DeFi TVL changes and blockchains begin to specialize

ICYMI: Check out DoD’s March Deep Dive from last week, “Has DeFi innovation stalled? Or worse, is DeFi dead?”

A not too surprising DeFi market share chart from Token Terminal, showing barely any movement in market share for major DeFi protocols. We should note this does not include TVL on Solana, Terra, Cosmos or other non-EVM based chains.

The stability of the TVL market share over the last 6 months reflects the lack of major disruptions to the landscape. The market share rankings also show the limits of TVL as a metric. Curve has the highest TVL but is a stable-stable pool the same as a high fee pool on Uniswap v3?

A chunk of TVL – Curve ($20bn), Lido ($18bn), Convex ($12.6bn) – can be attributed to liquidity pools for stable assets, ETH to staked ETH in the case of Lido. And then there are the lending protocols – Maker ($17bn), Aave ($13.7bn) and Compound ($6.7bn), which are more concerned with total amount borrowed than TVL.

Still, the Token Terminal page has lots of great info (especially on revenue) that provides the context to safely compare apples to oranges.

A helpful framing as a slew of new networks come online. Of course, Ethereum in its current form does all three of these. There’s the EVM (execution), the ever increasing size of Ethereum state (data), and the Proof-of-work consensus layer. Presumably with The Merge impending, the EVM will be the only one that persists. Most rollups are optimizing execution and data layers to Ethereum, but chains like Celestia, may assume the data layer, while the onslaught of new execution layers (zk-everything…) are slowly approaching mainnet launch .

The latest zk execution darling, Layer Zero Labs had a big roll out this week – Tom Brady AND Justin Timberlake, oh my! Most, interestingly, Uniswap Laps was part of their latest fundraising round. Check out Multicoin’s investment thesis for an overview of the project, or read Vitalik from April 2021 on sharding for a different perspective.

• Cowswap & CowDAO launch COW token Link

• Muffin, a concentrated liquidity AMM with multiple fee tiers, launches Link

• Ribbon Finance raises $8.5m, led (or partnered?) by Paradigm Link

• Element Finance launches ELFI, Element DAO with governance council Link

• The maximum leverage possible on a DeFi lending protocol Link

That’s it! Feedback appreciated. Just hit reply. Written in Brooklyn, where it was below freezing on Monday and Tuesday 🙄. Tomorrow is April!

Dose of DeFi is written by Chris Powers, with help from Denis Suslov and Financial Content Lab. Caney Fork, which owns Dose of DeFi, is a contributor to DXdao* and benefits financially from it and its products’ success. All content is for informational purposes and is not intended as investment advice.