Total Value Locked (TVL) in DeFi Surpasses $100 Billion; Revenue is Ready to Hit $1 Bln

Total Value Locked (TVL) in DeFi Surpasses $100 Billion; Revenue is Ready to Hit $1 Bln

Decentralized finance (DeFi) continues to grow at a fast pace, with more and more value getting locked up in the applications.

Today, the total value locked (TVL) in them has surpassed a whopping $100 billion, as per DeFi Llama. While DeFi Pulse currently shows just above $50 billion, it covers about half of the projects listed by DeFi Llama.

Lending protocol, Compound Finance, dominates the DeFi TVL with over $10 billion.

Interestingly, the sector’s real growth started only last summer when yield farming drew in the crowd with exceptionally high APYs. At the beginning of 2020, the TVL was a mere $675 million and about $20 billion at the start of this year.

Today, there are nearly 25 DeFi projects with more than $1 billion in TVL.

The growth of DeFi intensified this year as other blockchains like Binance Smart Chain (BSC) provided users, particularly smaller ones, with a cheaper alternative to Ethereum (ETH). As of writing, BSC has about $27 billion in TVL.

Much like TVL, DeFi’s other metrics recorded similar growth, including the users who are aiming to hit the 2 million threshold after hitting the 1 million milestone only in early December, as per Dune Analytics.

Before the 2020 summer, only a handful of people were using DeFi projects, but today Uniswap (UNI) alone has nearly 1.3 million users. Meanwhile, Compound (COMP), 1inch (1INCH), Kyber (KNC), Balancer (BAL), and SushiSwap (SUSHI) all have between 100k to 300k users.

As more and more people come into the space and use these applications, the cumulative revenue of these protocols is also increasing, now aiming for $1 billion.

Popular DEX Uniswap yet again leads with more than $90 billion in revenue, up from just $4 million in July 2020. Other notable revenue generators include Compound, SushiSwap, and Aave earning between $30 to $40 billion.

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Author: AnTy

Fei Stablecoin’s ‘Protocol Controlled Value’ Penalizes Those Wanting Their ETH Back

Fei Stablecoin’s ‘Protocol Controlled Value’ Penalizes Those Wanting Their ETH Back

The project’s genesis was a success with 639,000 ETH committed and $1.3 billion FEI minted. But with little demand for FEI right now, people are running for the exit, which has consequences.

Fei Labs, the firm behind the new stablecoin project Fei Protocol, raised 639,000 ETH for its token generation event and minted $1.3 billion FEI.

The firm shared over the weekend that more than 17,000 unique addresses participated in the event, which can now redeem FEI and the project’s proposed governance token TRIBE, based on the ETH committed.

The event led the FEI-ETH pair to become the largest pool Uniswap on Saturday, and the pre-swap of $385 million FEI for TRIBE was probably the largest ever AMM swap, said the Fei Labs.

Liquidity on the largest DEX, Uniswap, also went past $8 billion on April 4th, up from $5.35 billion at the beginning of the month, thanks to this.

The project’s official website mentions Coinbase, Andressen Horowitz, Nascent, Framework, Variant, and Buckley Ventures as its investors.

Demand for stablecoins continues to rise, and in the DeFi ecosystem, they have become a staple. But the most popular ones, fiat-collateralized USDT and USDC, have a critical flaw of being centrally controlled while crypto-collateralized DAI has scalability issues, said the team in its introduction of the project earlier this year.

As such, the stablecoin FEI uses a “Protocol Controlled Value” to maintain its $1 peg. Currently, it is at $0.948, as per CoinGecko. The governance token is meanwhile trading at $2, down from the opening price of $3.18.

image2

Source: @jonwu_

In the experimental stability mechanisms to maintain its peg, Fei uses direct incentives, which are seen as a fairer and more capital efficient and decentralized approach to managing the stablecoin.

Here, both trading activity and usage of the stablecoin are incentivized where rewards and penalties drive the price towards the peg. The team says,

“FEI’s stability mechanisms are geared towards long-term holding. TRIBE governance is responsible for the peg and can adjust the incentives above as needed.”

The community, however, isn’t really confident of the project’s choice of innovation with the mechanism. Jon Wu noted,

“You thought you were buying a dollar for 50 cents, but instead, you paid $1.01 only to get $0.95, and now if you try to sell it, you’ll end up with $0.60.”

image1

Source: @SamKazemian

Messari’s Ryan Watkins said,

“The issue with FEI right now is most people want to sell it back for ETH, but doing so incurs extreme penalties. Eventually, Fei will re-weight to bring FEI back to its peg, but then what? There’s little real demand for FEI, and most are still running for the exits.”

