(ID: chainnewscom), author: DAppTotal research team, published with authorization.

Written by: DAppTotal Research Team After decentralized finance (DeFi) became the most popular keyword in the cryptocurrency market, whether "DeFi" is really a future trend, or a flash in the pan, has become the focus of recent discussions.

Let's talk with numbers. DAppTotal analyzed the development of the DeFi industry in the first half of 2019, and carried out a systematic and comprehensive data interpretation and analysis focusing on the three major markets of stablecoins, lending markets, and decentralized exchanges, and formed this report, hoping to give feedback to those with different opinions. The market provides clear, credible factual support.

• Overall, DAppTotal statistics show that as of June 30, 2019, the total lock-up value of the DeFi industry was US$1.49 billion, an increase of nearly 5 times in half a year compared to US$302 million on January 1.

• Several other noteworthy findings include:

• Decentralized Lending: This market is still in its early stages, only two years old, but it is growing fast. According to DAppTotal statistics, as of now, the most loaned crypto assets in the lending market are: DAI and WETH. The total amount of loans (loans + borrows) in June was 544 million US dollars, an increase of 16 times from the 34 million US dollars in January .

Decentralized Exchange (DEX): Compared with centralized exchanges, the overall market size of decentralized exchanges is still relatively small. Its main advantages lie in transparency and security, while its disadvantages lie in development speed and market liquidity. At present, the currency that is circulated on DEX is mainly the currency that is not listed on the centralized exchange. According to DAppTotal statistics, the total monthly transaction volume of DEX has maintained a steady growth in the past six months, from $71 million in January to $288 million in June.

secondary title

Clarify the concept: what exactly is DeFi?

Decentralized Finance, referred to as DeFi, also known as open finance, has been one of the hottest fields in the blockchain ecosystem in the past two years, especially the DeFi applications currently active on the Ethereum network.

DeFi tries to use blockchain technology to solve the natural shortcomings of traditional/centralized finance, such as: financial system inequality, cumbersome review process, lack of transparency, and potential transaction risks (the risk of not fulfilling contractual obligations is bad debt) wait.

The DeFi industry can be further subdivided into stablecoins, lending, payments, derivatives, decentralized exchanges and assets, etc. The first half of this report will give an overview of the current status of the DeFi industry, and then focus on detailed data analysis and discussions on the three categories of stablecoins, lending and decentralized exchanges.

image description

Figure 1. The total locked value of DeFi applications in the first half of 2019

image description

According to DAppTotal.com [3] data, as of June 30, 2019, the top 5 DeFi applications are: EOSREX, Maker, Edgeware [4], Compound [5], and Dharma [6] (see Figure 2) .

As far as the lending market is concerned, the first echelon of DeFi applications are: Maker, Compound, Dharma, and dYdX [7], and the total locked value soared from $278 million on January 1, 2019 to June 30, 2019 522 million U.S. dollars per day (see Figure 3).

image description

Figure 3. The total locked value of the first echelon of DeFi lending applications

The most noteworthy thing is that DeFi applications are divided into three categories: stable currency, lending, and decentralized exchange. Among them, stable coins and decentralized exchanges have been born many years ago, and their importance in the blockchain world has become increasingly prominent. In the past two years, the lending market has also shown signs of rapid growth.

The data mentioned in this report come from the public data on the blockchain chain. The data analysis part is the result of long-term research by the DAppTotal team. In the past year or so, the DAppTotal team has accumulated a large amount of on-chain data information such as transactions and logs of the head public chain, built a rich and comprehensive database, and developed professional data analysis tools.

This report is based on DAppTotal's own blockchain database and analysis software, and makes a systematic and forward-looking analysis and discussion of the new DeFi industry trends and development expectations for readers.

The content of this report is based on our research results and understanding of the blockchain and DeFi industry. However, due to the anonymous nature of the blockchain, we cannot guarantee the accuracy of all data here, and DAppTotal cannot be responsible for any errors or omissions. or use this report to take responsibility for the loss.

The content of this report is based on our research results and understanding of the blockchain and DeFi industry. However, due to the anonymous nature of the blockchain, we cannot guarantee the accuracy of all data here, and DAppTotal cannot be responsible for any errors or omissions. or use this report to take responsibility for the loss.

secondary title

Overview of DeFi Market Development

text

The financial industry is one of the industries that can best reflect the value of blockchain technology. Because cryptocurrencies such as Bitcoin are natural value storage and payment financial tools. To some extent, the emergence of DeFi has once again verified the practical application value of cryptocurrencies.

The current largest DeFi application is EOSREX, which rose rapidly a few months ago and is a resource leasing platform on the EOS public chain. Maker and EOSREX, as the two pillar applications of the DeFi industry, provide strong support for the further development of the cryptocurrency market economy.

