MKR and DeFi lag ETH, Ethereum's protocol revenue
Plus Odds & Ends and Thoughts & Prognostications
Tweet of the Week: DeFi tokens continue slide
Maker @MakerDAOThe System Surplus just reached 70 million DAI for the first time. It is currently growing at a rate of 2.5 DAI per second. 📈 https://t.co/AIK15KloOv
DegenSpartan has been roasting MKR for years, so this isn’t exactly news, but the deteriorating MKR/ETH price is indicative of the broader underperformance of DeFi tokens. MKR, COMP, and SNX are now at the same levels seen in September 2020, which was the peak of DeFi summer but still months before the broader ETH (and BTC) bull run. Meanwhile, NFTs have since captured the attention of speculators.
Ever the optimists, we think this is The Great DeFi Lull after a burst of innovation and price appreciation pulled the market’s interest forward. It’s hard to speculate on how DeFi tokens could compare to ETH, but a gentle reminder that at each fundraising round, Coinbase’s investors would have been better off buying BTC than Coinbase equity. And while DegenSpartan remains an eternal DeFi skeptic, they also speculated that tokens on the secondary market may look more attractive than valuations seen in crowded private funding rounds.
Chart of the week: Ethereum protocol revenue
One of many excellent charts from Ben Giove’s State of Ethereum | Q1 2022 in Bankless today. The post has a run down of major data points for the DeFi and Ethereum ecosystem and compares them to the end of Q1 2021. For instance, TVL locked in Ethereum Layer 2’s increased 964% YoY to $7.3bn, while the total supply of stablecoins ballooned from $42.3bn at the end of Q1 2021 to $122bn today.
The chart above from Token Terminal highlights the growth in Ethereum revenue - defined as fees paid in ETH, with proceeds from “Protocol Revenue” burned following the implementation of EIP-1559 last summer. Protocol revenue is 87% of overall revenue, so this ends up being about ~$25m ETH burned a day. To put this in perspective, Avalanche does about ~$800k in fees a day. DeFi TVL on Ethereum mainnet is ~$115bn vs. ~$10bn on Avalanche.
Anyway, the Bankless article is a run down of a bunch of data metrics from Q1, along with links to the various data sources.
Odds & Ends
Compound governance rejects proposal to end COMP rewards Link
CowSwap celebrates one year anniversary of launch Link
Options protocol Ribbon unveils v3 Link
MEV on Ethereum Dune dashboard from NiftyTable Link
Thoughts & Prognostications
Cosmos: Getting our feet wet [Denis Suslove/Dose of DeFi]
Three counterintuitive lessons from a crypto investoooor [Richard Chen/1confirmation]
Five things I learned from ETH Amsterdam [David Hoffman/Bankless]
Maker collateral risk model: Feature analysis [Jan Osolnik]
MEV: wat do next [Phil Dain/Flashbots]
Overview of NEAR [Lewis Harlan & Ben Harvey/Decentral Park]
Andre Cronje: Out of the Crypto Badlands Into a Regulated Future [Delphi Podcast]
Replicated Market Makers from PrimitiveFi are a 0 to 1 moment for DEX’s [Nick Tomaino/1confirmation]
That’s it! Feedback appreciated. Just hit reply. Written in Brooklyn, but excited to celebrate Sam and Divya in DC.
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.