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Author: AnTy

“Dark Horse”: BNT Burn Is Around the Corner As A Swiss Bank Embraces Bancor

Bancor, the automated market maker, accounting for 5% of the decentralized exchange (DEX) volume, saw its TVL (total value locked) doubling to $1.66 billion and breaking into the top 10.

Maker is at the top spot with more than $7 billion in TVL, followed by Compound and Aave at $6.7 billion and $5.17 billion, respectively, as per DeFi Pulse.

The DeFi project is now planning to have phase two of Vortex out by introducing a flat protocol fee that uses swap fees to buy and burn vBNT. Each vBNT represents a BNT token locked in the protocol forever, which will create upward pressure on price. 5% of swap fees will be used for this.

The token BNT is currently trading around $7.82, up more than 500% YTD.

The full Vortex roll-out is expected to be done in the next two weeks.

On Thursday, Bancor’s Twitter account posted another development, a Swiss private bank Maerki Baumann with over $9 billion in assets under management, is now accepting BNT along with other cryptocurrencies including BTC, LTC, ETH, BCH, XRP, and USDT.  And just recently listed a poll on their Twitter asking which crypto should be next, with options of Polkadot (DOT), Uniswap (UNI), Cardano (ADA), or Stellar Lumens (XLM). The bank offers both trading and custody services.

“The ability to participate in DeFi through a bank may be closer than we think,” read the tweet.

Give The Market Leaders A “Run For Their Money”

According to Deribit’s latest market research, Bancor is a “dark horse” which, despite Uniswap’s success and rise of similar competitors, continues to iterate on its original product.

“With the Bancor v2.1 release in Oct 2020, the combination of single-sided liquidity provision and IL insurance seemed to be the USP needed to make a breakthrough in the fiercely contested DEX arena,” it said.

Bancor’s new model is facilitated by a new elastic BNT supply mechanism d, which brings BNT burn into the picture. Elastic BNT supply also creates the possibility of protocol IL insurance.

Through its origin pools, shadow token stablecoin pools, Layer 2 scaling, cross-chain expansion along with UI overhauls and additional improvements in on-chain governance (gasless voting), Bancor can give the market leaders Uniswap & Sushiswap “a good run for their money.”

This research on Deribit came from members of DeFi investment fund DeFiance Capital, which took a position in BNT. They will be used to provide liquidity and earn yield from swap fees and liquidity mining.

“Extremely excited to support Bancor as one of the most interesting and innovative AMM liquidity protocols in this space,” said Arthur of DeFianceCapital.

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Author: AnTy

Israeli Asset Manager Invests $100 Million in Bitcoin via GBTC

“A little intimidated” by the speed at which BTC gained in value, the firm has already sold one-third of its holdings after doubling its investment. Now holds $150 million GBTC shares.

Altshuler Shaham Investment House, an Israeli asset manager, invested $100 million in Bitcoin by purchasing the shares in the Grayscale Bitcoin Trust (GBTC) late last year, reported a local publication.

At the time, Bitcoin was trading around $21k; since then, the crypto asset has soared to a new ATH at $58,350.

Grayscale Investments is the world’s largest asset manager with north of $40 billion in AUM.

One of the largest investment managers in Israel, Altshuler Shaham, already sold some of its stake in early February when BTC price was around $40k, as co-CEO Gilad Altshuler said his group was “a little intimidated” by the speed with which bitcoin gained in value.

The price of Bitcoin has appreciated more than 13.5x in value since its March low, becoming a trillion-dollar asset. Still, the fund was able to double its investment before selling about a third of it. He said,

“This is a new investment for us. It took a few months until we got all the relevant approvals and all the opinions that approved our investment in the field.”

This is the first time an Israeli institutional body gained Bitcoin exposure. Altshuler Shaham had over $50 billion in assets in long-term savings associates’ accounts – provident funds and pension funds as of the end of January.

Currently, the company holds $150 million GBTC shares. As for increasing this investment, Altshuler said, “It depends on the price.”

Meanwhile, investment company Altshuler Shaham Horizon, a subsidiary of Altshuler Shaham, is looking to expand into the cryptocurrency market.

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Author: AnTy

EY Heads to Court to Dispute the Value of Crypto From Bankrupt Exchange, QuadrigaCX

EY Heads to Court to Dispute the Value of Crypto From Bankrupt Exchange, QuadrigaCX

Ernst and Young (EY), the bankruptcy trustee for collapsed cryptocurrency exchange QuadrigaCX, plans to evaluate the company’s assets and settle disputes before disbursing creditors and users of the crypto exchange.