According to DAppTotal data, as of June 30, 2019 (see Figure 4), Maker and EOSREX together accounted for about 69% of the total locked assets of DeFi applications. From another aspect, it also shows that the current market size of the DeFi industry is small and still in its early stages.

image description

Figure 4. DeFi locked-up total value and market share (June 30, 2019)

In the initial stage of the DeFi application market, there are not many types of business. Maker only supports users to mortgage ETH to borrow stablecoin DAI. EOSREX users also lease the system resources required for the operation of the project only by storing or paying EOS.

Due to the decentralized and cross-regional nature of the blockchain industry, DeFi applications have a wider market and customers than traditional financial markets. As more and more DeFi applications are launched, on the one hand, we have seen the rapid development of DeFi applications, and on the other hand, there is also a trend of combining multiple application modes. For example, DAI borrowed from Maker can be stored in Compound Lend or trade on dYdX.

At present, DeFi is still in the early stage of development, and users with encrypted assets are relatively small, so the user group in the DeFi industry is also relatively small. Therefore, the challenge facing DeFi in the future is still to continuously educate and improve the acceptance of cryptocurrencies among mainstream users, and then fundamentally cultivate the source of vitality for the DeFi application market.

secondary title

Stablecoins are cryptocurrencies that maintain a stable value and are designed to address the volatility and stability issues of traditional cryptocurrencies. Most of the stablecoins currently on the market are anchored to one or more cryptocurrencies, fiat currencies, or commodities such as gold. Only a few stablecoins are based on algorithms and have no other value asset support behind them.

image description

• Figure 5. Stablecoin market share

How big is the stablecoin market?

According to DAppTotal data (see Figure 5), as of June 30, 2019, the total circulation of the stable currency market was 4.57 billion US dollars, of which USDT was 3.68 billion US dollars, accounting for 80.6% of the market share. Among the emerging stablecoins, the total circulation of USDC is 366 million US dollars, accounting for 41.4% of the emerging stablecoin market share, ranking first; the total circulation of TUSD is 214 million US dollars, accounting for 24.2% of the market share, ranking first. Ranked second; PAX ranked third, with a total circulation of 164 million US dollars, accounting for 18.5% of the total market share. Other emerging stablecoins such as DAI, GUSD, EURS, and nUSD combined accounted for 15.9%.

Figure 6. Circulation history of major stablecoins

image description

Figure 7. Number of daily stablecoin transactions in the first half of 2019

image description

Figures 7 and 8 show the daily on-chain transactions and total transaction volume of stablecoins in the first half of 2019. It is not difficult to see that the activity has increased significantly in the past few months.

image description

• Figure 9. The issuance of USDT on the three chains in the first half of 2019 

text

At present, most stablecoins are issued based on the Ethereum network, and most of them are 1:1 anchored to the US dollar. In recent months, the frequent issuance of most stablecoins is due to the recovery of the currency market. This is because stablecoins are still used for exchange trading and other cryptocurrency transactions to hedge against price fluctuations, and have not yet been used as a payment tool.

Overall, the use of stablecoins has been growing in the first half of 2019, and the daily transaction volume on the chain rose from $139 million on January 01 to $859 million on June 30, which means that the overall circulation of stablecoins The amount changes hands every 5 or 6 days. The number of daily transactions on the chain also expanded from 11,000 on January 1 to 77,000 on June 30. 

secondary title

The largest field in the DeFi industry is Lending, which can also be called mortgage lending, because the amount that users can borrow is determined by the value of the collateral, not their own credit history. In the event of insolvency, lenders or platforms can choose to liquidate assets.

DeFi lending protocols are designed to facilitate lending and borrowing of digital assets, enabling real-time transactions through smart contracts on public blockchains, and they also support interoperability between different protocols and users.

image description

Figure 10. Lending market share in the first half of 2019

• Maker allows users to mortgage ETH to borrow and obtain DAI; Compound accepts users to store multiple assets in a fund pool, and also allows users to borrow from a fund pool to obtain encrypted assets; dYdX is a digital asset lending and leveraged trading platform.

Data Analysis for Lending Apps

image description

Total borrowing (borrowing + lending) for the first half of 2019 was $544 million. Figures 10 and 11 show the market share of lending applications and the total amount of lending per month.

The asset mortgage rate of lending applications is relatively healthy this year. As can be seen from Figure 12, the mortgage rate is above 200% most of the time, and it was around 400% on June 30.

Figure 12. Asset mortgage ratio in the first half of 2019

image description

Figure 13. Loan market share in the first half of 2019

Figure 14. Monthly borrowings in the first half of 2019

image description

image description

image description

image description

• Figure 18. Lending application (cumulative) active users

text

The DeFi lending market is still in the early stages of development, only two years old, but its development speed is fast. According to DAppTotal data, total borrowings increased from $24 million in January to $173 million in June, and total loans also increased from $9.6 million in January to $256 million in June.

