeFi such as lending, DEX, and wealth management mentioned above.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

But at the level of a single DeFi protocol, whether it should be deployed in multiple chains is related to its own business direction.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

At present, the overall lock-up volume of DeFi is close to 250 billion U.S. dollars, and the TVL on Ethereum exceeds 150 billion U.S. dollars, accounting for more than 60%. If the DeFi project is deployed in multiple chains, it seems that the TVL on different public chains can be compared with the proportion of the public chain TVL in the figure above to determine whether the deployment has attracted enough funding attention.

Take Aave as an example. The TVL on Aave currently exceeds US$14 billion and is distributed on the three public chains of Ethereum, Avalanche and Polygon, accounting for 61%, 22% and 17%. The TVL on Avalanche and Polygon is the Aave belt. Nearly 40% of the funds have been deposited, and the multi-chain deployment has greatly assisted the development of Aave.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Another classic case of multi-chain deployment is the cross-chain protocol Multichain (formerly Anyswap).

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

As the leading player in the current cross-chain bridge, Multichain has a TVL of more than 5 billion U.S. dollars. Multichain deployment also fully complies with the needs of its cross-chain business, helping it reach users on different public chains and seize the opportunity.

As a comparison, Sushiswap also implemented cross-chain deployments on multiple public chains, but compared to the previous two, the effect does not seem to be significant.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Sushiswap’s current TVL reaches 5.3 billion US dollars, of which 4.2 billion US dollars are on Ethereum, accounting for more than 80%. Its TVL proportions on several networks such as Polygon and Avalanche are all less than 10%.

The reason behind this may be that DEX is an important basic application of the DeFi ecology, and the public chain community is often willing to incubate its own Dex protocol. Just like Quickswap on Polygon, Trade Joe on Avalanche, etc., Uniswap also focuses on the Ethereum ecosystem.

At the same time, the start of DEX mostly needs to use the form of LP Farm. Too many multi-chain deployments will inevitably affect the Token distribution of the project itself, and fall into a dilemma: not providing sufficient incentives and attractive yield will lead to users and Funds flock to other DEXs, and excessive returns will bring selling pressure on the market.

On the whole, the multi-chain deployment of DeFi in the past year has become a way for it to reach a wider range of users. The new public chain has also gathered users through the development of its own DeFi ecosystem, and the two complement each other. But specific to the level of a single DeFi protocol, multi-chain deployment is not a panacea, and whether to implement multi-chain deployment still needs to be considered in conjunction with its own business direction.

2. New gameplay of DeFi: Uniswap V3 and Convex

Dex’s transaction volume in the past year exceeded $1 trillion, an increase of 762% from the previous month. Uniswap still leads the Dex track and released Uniswap V3 in early May, becoming one of the most important innovations of DeFi this year.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Since its launch in May, Uniswap V3 transaction volume has continued to grow. From May to the end of the year, the transaction volume was approximately US$340 billion. The 8-month transaction volume accounted for 34% of the total Dex transaction volume in the whole year.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Higher capital utilization is the killer feature of Uniswap V3.

Compared with Uniswap V2, the capital utilization rate of V3 has been greatly improved. Intercept Uniswap V2 and V3’s December transaction volume and TVL as a comparison: the average TVL of December V3 fluctuated between 4.0-4.4 billion U.S. dollars, the monthly transaction volume was 69.74 billion U.S. dollars, and the capital utilization rate exceeded 50%. In the same period, Uniswap V2 The utilization rate is around 7.5%.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

If compared with the ETH-USDC trading pair, the average seven-day transaction value on Uniwap V3 is US$3.59 billion, the average value of TVL seven-day is 282 million, and the capital utilization rate is as high as 181%. Uniswap V2’s figure is 8.65%. In horizontal comparison, the overall utilization rate of Dex on Ethereum is currently fluctuating around 10%.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

With the deployment of Uniswap V3 to Polygon and the opening of liquidity incentives, Dex’s capital utilization rate should be improved, and Uniswap’s market share may be further expanded.

Another thing that makes people feel eye-catching may be the launch of Convex. As a protocol that focuses on improving the rate of return for Curve users and holders, the emergence of Convex not only allows Curve’s LP Farmer to easily get the highest rewards, simplify the cumbersome process of staking Crv, and realize the flow of pledged assets through the design of cvxCrv sex.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

Both Curve and Convex currently have TVLs of more than US$20 billion, occupying the top two TVLs in the DeFi protocol.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Data source: Ouke Cloud Chain Master

After Convex went online in May, Curve’s TVL on Ethereum and Convex’s TVL went hand in hand, both of which started an upward mode. During the same period, the market value of Crv’s tokens continued to rise in the second half of the year.

