Total Value Locked

DeFi enjoys prolific start to 2023: DappRadar report

DeFi protocols have seen significant growth in total value locked in January, with Lido Finance leading the charge.

Decentralized finance (DeFi) protocols experienced a boom in total value locked across different staking pools in January. The market hit $74.6 billion worth of staked assets, increasing by 26% from December.

In its latest monthly report, DappRadar outlined the growth of the DeFi sector alongside rejuvenated nonfungible token (NFT) markets that have also had upticks in trading volume and sales.

Optimism emerges as the top DeFi performer, seeing a 57.44% increase in total value locked (TVL) at $808 million. Blockchain Analyst Sara Gherghelas told Cointelegraph that Optimism’s transaction volumes were likely driven by a “learn-to-earn” incentives program that ended midway through January.

A sudden drop in daily transactions on Jan. 17 suggests that educational incentive programs might play a role in driving DeFi adoption and onboarding, as Gherghelas explained:

“By providing a hands-on learning experience, these incentives can help users gain a deeper understanding of DeFi technologies and the potential benefits they offer, thereby driving greater adoption and usage of DeFi products and services.”

Solana saw a 57% increase in its TVL to reach $548 million, driven by Marinade Finance’s introduction of a token incentive scheme rewarding SOL depositors with liquid staking derivative mSOL. The protocol reached $152 million TVL between December and January.

It’s not all positive for the Solana ecosystem, though, with platform Everlend announcing its closure on Feb. 1, citing a lack of liquidity for shutting down its service.

Related: NFT sales topped 101 million in 2022: DappRadar report

Ethereum’s upcoming Shanghai upgrade is also driving staking in DeFi due to the expected opening of withdrawals from Ethereum staking contracts. Lido Finance flipped Maker DAO as the largest DeFi protocol in January, driven by the popularity of liquid staking derivative protocols.

According to Gherghelas, Lido’s liquid staking solutions have proven to be a major drawcard for users looking to maximize staking returns.

“What sets Lido apart from other DeFi protocols is its innovative staking solution, which allows users to access liquid Ether staking without committing to the traditional 32 ETH minimum.”

Lido saw over $8 billion worth of value staked in its platform, an increase of over 36% since December 2022. Gherghelas highlighted the recent rally in cryptocurrency markets contributing to the increase in DeFi’s TVL:

“The crypto market has been bullish, leading to an increase in investor confidence and an inflow of capital into the DeFi space.”

NFTs have also enjoyed a resurgent start to the year. Trading volume reached $946 million, marking a 38% increase month on month and the highest trading volume seen since June 2022.

Ethereum still dominates the NFT market, accounting for 78.5% of total trading volume at a value of $659 million in January. Yuga Labs enjoyed a good month, with $324 million in trading volume from its exclusive collections.

NFT collections DeGods and Monkey Kingdom helped drive a 23% increase in Solana’s NFT trading volume. Meanwhile, Polygon saw a significant 124% jump in its NFT trading volume and a total of 4.5 million NFT sales, driven in part by the Collect Donald Trump Cards.

As Cointelegraph explored at the end of 2022, unique active wallet data comparing 2022 to 2021 showed a 50% increase, with DeFi, NFTs and blockchain gaming-driven activity and trading volumes.

Lido overtakes MakerDAO and now has the highest TVL in DeFi

A Nansen in December noted that Ether staking solutions had been in high demand since Ethereum’s shift to proof-of-stake.

Liquid staking protocol Lido Finance appears to have benefited most from the Ethereum merge in September, with its total value locked (TVL) now sitting at the top position among other decentralized finance (DeFi) protocols.

According to data from DefiLlama, Lido’s liquid staking protocol now commands $5.9 billion in TVL, compared to MakerDAO’s $5.89 billion and AAVE’s $3.7 billion.

According to Lido Finance’s website, as of Jan. 2, had $5.8 billion Ether (ETH) staked. Meanwhile, there was around $23.2 million staked in Solana (SOL), $43.9 million in Polygon (MATIC), $11 million in Polkadot (DOT) and $2.2 million in Kusama (KSM).

Lido’s model allows users access to liquid Ether staking without committing to the traditional 32 ETH minimum.

Blockchain data analytics from Nansen in December noted that staking solutions such as these had been in high demand since Ethereum’s shift to proof-of-stake (PoS).

It’s report highlighted the impact of the Merge in introducing staked ETH as an out-and-out cryptocurrency-native yield-bearing instrument that has quickly outstripped other collateralized yield-bearing services.

Lido appears to have benefitted from this, as its fee revenue has been directly proportional to Ethereum PoS earnings since Lido sends received Ether to the staking protocol.

In Nov. 2022 that Lido said it has been collecting $1 million in fees every day since Oct. 2022.

Related: 5 altcoin projects that made a real difference in 2022

Meanwhile, the governing body of the Maker protocol MakerDAO saw its revenue decline to just over $4 million in Q3, a 86% plunge from the previous quarter, according to a Messari statement in Sept. 2022, citing few liquidations and weak loan demand as the reasons for the decline.