EY will be going to court on January 26 to propose a date for accessing the claims for crypto assets rather than the date of the exchange’s bankruptcy on April 15, 2019.

The trustee is not taking the same stance as cryptocurrency startup BlockCAT, one of the creditors.

BlockCAT made CAR $4 Million Claims

The date’s choice may have a big impact on the fiat value of the funds that creditors are expected to receive from the remaining asset pool. BlockCAT has already filed a compensation claim of about CAD 4 million. The crypto startup has filed a petition and is looking to maximize payouts.

According to the firm, the actual evaluation date for users’ cryptocurrency claims should begin with the initial court order for the exchange and not a separate date proposed by its trustee.

The decision of the court regarding the date will be significant for both the creditors looking for disbursement in fiat currency and the former users of the exchange who are making claims for crypto assets.

After QuadrigaCX went on liquidation, CAD$ 224 million was made in claims by 17,053 users. However, the claims could be totaling CAD$291, depending on the date chosen for the asset valuation.

The trustee is expected to make sure claims made are properly disbursed before the exchange is finally dissolved. However, the court needs to decide on a valuation date before any payment process begins.

The problem is now the date of valuation, as BlockCAT asks for an earlier valuation date while the users are of a different opinion. BlockCAT wants to maximize its payout from the asset pool, as it seems the exchange’s remaining assets will not be enough to settle all claims.

Creditors and Users Disagree on the Payment Date

The main issue the trustee needs to settle before commencing disbursement is the disagreement between the creditors and the users on the date for claim settlement. While the creditors predominantly have fiat money claims, the former users of the exchange have cryptocurrency claims.

The trustee will be paying out claims made for U.S. dollars and cryptocurrency in Canadian dollars. This means that the court has to choose the right valuation date before disbursement.

Concerning the problem, the trustee filed a factum (statement of facts) at the Ontario Superior Court of Justice to receive approval to use the exchange rate on the conversions’ bankruptcy date. With the value of many crypto assets rising far beyond expectations since 2019, when the exchange was declared bankrupt, the trustees could pay hefty sums to use the current valuation.

Evans Thomas, the commercial litigator, said a reimbursed user based on the 2019 crypto conversion might receive 23% less than the actual present value. However, if BlockCAT succeeds in convincing the court to use the February date for payments, the asset pool’s share to be paid to the affected users in CAD claims will rise.

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Author: Ali Raza

Gold Is Trashed As USD Regains Strength; Will Bitcoin Hold Onto its Gains?

The traditional safe-haven asset has lost 5.6% of its value in three straight days of losses. The digital gold is still strong above $41k but the market needs to pay attention to the macro environment to see if USD gains take its toll.

Today, gold lost 3.14% of its value while USD gained some strength to move above 90 and Treasury yields made some recovery.

The yellow metal had a good couple of days entering into 2021 as it jumped back above $1,900, but it hasn’t been long that the bullion went down again.

Today the third day in a row that the precious metal has been going down, losing 5.6% of its value since Wednesday.

“It is the first week of January and the staying power for positions tends to be low so moves can get exaggerated,” Tom Fitzpatrick, a Citigroup’s technical strategist, told Bloomberg. Fitzpatrick has been the one that predicted a $318,000 BTC target.

The weakness in gold coincides with the greenback bottoming at 89.2 on Jan. 6 to find its way back above 90 after 10 days.

“Gold and metals getting trashed. The dollar incredibly bottomed on the elections … should have gone down, but didn’t. Rates behaved as expected, but the dollar turned,” noted trader and economist Alex Kruger.

Pay Attention

Unlike gold, the stock market continued its uptrend amidst the growing speculation on further stimulus but despite a sharp slowdown in US hiring.

With the U.S. President-elect Joe Biden getting full control of Congress after the two Democratic wins in Georgia’s Senate runoffs this week, the expectation for more stimulus and higher spending on economic reconstruction has been bolstered.

Bitcoin has also been making strong moves, with this week being yet another wild one for BTC in which the cryptocurrency went from $29,000 on Monday to nearly $42,000 today.

However, trader TheCryptoDog suggests to “pay attention to the macro environment,” adding, “Is the Fed really going to continue such wanton debasement of the dollar?”

Kruger also feels that “If this dollar trend were to continue for much longer it will likely take its toll on bitcoin.”

“This parabolic move upwards, with normally staid Wall Street firms including JP Morgan calling $146,000 as their price target for Bitcoin, and Guggenheim called $400,000, feels like it has a long way to go before exhausting,” is what Guy Hirsch, managing director for the U.S. at eToro believes. “It wouldn’t be all that surprising to see $100,000 at some point this year, given the current momentum.”

