August 2024 DeFi Landscape: On-Chain Data Insights

6 min readAug 16, 2024

In today’s newsletter, we present the Decentralized Finance (DeFi) landscape as of mid-August 2024, with a primary focus on the on-chain data of various DeFi branches. As illustrated by the Kaito mindshare below, the Web3 space is currently dominated by Memecoins and AI-related projects, with DeFi trailing behind.

Total Value Locked (TVL)

Total Value Locked (TVL) is an indicator used to assess the scale of adoption of a DeFi project by calculating the total value (USD) of all assets locked in the corresponding smart contracts. As of mid-August, the category with the highest TVL is Liquid Staking, with $43.7 billion, followed by Lending at $31.5 billion, and Decentralized Exchanges (DEX) at $17.3 billion.

Ethereum remains the blockchain with the highest TVL, exceeding $50 billion, while Solana has close to $5 billion. Although the overall trend compared to 2023 is still upward, there has been a decline in TVL since the beginning of June, from over $75 billion to around $60 billion, representing a decrease of approximately 20%. It’s important to note that the current TVL is over two times lower than it was in November 2021.

Stablecoins

In mid-May, in our previous newsletter available here, we provided a detailed discussion on the mechanics of stablecoins. Since then, we have not observed any significant market fluctuations. USDT remains the market leader, recording steady growth and currently holding a market cap of approximately $116 billion.

Distribution of USDC by Categories (EOA — Externally Owned Accounts)

Since May 31, 2024, PayPal USD (PYUSD) has been available on the Solana network, as announced at Consensus 2024. This integration capitalizes on Solana’s rapid transaction finality and low costs, providing users and developers with the ability to make payments that settle within seconds. Sheraz Shere, General Manager of Payments at the Solana Foundation, emphasized that Solana’s speed and scalability make it an ideal platform for global financial institutions like PayPal to develop accessible, cost-effective, and instantaneous payment solutions. PYUSD can be accessed through PayPal, Venmo, Paxos, Crypto.com, and Phantom, with fee-free transfers available between PYUSD on Ethereum and Solana. PYUSD on Solana is issued by Paxos Trust Company.

As of August 15, the total market capitalization of PayPal USD stands at $767.47 million, with a circulating supply of 418.67 million on Solana (SOL) and 348.94 million on Ethereum (ETH).

DEXs

As of August 14, 2024, Uniswap holds nearly a 40% share of DEX volume; however, the current volume level remains lower than in 2021. For Solana DEXs, Raydium and Orca dominate with volumes of $5.8 billion and $4.5 billion, respectively. We observe that since the beginning of 2024, the majority of new tokens are being created on Solana — approximately 100,000 per week, with a total between 130,000 and 140,000 in recent weeks. Additionally, there is a steady upward trend in the proportion of trade volume from DEXs compared to CEXs, for both Futures (6.72%) and Spot (12.44%) markets. The Telegram Bot has shown stagnation in volume over the past few weeks, which is approximately half the value recorded in June and Q1 2024.

DEX to CEX Spot Trade Volume (%) — (August 14, 2024–12.44%)

DEX to CEX Futures Trade Volume (%) — (August 14, 2024–6.72%)

Since its launch in March, during the early stages of the memecoin mania, Pump.fun, which simplifies the process of launching a token at a cost of 0.02 SOL, has consistently attracted high interest. The cumulative number of tokens has surpassed 1.77 million, and the platform’s daily revenue reached a record high of over $5.5 million short after Elon Musk’s conversation with Donald Trump. The highest Pump.fun Generated Token Volumes on DEXs have been on Raydium, reaching nearly $6.7 billion in the last 30 days.

Pump.fun Daily Revenue — (August 13, 2024–5.33m)

Liquid Staking

Ethereum introduced staking in December 2020 with the ETH Staking Deposit Contract. However, until the Shanghai upgrade in April 2023, users couldn’t access their staked funds, leading to liquidity issues. Liquid Staking Derivatives (LSDs) were created to address this, allowing users to deposit ETH and receive a synthetic asset that can be freely traded or used as collateral in DeFi, without sacrificing yield. This innovation enables ETH staking without complex infrastructure or the need to lock up 32 ETH.

For several months, Lido has sustained its position as the undisputed leader in Liquid Staking, with a Total Value Locked (TVL) exceeding $25 billion. However, in the past month, there has been a notable decline in the weekly activity of unique addresses, especially in relation to Ether.fi.

Lending

Since March, Aave has held a clear lead in terms of Total Value Locked (TVL), exceeding $10 billion and establishing itself as the leader in the lending sector. In August, despite being only halfway through the month, we have recorded the second-highest value of Ethereum Lending Liquidations.

Bridges

Since mid-May, we have observed a significant decline in the volumes generated by the entire Bridges sector. Currently, the Arbitrum Bridge ranks first, recording nearly $40 million in daily volume. zkSync Bridge has also experienced substantial decreases in various metrics over the past few months.

Restaking

Since the end of last year, Eigenlayer has been the leader in the DeFi restaking segment, with a TVL of just under $15 billion. After many months of positive net flows, recent weeks have shown outflows from Eigenlayer.

Daily Share of Unique Active Restaking vs Regular Staking Validators

Conclusion

As illustrated by the on-chain data presented in the above newsletter, we can observe that despite recent market fluctuations, protocols within the DeFi sector have not faced significant solvency issues. While there is noticeable stagnation and even a downward trend, the overall trajectory remains upward compared to the previous year.

Sources

Risk Disclaimer:

insights4.vc and its newsletter provide research and information for educational purposes only and should not be taken as any form of professional advice. We do not advocate for any investment actions, including buying, selling, or holding digital assets.

The content reflects only the writer’s views anda not financial advice. Please conduct your own due diligence before engaging with cryptocurrencies, DeFi, NFTs, Web 3 or related technologies, as they carry high risks and values can fluctuate significantly.