In that same month, Lido held the most amount of staked ETH among DeFi, with 31% according to Nansen in September, which is a significant amount compared to major crypto exchanges Coinbase and Kraken, holding 15% and 8.5%, respectively.

DeGods and Y00ts NFTs are bridging off Solana. Here’s why

The migration of Solana’s top two NFT projects to Polygon and Ethereum is set for the first quarter of 2023 on an opt-in basis.

Nonfungible token (NFT) firm Dust Labs is migrating its two top-performing Solana NFT projects — DeGods and y00ts — onto Ethereum and Polygon in a bid to expand their adoption. 

The news was announced on DeGods and y00ts Twitter page on Dec. 25, with both NFT projects expected to be officially bridged onto Ethereum and Polygon respectively in the first quarter of 2023.

Rohun Vora — the creator of DeGods and y00ts who is known by the alias Frank III — said the decision was made to “explore new opportunities” and to allow for the continued growth of the collection. The move will also see the DUST token — used to buy, sell and mint NFTs on the DeGods ecosystem — also be bridged onto Ethereum and Polygon.

Vora confirmed that two NFT projects will still remain on Solana for the time being, and in a separate post responding to a Twitter user, confirmed that the bridge/migration will be owner “opt-in.”

During a Dec. 26 Twitter spaces, Vora explained to 66,000 listeners that it was simply a matter of getting the NFT projects on the platforms that he sees will drive the next wave of NFT adoption.

In his reasoning, he made parallels to the intense battle for intellectual property (IP) between streaming services such as Netflix, Disney Plus and HBO Max — suggesting that the streaming service that secures the best IP will ultimately win the lion’s share of viewers, which then attracts better projects.

“They’re trying to get the best IP on their streaming services because that IP is ultimately going to drive the growth on that platform.”

“Once you get enough IP on the platform it becomes a virtuous cycle, people want to be on Netflix because that’s just the brand and the place to be,” he added.

He said a similar battle is playing out between different blockchains that are trying to build the best NFT platforms, noting that as NFTs are driven by attention, there is an opportunity for “virtuous cycles” that would create a network effect for NFT projects.

From there, “the metrics, the volume and the liquidity will follow that,” he added.

Vora said his bullish view on Polygon for NFTs was influenced by the fact that Disney, Adidas, Nike and Reddit chose Polygon as their NFT platform of choice.

Vora also said that he had received grant offers from many other platforms, most of which were much larger than what was offered by Polygon, but Polygon provided y00ts with the best opportunities moving forward.

“Polygon by far was one of the lowest, if not the lowest in terms of dollar value, but we went with Polygon because we see a lot of opportunity on a strategic level and that’s what excites me and should excite you holders more than anything.”

Related: Solana TVL drops by almost one-third as FTX turmoil rocks ecosystem: Finance Redefined

The news has only added to the growing list of concerns for Solana, which has seen the total value locked (TVL) on the ecosystem fall 97.88% from a peak of $10.17 billion to $215M at the time of writing, according to decentralized finance data aggregator DefiLlama.

Solana co-founder Anatoly Yakovenko shared his “bittersweet” feeling on the news that the NFT projects would no longer “100% focus on Solana” to his 223,600 Twitter followers on Dec. 26, but accepted the “reality” that these projects want to expand their reach.

But controversial figure Ben “Bitboy” Armstrong and a fair share of his 1 million Twitter followers weren’t so optimistic on Solana’s future, with 70% of 11,881 voters in a poll voting “Yes” to “Is Solana dead.”

According to DappRadar, both the y00ts and DeGods NFT collections are ranked first and second in  terms of fiat transaction volume on Solana over the last 30 days.

DeGods and Y00ts NFTs are bridging off Solana: Here’s why

The migration of Solana’s top two NFT projects to Polygon and Ethereum is set for the first quarter of 2023, on an opt-in basis.

Nonfungible token (NFT) firm Dust Labs is migrating its two top-performing Solana NFT projects — DeGods and y00ts — onto Ethereum and Polygon in a bid to expand their adoption. 

The news was announced on DeGods and y00ts Twitter pages on Dec. 25, with both expected to be officially bridged onto Ethereum and Polygon, respectively, in the first quarter of 2023.

DeGods and y00ts creator Rohun Vora, known by the alias Frank III, said the decision was made to “explore new opportunities” and to allow for the continued growth of the collections. The move will also see the DUST token — used to buy, sell and mint NFTs on the DeGods ecosystem — also be bridged onto Ethereum and Polygon.

Vora confirmed that two NFT projects will still remain on Solana for the time being. In a separate post responding to a Twitter user confirmed that the bridge migration will be owner “opt-in.”

During a Dec. 26 Twitter spaces, Vora explained to 66,000 listeners that it was simply a matter of getting the NFT projects on the platforms that he sees will drive the next wave of NFT adoption.

In his reasoning, he made parallels to the intense battle for intellectual property (IP) between streaming services such as Netflix, Disney Plus and HBO Max — suggesting that the streaming service that secures the best IP will ultimately win the lion’s share of viewers, which then attracts better projects:

“They’re trying to get the best IP on their streaming services because that IP is ultimately going to drive the growth on that platform.”