While making these new highs every day, Bitcoin has been time and again giving small pullbacks, only to make these daily tops support the very next day for another push higher.

But the market believes that despite being in this new paradigm, “brutal retracements are still possible.”

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Author: AnTy

DeFi ‘Monster’ Aave is Ready for the Next Phase of Adoption

DeFi assets are back to uptrending as Bitcoin and ETH continue to explode higher. The total value locked in decentralized finance is also rising, reaching $14.2 billion.

Market participants are excited by the latest developments put out by DeFi heartthrob Andre Cronje, the creator of Yearn.Finance who is constantly putting out collaborations with more and more DeFi projects. Cronje shared,

“I have so much more planned for when v2 launches, custom money markets (yield & insurance), Cream will be a lending reserve into Aave, agnostic Cover for all aTokens, and we can finally put ytrade, yleverage, and leveraged stable coins into production.”

This has been in response to Aave founder and CEO Stani Kulechov’s tweet where he shared that the popular DeFi project has already been working with Cronje since the beginning of this year. Kulechov added,

“The recent collaborations with @iearnfinance are IMO positive sign for DeFi. All DeFi protocols should work towards cross composability.”

Not just this, the project has also achieved a big milestone in the form of processing over $1 billion in flash loans since launching in January.

All of this certainly got the community excited, and AAVE jumped over $76.5, up nearly 170% from about $28 earlier this month.

To trader @SmartContracter, AAVE is a “monster,” which he believes is “going to blow BTC out of the water in terms of performance in 2021.”

Next Phase for DeFi

Another news came in the form of Copper, an institutional custody provider announcing the launch of CopperConnect, the first-ever DeFi tool for crypto institutions.

With this service’s help, an institution can effectively contribute to a decentralized pool of assets and earn passive income on that.

With unaudited DeFi projects decreasing, the fluctuation in the value of the market has been less dramatic, making the risk now more manageable for sensations, which as a result has “led to high demand from institutional crypto investors for secure ways to gain exposure to the DeFi marketplace.”

“In recent months, we have seen a significant increase in the number of institutions looking to deposit liquidity onto our project. However, to date, institutions have not had the tools available to comply with their exacting risk management rules,” said Kulechov.

To satisfy this demand, Copper provides the safety of assets throughout the DeFi lifecycle, which will help the AAVE project gain institutional adoption.

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Author: AnTy

Interest in DeFi Falls to Pre-Mania Level, Uniswap Volume on a Decline Despite CEX’s Issue

The DeFi market continues to see strong growth, with the total value locked (TVL) in the sector above $11 billion. While a record of almost 160k BTC is locked in DeFi, the locked Ether is also approaching the peak at 8.7 million ETH.

The mid of June was the “turning point” for DeFi finance, as per LunarCRUSH’s report confirmed by Google Trends when a steady upward trend in the US searches for the term DeFi was seen, which peaked in August only to fall sharply in September.

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Interest in term DeFi over time, Source: GoogleTrends

But the current scenario could further accelerate this growth.

The ongoing investigation into popular crypto derivatives platform BitMEX, and now issues at OKEx is likely to spur on further flow out of CEX and into DEX venues.

Already, as we reported, the trading volume on decentralized exchanges has rushed to new high thanks to DeFi and yield farming hype in Q3.

Monthly trading volumes for top 10 DEX increased 700% from July to $30.4 billion in Sept. while CEXs recorded $300 billion, the same as the previous month. The market share of DEXs that continues to increase is expected to grow further, that too, at the expense of CEXs.

The most popular DEX, which accounts for more than 60% of the volume, is Uniswap. The hottest trading platform was launched less than two years back and raised millions from venture capitalists, including Paradigm, Andreessen Horowitz, and Union Square Ventures LLC.

In the overall crypto space, it is the fourth-biggest exchange after Binance, OKEx, and Huobi. Paul Veradittakit, a partner at California-based Pantera Capital Management LP, which is considering investing in Uniswap’s governance tokens UNI said,

”It’s just phenomenal. We can really see decentralized exchanges make a huge dent in the market and potentially overtake centralized exchanges.”

Since dropping to half a billion dollars after its clone SushiSwap sucked the liquidity, the liquidity on Uniswap has been surging, surpassing $3 billion on Thursday. However, it is currently averaging a daily trading volume of $220 million, on a constant decline from Sept. 1st’s ATH of nearly a billion dollars.

Uniswap Volume
Source: Uniswap Info

It is rather a blessing for crypto projects as Uniswap, which generates revenue through transaction fees, doesn’t charge the issuers to list new tokens. Users don’t have to provide documents for KYC or AML measures as required by traditional crypto exchanges because of regulatory pressure.

