The DeFi sector has seen a significant increase in both activity and token prices, primarily driven by bitcoin‘s rally in October. Fundamental to understanding this landscape is the concept of total value locked (TVL) and decentralized exchange (DEX) volume, two critical metrics that offer insight into the health and trajectory of DeFi protocols.
TVL, the aggregate value of assets deposited in DeFi protocols, serves as a barometer of the health of the sector and investor sentiment. cryptoslate The analysis found an interesting growth pattern across several chains. ethereum, the leader with $25.336 billion in TVL, has seen a 31.14% surge over the past month, cementing its dominant position in the DeFi space. Solana, although lower in overall TVL, showed the highest growth rate at 89.31%. Notably, all chains recorded positive growth during the month, indicating strong expansion across the sector.
The number of active users on these chains provides additional information. Despite its lower TVL, Tron has a significantly larger active user base of 1.69 million, which could result from a more retail-oriented user landscape. Conversely, ethereum‘s lower number of active users than its TVL could indicate greater participation from institutional or sophisticated high-net-worth investors.
The ratio of market capitalization to TVL is another critical metric that sheds light on the market’s perception of a chain’s value. ethereum‘s ratio of 9.72 suggests a mature market. In contrast, Solana’s highest ratio of 43.49 indicates potential growth opportunities or an undervalued ecosystem, warranting closer investor scrutiny.
| Name | Protocols |
Active users |
1D change | 7D Change | 1M change | TVL | Stablecoins | 24h volume | 24h rates | Relationship between market capitalization and TVL |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.ethereum | 946 | 304,493 | -0.12% | +6.50% | +31.14% | 25.473 billion dollars | 64.929 billion dollars | 1.718 billion dollars | 7.27 million dollars | 9.63 |
| 2.tron | 26 | 1.69m | -1.34% | +5.04% | +25.14% | 8.291 billion dollars | 47.455 billion dollars | 11.33 million dollars | 1.66 million dollars | 1.13 |
| 3.BSC | 663 | 945,060 | +0.22% | +1.70% | +12.58% | 2,996 billion dollars | 4.992 billion dollars | $429.32 million | $348,294 | 12.62 |
| 4. Decision | 481 | 133,870 | -0.38% | +10.90% | +25.21% | 2.095 billion dollars | $1,844 million | $925.94 million | 0.66 | |
| 5.polygon | 488 | +1.28% | +8.10% | +21.93% | $852.6 million | 1.17 billion dollars | 369 million dollars | $87,858 | 10.06 | |
| 6.Optimism | 197 | 91,508 | -0.12% | +11.94% | +25.87% | $739.39 million | $576.85 million | $109.27 million | 2.11 | |
| 7.Avalanche | 344 | 33,880 | -1.04% | +12.63% | +28.18% | $615.82 million | 1.07 billion dollars | $140.2 million | $36,244 | 9.73 |
| 8.Solana | 115 | -1.55% | +23.58% | +89.31% | $530.8 million | 1,513 billion dollars | $425.62 million | $108,773 | 42.62 |
Table showing the TVL, active users, volume and market cap to TVL ratio of the 8 largest L1 networks as of November 14, 2023 (Source: DeFi Call)
DEX volumes provide insight into trading activity within these ecosystems. ethereum leads with a 24-hour volume of $1.718 billion, representing a substantial portion of the total market. The rapid growth of DEX volumes on platforms such as Solana and Polygon, with increases of 81.35% and 86.32%, respectively, reflects growing user adoption and trust.
| Name | weekly change | Volume (24h) | Volume (7d) | TVL | % of the total | Cumulative volume |
|---|---|---|---|---|---|---|
| 1. ethereum | +27.29% | 1.718 billion dollars | 10.65 billion dollars | 5.941b | 37.12% | $1,888 billion |
| 2. Decision | +58.15% | $925.94 million | $4.415 billion | 1.127b | 20.00% | 138.902 billion dollars |
| 3.BSC | +7.54% | $429.32 million | 2,752 billion dollars | 1.577b | 9.27% | 757.4 billion dollars |
| 4. Solana | +81.35% | $425.62 million | $2.571 billion | 185.78m | 9.19% | 54.616 billion dollars |
| 5. Polygon | +86.32% | 369 million dollars | 1,711 billion dollars | 0 | 7.97% | $101.421 billion |
Table showing trading volumes and total value locked for decentralized exchanges (DEX) on the five largest L1 chains as of November 14, 2023 (Source: DeFi Call)
The trends seen in TVL, active users, and DEX volumes show a booming market with activity. ethereum continues to lead, both in terms of TVL and DEX volume, indicating strong investor confidence and market dominance.
However, the rapid growth of newer platforms like Solana and Polygon suggests a diversified landscape, with different chains serving various user needs and investment profiles. The market cap to TVL ratio further confirms the growth potential of lower market cap chains, with Solana and Polygon positioning themselves for future growth.
