Despite the high hopes, DeFi was not able to resist the pressure and its lockup was nearly cut. Fortunately, many protocols of DeFi have been upgraded in terms of internal mechanism under the crisis, and the neglected segments have shown amazing hidden potential during this time, such as prophecy machines and stablecoins, which have become the anchors in this “cryptocurrency disaster”.
Data changes during the crash
The total volume of locked positions (GVL), an important indicator of the scale of DeFi project usage, suffered a Waterloo drop in the crash, from a high of $128.3 billion on May 11 to $64.4 billion at one point, nearly decimated. From the current lock-up trend chart, it has slowly climbed upward to reach $83 billion position.
Looking at the lock-up volume ranking table for each type of agreement, Compound is ranked first with $8.3 billion in lock-up volume. Category-wise, Lending and DEX dominate, taking 6 and 4 seats in the top 10 lockups respectively. The biggest difference compared to last year is that BSC and Polygon chain-based protocols emerged among the top 10 lock-in protocols, and it is no longer the ethereum on-chain protocols that dominate the scene.
Looking at each vertical segment, in the DEX segment, BSC-based Mdex, PancakeSwap and Ellipsis stand out, performing well in terms of trading volume and number of transactions, and of course, old school projects such as Uniswap and Curve remain firm and always at the top; in the stable coin segment, USDT and USDC have been leading the track, but this trend is also related to its always increasing market liquidity; in the collateralized lending segment, the total amount of Aave V2 borrowing is around $5.5 billion, with a total borrowing volume of $17 billion, nearly $10 billion different from the peak of $26 billion on May 9; the prophecy machine segment contrasts with the above contracted category, which created a peak of calls on both May 19 and May 23, reaching 33,962 and 35,860 respectively. times. Among them, Chainlink has the highest percentage of calls.
Protocol Upgrade in the Changing Landscape
The external data display of Defi looks mostly very depressed, but in fact DeFi development still has a very good watchability.DeFi appeared back in 2017, when it was very insignificant, and today, DeFi has developed into a much seen area of the industry, thanks to the continuous upgrade and innovation of the underlying infrastructure of DeFi, and in such a cold market environment, it has not stopped In such a cold market environment, there is no stopping DeFi developers from developing round after round.
Take Uniswap, the leading project in the DEX category, for example, it has recently released Uniswap V3, which makes it possible to leverage greater liquidity with less locked-in capital and improve the efficiency of capital utilization by implementing the aggregated liquidity feature, which is no longer a simple one-sided performance improvement for automatic market makers, and the UniswapV3 network plans to migrate to the lay2 Arbitrum , further creating low Gas, high transactions, it is understood that in the May 19 market crash, Uniswap V3 instead created a new high of $2.62 billion in the month, while the TVL on that day was only $880 million, indicating to some extent that Uniswap V3 has basically achieved the goal of improving capital efficiency.
Compound, a leader in lending, started the layout of the DeFi cross-chain track in March this year, launching the Gateway test network, which is governed by COMP holders. Gateway is a blockchain network based on Parity’s blockchain development platform Substrate framework, which is more interoperable and application developers can build on any underlying Application developers can develop and build on any underlying blockchain network without being limited to the ethereum network. With the Gateway cross-chain tool, Compound will not just be an ethereum lending protocol, but can have its own status in the cross-chain track.
Many other protocols have also undergone version upgrades, or formed a more diverse product matrix, or looked for opportunities in popular areas. All the changes have revealed that DeFi’s entire market is no longer just focused on the simple need of liquidity, they will focus more on the hidden needs of the market, honing and building killer apps that are more suitable for the current stage of development.
DeFi potential direction may point to stable coins and prophecy machines
In addition to this, advance insight into the potential direction of the next phase of Defi will also have a better chance of capturing the first opportunity value opportunity. deFi’s popularity in the first half of this year, the biggest performance is aggregation, from the DeFi fever last August to now, the inflow and aggregation of various elements of the market, the combination of many financial innovation play, layer by layer under the nesting and bring out more new demand, the essence of the requirement is information, data Abstract more direct and concise, traffic and service entrance to form a whole process of one-stop “aggregation services”, which is the rise of various aggregation agreements this year. WebX Labs believes that in addition to the escalation of competition in protocols and public chains, the stable coin track and the hard prophecy machine track will still be the areas we need to focus on in the second half of the year.
As we mentioned above, the “stability” of stable coins and the hard demand of prophecy machines are more important in the crisis. The stable coins have shown very robust and stable characteristics, and even if there is fluctuation, it only lasts for a few seconds, which fully reflects the advantages of stable coins in “risk aversion” and value anchoring. And on May 19, the trading volume of stablecoins also set a record. The trading volume of Tether (USDT) alone exceeded $70 billion, more than both Bitcoin and Ether.
And the prophecy machine was invoked 10,000 times during this crisis. By invoking external prices fed to on-chain smart contracts, the DeFi protocol has access to all the data it needs to function properly, and he exists as middleware to communicate decentralized protocols and data external to the blockchain. what often happens is that the more transactions, the more calls the prophecy machine makes. the more MakerDAO in DeFi, the Compound, Synthetix, etc. need the price data streaming services provided by the prophecy machine, and giants like Coinbase also need the prophecy machine to provide digital currency price data for the Defi protocol, which means that the prophecy machine is already an essential tool for trading protocols and trading institutions to provide on-chain applications with a secure and reliable connection to the real world through the prophecy machine With a large number of advanced data-driven use cases that can take root on the public chain in applications such as DeFi, insurance, gaming, NFT protocols, etc., the Prophecy Machine service accelerates the convergence of the on-chain and off-chain worlds. Of course, prophecy machines are not perfect, and how to better address decentralization and data accuracy is a trade-off the prophecy machine track needs to make.
The world of blockchain has always been fast-changing, and at any time, it may be better to observe the ever-changing market from a dynamic perspective than to try to find constant rules. the value mining of DeFi follows the same logic. While focusing on stable coins and prophecy machines, we need to keep an eye on innovative inventions and discoveries in this circle.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/who-represents-defis-bottom-line-in-the-shakeout/
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