In the midst of the 2023 bear market, it’s hard not to remember the transformative moments that have shaped this industry.
The 2020 “DeFi Summer” has become a turning point for the blockchain industry. crypto slate I remember. Several DeFi projects debuted this season, ushering in a new era in finance. His DeFi evolution during this period didn’t just make waves. It facilitated a paradigm shift and established itself as a bold pioneer of this unprecedented movement.
DeFi, a concept that has been around since 2015 through projects such as MakerDAO, will experience an incredible surge during the 2021 bull market, redefining traditional finance and establishing itself as a key player in the market. bottom. However, today, with token prices down by up to 90% to overcome the current bear market turbulence, we are looking at the speed of DeFi adoption and the impact of market cycles on adoption.
DeFi TVL analysis by chain since 2017
Against this background, our analysis covers Ethereum, Tron, BNB Chain (BSC), Arbitrum, Polygon, Optimism, Avalanche, Mixin, Pulse, Chronos, Solana, Cardano and Osmosis.
The table below shows the chains analyzed, the date the chain reached its all-time high for TVL (tracked by DefiLlama), the time it took to reach all-time high (velocity) since launch, and the all-time high. I’m here. (ATH), and now his TVL.
| chain | Activity start* | ATHDate | ATH TVL | speed | Current TVL |
|---|---|---|---|---|---|
| ethereum | November 2017** | November 2021 | $108.92 billion | 1280 days | $25.73 billion |
| Tron | August 2020 | November 2021 | $6.74 billion | 470 days | $5.69 billion |
| BSCMore | October 2020 | May 2021 | $21.94 billion | 186 days | $3.36 billion |
| Arbitrum | August 2021 | May 2023 | $2.53 billion | 614 days | $2.12 billion |
| polygon | October 2020 | June 2021 | $9.89 billion | 249 days | $9.7 billion |
| optimism | July 2021 | August 2022 | $1.15 billion | 393 days | $9.2 billion |
| avalanche | February 2021 | December 2021 | $11.4 billion | 302 days | $6.6 billion |
| mixed in | December 2021 | June 2022 | $0.59 billion | 182 days | $44 million |
| pulse | May 2023 | May 2023 | $4.9 billion | 5 days | $0.34 billion |
| Chronos | November 2021 | April 2022 | $3.22 billion | 145 days | $0.32 billion |
| Solana | March 2021 | November 2021 | $10.03 billion | 236 days | $0.31 billion |
| Cardano | January 2022 | March 2022 | $3.3 billion | 81 days | $1.8 billion |
| Penetration | June 2021 | March 2022 | $1.83 billion | 253 days | $1.3 billion |
The graph below visualizes the speed of each chain to reach all-time highs in TVL. DeFi pioneer Ethereum stands out as the slowest to adopt, considering that it technically has had DeFi activity since 2017, and thus reached an all-time high in November 2021. there is
Interestingly, November 2021 coincides with Bitcoin’s all-time high, which may have influenced Tron and Solana’s DeFi, which peaked around this time.
Bitcoin adjusted velocity
Since Bitcoin is seen as a barometer of the health of the entire cryptocurrency market, the speed of DeFi adoption was calibrated based on the price of Bitcoin at each chain’s DeFi launch.
crypto slate We cross-referenced Bitcoin price and all-time high data to create the Bitcoin Adjusted Velocity (BaV) for each chain.
The gray lines and plot points in the chart below represent BaV for each chain. The chart reveals that his DeFi ecosystems of Tron, Polygon and BSC have all been positively impacted by the price of Bitcoin and the bullish market sentiment that underpins it.
Chain speed analysis
Ethereum has been removed from the chart above for readability as it posted a massive velocity score of 7,936 compared to the next close with 1,065 for Tron and 829 for Arbitrum.
Considering the bear market, Pulse slowed down and reached ATH in just 5 days, giving it a score of just 10.98. The next lowest is Cardano at 109, which is about 10 times higher.
Using the BaV metric, the best performing chains appeared to be Pule, Cardano, Cronos, Solana, and Osmosis. Ethereum, Tron, and Arbitrum stood out as the slowest.
Tron is currently one of its closest chains to ATH and is performing well in 2023. If Tron crosses $6.47 billion ATH from its current level of $5.6 billion, it could outperform Ethereum on BaV and standard velocity measures.
The diverse trajectory of DeFi adoption across various blockchain networks highlights the importance of timing, market conditions, and the inherent advantages of being first movers in this space. But as the notable Pulse case shows, even new entrants can achieve rapid growth with the right ingredients.
make sense of the data
The speed at which TVL reaches all-time highs is a complex metric. Some might argue that the faster you climb, the faster you descend, and that’s definitely true with some chains.
However, the fundamental factor we analyze here concerns momentum and adoption. Additionally, all listed projects have grossed at least $330 million on the rock, most of which exceed his $1 billion mark. These are not projects with low market capitalization or low liquidity.
The projects analyzed in this article are important for identifying the strengths and weaknesses of the DeFi onboarding process to date. The average time it took for a chain to reach ATH was about 338 days, which means that, aside from outliers, most chains took almost a year to reach the peak of his DeFi activity.
*Launch date refers to the date of first data tracked by DefiLama for each chain**
** We use MakerDAO’s DAI launch as the date for the Ethereum DeFi launch, with data based on CoinmarketCap’s historical data.
***Additional data included due to DefiLlama 2020 deadline.