“Once you get enough IP on the platform it becomes a virtuous cycle, people want to be on Netflix because that’s just the brand and the place to be,” he added.

He said a similar battle is playing out between different blockchains that are trying to build the best NFT platforms, noting that as NFTs are driven by attention, there is an opportunity for “virtuous cycles” that would create a network effect for NFT projects.

From there, “the metrics, the volume and the liquidity will follow that,” he added.

Vora said his bullish view on Polygon for NFTs was influenced by the fact that Disney, Adidas, Nike and Reddit chose Polygon as their NFT platform of choice.

Vora also said that he had received grant offers from many other platforms, most of which were much larger than what was offered by Polygon, but Polygon provided y00ts with the best opportunities moving forward:

“Polygon by far was one of the lowest, if not the lowest in terms of dollar value, but we went with Polygon because we see a lot of opportunity on a strategic level and that’s what excites me and should excite you holders more than anything.”

Related: Solana TVL drops by almost one-third as FTX turmoil rocks ecosystem: Finance Redefined

The news has only added to the growing list of concerns for Solana, which has seen the total value locked on the ecosystem fall 97.88%, going from a peak of $10.17 billion to $215 million at the time of writing, according to decentralized finance (DeFi) data aggregator DefiLlama.

Solana co-founder Anatoly Yakovenko shared his “bittersweet” feeling that the pair of NFT projects would no longer “100% focus on Solana” to his 223,600 Twitter followers on Dec. 26 but accepted the “reality” that these projects want to expand their reach.

But controversial figure Ben “Bitboy” Armstrong and a fair share of his 1 million Twitter followers weren’t so optimistic about Solana’s future, with 70% of 11,881 voters in a poll voting “Yes” to “Is Solana dead.”

According to DappRadar, both the y00ts and DeGods NFT collections are ranked first and second in terms of fiat transaction volume on Solana over the last 30 days.

Trader Joe takes its first step into the Ethereum ecosystem

Despite the new multichain vision, the Trader Joe team confirmed that its “true home” and “top priority for all growth efforts” will continue to be on Avalanche.

Decentralized finance (DeFi) protocol Trader Joe has announced its very first expansion from Avalanche and onto the Ethereum ecosystem as part of its plans to access new markets and drive up user activity.

The decentralized trading platform announced its “multi-chain” expansion into Ethereum layer-2 scaling solution Arbitrum One on Dec. 1 and follows around a month after it stated its intention to expand to additional markets and ink new partnerships amid falling TVL and user activity in the third quarter.

The team stated that they’re working closely with Offchain Labs — the team behind Arbitrum One — to launch a testnet “within the coming days,” before officially deploying it onto the Arbitrum One mainnet in January 2023:

“Deployment to Arbitrum One is the next step in this global expansion effort and we look forward to introducing the innovative AMM built on Avalanche, and also working with new partners to benefit the collective DeFi ecosystems of Arbitrum and Avalanche.”

The deployment comes as Trader Joe has also expanded its ecosystem through partnerships and integrations with wallets, data clients and other vectors” since the second quarter as a means to spread the exposure of Avalanche and the Trader Joe itself.

Among the most notable recent partnerships include that of Trust Wallet and Crypto.com.

Trader Joe added that the protocol’s original automated market maker (AMM) — Joe V1 AMM — would also move onto Arbitrum One in addition to the Liquidity Book AMM, which will bring “zero slippage trades and discretized liquidity provisioning to all Arbinauts.”

As for why Trader Joe chose to deploy its AMMs on Arbitrum One, the team said they were impressed by Offchain Labs’ efforts in building an ecosystem of DeFi protocols on the network, which is indicative of its 53.4% market share in total value-locked (TVL) across all Ethereum layer-2 scaling solutions.

“Deploying (the) Liquidity Book will be a great addition to the vibrant ecosystem,” the team added.

Image shared by Trader Joe regarding its recent Arbitrum expansion. Source: Joe Content.

Despite announcing that it was “time to go global” on Crypto Twitter, the Trader Joe team confirmed that its “true home” and “top priority for all growth efforts” will continue to be on Avalanche.

Trader Joe also clarified that its token, JOE, in addition to lending platform Banker Joe, nonfungible token (NFT) marketplace JoePegs and its staking platform would not join Liquidity Book AMM and Joe V1 AMM on Arbitrum “in this initial phase.”

Related: New fix for curse of impermanent loss proposed on Avalanche

The announcement appears to have a positive impact on the price of JOE, which increased 13.35% from $0.163 to $0.185 over an eight-hour period before cooling off to $0.179, according to data from CoinGecko.

Trader Joe is currently the top-ranked decentralized exchange (DEX) and third-ranked DeFi protocol on Avalanche with $94.13 million in TVL, trailing only Ethereum-native lending platform AAVE and Avalanche-based liquid staking provider Benqi, according to data from DeFi aggregator DefiLlama.