Of course, the growth of the TVL of the two still relies on providing high incentives to the pledge party, thereby achieving a reduction in the circulation of tokens. This method is more or less familiar. At the same time, the community voting and governance issues brought about by Crv locked in Convex are also hard to ignore. Perpetrators can purchase CVX to drive the veCrv locked by Convex to vote for their projects, thereby increasing the APY corresponding to the Curve fund pool, attracting users to provide LPs, and launching Rug Pull by themselves.

3. Governance, safety and supervision

As mentioned above, as the scale of DeFi continues to expand (more than $200 billion in TVL), community governance issues have begun to become prominent. At the same time, on-chain security incidents have become a hot news in the past year. Hacking incidents that cost tens of millions or even hundreds of millions of dollars have caused the market and capital to pay attention to smart contract audits, on-chain fund tracking and other business directions.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Image source: Ouke Cloud Chain Master

In the Poly Network security incident, more than $600 million in funds were stolen, which was the largest chain security incident involving the amount of money during the year.

At the end of September, a loophole was discovered after the upgrade of the lending protocol Compound, which would cause some users to obtain additional Comp governance tokens. As the protocol upgrade requires 7 days of voting, Comp, which exceeds $140 million during the period, is at risk.

In November, the Mochi protocol of the decentralized stable currency USDM used the purchase of CVX to increase the proceeds of USDM’s liquidity pool on the Curve to attract users to form stable currency LP mining, thereby drawing more than 40 million US dollars of funds from the pool.

After the hacking incident, the centralized platform often locks the flow of funds through on-chain data and tracking, thus cutting off the hacker’s idea of ​​withdrawing funds through the centralized platform. Some project parties will choose to replace the contract and replace the stolen token with a new token contract to recover their losses. The stablecoin issuer Tether also froze more than 33 million USD of USDT in the Poly Network incident.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Image source: Twitter

All parties working together to face the problem and try to solve it is of course a positive aspect of facing hackers and security issues. But in the blockchain world that believes in “code is law”, how to protect the safety and interests of users under the premise of ensuring innovation may be a compulsory course before DeFi enters the wider world.

In terms of supervision, US SEC Chairman Gary Gensler has repeatedly stated that DeFi “needs regulatory compliance”. Although the DeFi community’s attitude towards supervision has not yet been unified, the head agreement has already prepared for this.

In mid-July, Uniswap Labs delisted a total of 129 synthetic stocks and derivative tokens on the front end of the trading page of Uniswap’s official website on the grounds of “changing regulatory environment”.

At the same time, Uniswap funded a “DeFi Education Fund” during the year to deal with legal analysis and other aspects. The proposal passed a community vote in June and obtained 1 million UNI funds. The legal affairs leaders of the head agreements such as Aave and Coopound also participated.

In addition, Andre Cronje, the founder of the financial agreement YFI, also initiated a proposal to fund 1 million US dollars for the DeFi legal advocacy organization LeXpunK_DAO. He revealed that the Curve and SushiSwap communities also participated in the event.

Aave launched Aave Pro for institutional investors in July. This version provides liquidity pools for Bitcoin, Ethereum, USDC and AAVE. It will not be publicly launched, but only for qualified users through KYC and whitelisting mechanisms. Institutional investors, and will provide protection against money laundering and fraud.

OKLink Annual Data Report: 2021 public chain development compulsory course embraces DeFi

Image source: Twitter

From the current point of view, regulation has become the main issue that DeFi needs to solve before it enters the wider market. Head protocols such as Uniswap and Aave have also made corresponding preparations for this. At the same time, although the regulatory authorities have been criticized by the community for lack of transparency and clear standards, they seem to agree that DeFi can bring real innovation. It is believed that in the new year, DeFi can bring more funds and users into the market under the premise of satisfying regulation.

Three, summary

As the most native infrastructure of the blockchain, the public chain carries the industry’s pursuit of decentralization. In 2021, the emerging public chain will take the initiative to take over the spillover value of Ethereum, and in the process let more users learn about cutting-edge concepts such as DeFi and NFT. In the new year, we look forward to seeing emerging public chains go further forward and explore areas that Ethereum has not been able to set foot in.

On the other hand, we also see that on-chain data will enter the field of vision of more users in 2021. Whether focusing on DeFi smart money or tracking the funds involved in hacking incidents, more and more people are beginning to use data on the chain as a basis for judgment. As the amount of data continues to accumulate, the importance of data analysis capabilities begins to become prominent, and the data service track in the blockchain field will also attract more attention.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/oklink-annual-data-report-2021-public-chain-development-compulsory-course-embraces-defi/
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