Trading on Uniswap also means a bigger market to trade as it currently has 845 tokens listed while the leading spot exchange Binance only has 820 coins.

However, while Binance had over 15 million users at the end of last year, Uniswap is used by only 50k to 100k people, Kyle Samani, co-founder of crypto hedge fund Austin, Texas-based Multicoin Capital Management told Bloomberg. He said,

“This competition is just getting started. We are in the first inning.”

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Author: AnTy

PwC: “Large Crypto Unicorns to Become Increasingly like ‘Crypto Octopuses'”

The value of the M&A’s in the cryptocurrency world saw strong growth this year as it exceeded the total of 2019 just in the first six months of 2020, according to PwC’s latest report on the crypto merger, acquisition, and fundraising landscape.

Compared to last year’s $481 million, the first half of this year recorded $597 million in global deal value as tie-ups became less frequent but bigger.

In the first half of 2020, there were 60 tie-ups versus 125 in the whole of 2019, said PwC.

However, activity continues to shift away from the US as the volume in Asia-Pacific and Europe, the Middle East, and Africa was 57% compared to 51% last year.

The biggest deal of 2020 was made by Binance Holdings, which purchased CoinMarketCap for $400 million. PwC Crypto Leader Henri Arslanian said,

“We expect crypto M&A activity to remain strong for the coming months particularly with some of the larger or more profitable players acquiring firms that offer ancillary services to their current offerings.”

“We should expect the large crypto unicorns to become increasingly like ‘crypto octopuses’ by acquiring or investing in various ancillary businesses in order to remain dominant.”

Digital asset manager CoinShares also anticipates the materialization of a “more robust M&A market” but says significant industry consolidation is likely to come first to clean up the market fragmentation.

According to them, crypto companies need to demonstrate the ability to generate recurring revenue and stable cash flow, consistent delivery on growth metrics, low margin volatility and above-average margins, low revenue concentrations, and low founder involvement.

According to PwC, the first of the year also saw a spike in fundraising involving trading companies or cryptocurrency exchanges, which has been attributed to the rising digital asset prices, greater regulatory clarity, and increased institutional interest.

2020 saw legendary investor Paul Tudor Jones putting money in crypto, boosting demand from bigger players and MicroStrategy and Square making bitcoin a part of their Treasury.

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Author: AnTy

YFI Plunge Might be Over After Record Number of Addresses Unload All their Tokens

In the past three days, the DeFi darling YFI has lost more than 36% of its value, going from $34,400 to $21,950 today.

At the time of writing, the 28th largest cryptocurrency with a market cap of $719 million, has been trading over $23,900, slightly in the red.

The governance token of Yearn.Finance has been plunging recently, which in part, is because of over 55% uptrend it experienced before that. Just this month, the token also hit a new all-time high of $43,678, and after such a peak, a correction is to be expected.

Moreover, the DeFi ecosystem at large hasn’t recovered from the losses yet, following the rally it has been recording from the past few months.

So, YFI is not alone in these losses; as a matter of fact, many like bzrx, SWRV, CRV, UMA, and MLN are down 60% to 85% in the past 30 days.

However, for YFI, there is an additional driver behind the downtrend.

As we reported, Eminence.finance was launched and exploited to drain $15 million, all within a few hours of the project getting in the limelight.

The unannounced and unaudited project was Yearn.Finance founder Andre Cronje’s creation.

Trader and economist Alex Kruger, who has been a YFI bull, revealed that he no longer holds any YFI as he took the profit. “My assessment made on the fly indicated YFI could crash. When shit hits the fan, it usually pays to react fast and hit it,” he said.

He further said trust in founder matters and “Cronje simply made the YFI trade more difficult.”

Kruger wasn’t alone in that given that on Sept. 29, with a 16% drop in price, the number of addresses that transferred out all their tokens and have zero balance reached its highest number ever at 1.72k addresses, as per IntoTheBlock.

In the EMN debacle, not only YFI’s communications lead was involved in promoting the project, but Cronje himself also retweeted Eminence.Finance’s ambiguous tweets.

“EMN is a Yearn product, contract deployed by Yearn #2 Blue muppet, a Yearn team member, shills EMN #3 Cronje talks surprise launches #4 Cronje promotes eminencefi while people buying EMN #5 EMN exploited, everyone gets rug pulled.”

To Cronje’s credit, the crypto community voted to be surprised by the project launch!

In the end, Degen investors might have learned a few things here, especially not to go all rushing-in in barely researched or audited projects.

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Author: AnTy