The most loaned assets are DAI and WETH. The asset mortgage rate is generally around 400%, and the system is relatively safe. However, the DeFi industry is currently in a situation of ice and fire. Compared with the fast-growing lockup amount, its number of users is still relatively small, only a few thousand per month, and there are fewer types of lending services.

secondary title

A decentralized exchange (DEX) is a free marketplace that allows peer-to-peer trading of cryptocurrencies without centralized authority controls and without many KYC (know your customer) requirements. Since users often do not need to transfer assets to exchanges, DEX can minimize the risk of asset loss caused by hacking incidents. DEXs also prevent price manipulation and fake volumes because all transactions are recorded on the blockchain.

In this section, we present data and analysis for the following 17 decentralized exchanges: Eth2dai, IDEX, Kyber, Uniswap, ForkDelta, DDEX, The Token Store, AirSwap, Radar Relay, Paradex, Bancor, Tokenlon, Star Bit, LedgerDex, Bamboo Relay, The Ocean, and TokenJar.

• image description

Figure 19. Market share of various decentralized exchanges in the first half of 2019

Compared with centralized exchanges, the transaction volume and active users of DEX are still relatively small.

In the first half of 2019, Eth2dai had the highest transaction volume among DEXs, accounting for 27% of the market share. In the first half of 2019, its total transaction volume was 256 million US dollars, which is about the transaction volume of a leading centralized exchange for several days. IDEX ranked second, accounting for 26% of the market share, with a cumulative transaction volume of US$246 million in the first half of the year; Kyber, which ranked third, had a transaction volume of US$146 million in the first half of the year, and Uniswap, which ranked fourth, had a transaction volume of US$134 million. Figure 19 shows the market share of each DEX in the first half of 2019.

image description

• Figure 20. Monthly transaction volume of various decentralized exchanges in the first half of 2019

Figure 20 is the monthly transaction volume graph of DEX, Figure 21 is the monthly transaction number graph, and Figure 22 is the monthly active user graph.

Overview of the current status of the DEX market

According to statistics from DAppTotal, the total number of DEX transactions in the overall market rose from 212,000 in January to 411,000 in June, and the total number of monthly active users rose from 19,000 in January to 32,000 in June.

image description

image description

Figure 22. Monthly active users (MAU) of decentralized exchanges in the first half of 2019

secondary title

• Maker

Overview of top DeFi applications

In this chapter, we will give a data overview of 4 major DeFi application examples, including: Maker, Compound, dYdX, and Edgeware. Dharma is not included because it is not open source and has no public data.

The current version of the Maker smart contract only supports ETH as collateral, but its next MCD version will support multiple assets as collateral, which is expected to go live by the end of this year.

The following is an overview of Maker's 2019 first half data and the annual percentage rate (APR) change chart:

image description

Launched in September 2018, Compound is positioned as a money market platform where users can lend cryptocurrencies to earn interest or borrow crypto assets from the platform. Interest rates are adjusted algorithmically based on supply and demand for borrowing and lending.

The Compound version 2 protocol was launched in May 2019. The following is a data overview of Compound V1 and V2, as well as an illustration of the loan APR.

image description

dYdX V1 and V2

• Edgeware

dYdX is a platform for borrowing, margin trading and derivatives. It was officially launched in September 2018 and supports 4x leveraged trading of ETH, DAI, and USDC tokens.

Edgeware is a high-performance WASM smart contract platform built on Substrate/Polkadot technology. Edgeware adopts a "lock-up airdrop" issuance incentive mechanism, which is an upgraded version of the airdrop method, and uses a low-cost way to hedge the user's Ethereum volatility risk. Users can lock their ETH into a specific smart contract, and EDG tokens will be distributed according to the total amount of ETH locked in their account.

As of June 30, 2019, the total value of Edgeware's locked assets was US$279 million. The following is the historical chart of Edgeware lock value:

List of DeFi apps on DAppTotal.com

Below is a list of DeFi apps included and updated on DAppTotal.com.

secondary title

Remember these core points

Recently, we have seen amazing progress in the DeFi field. In this report, we analyze the development of the DeFi industry in 2019, and provide detailed information on the three areas of stablecoins, lending markets, and decentralized exchanges. data analysis. These data can be further researched and analyzed by professionals. For ordinary readers, we hope that you can remember these core findings from these data:

• Since 2018, the DeFi industry has begun to attract the attention of the mainstream industry. In 2019, DeFi has gradually entered the media and public view and has become particularly hot. As of June 30, 2019, the total value of the lock-up volume of applications in the DeFi industry has been counted at US$1.49 billion, an increase of nearly 5 times in half a year compared with US$302 million on January 1.

• As of June 30, the top 5 DeFi applications by total locked value are: EOS REX, Maker, Edgeware, Compound, and Dharma.

• The market transaction volume of stablecoins has increased greatly in the first half of 2019. At the same time, with the recovery of the cryptocurrency market, the growth rate has accelerated since April. However, at present, stablecoins are still used for trading on exchanges, and other cryptocurrency transactions to hedge against price fluctuations, and have not yet been used as a payment tool.

references

references