Recently, Kripteu Magazine has noticed an upward trend in Total Value Locked (TVL) for a number of decentralized projects. It is important to note that some of the major projects that have seen a huge increase in the aforementioned parameter include Waves (WAVES), Terra (LUNA), THORChain (RUNE), and Solidly (SOLID). In this article, we will try to describe the facts if there is a general trend that is being followed.
What is TVL?
TVL is a term commonly associated with decentralized finance protocols that represents the total amount of blockchain-based assets that are deposited into the protocol. Importantly, this includes all assets that have been staked, loaned, or used to provide liquidity in pools. The returns that these assets provide are not counted in the locked value but only include the assets themselves.
It is also important to note that the TVL of any protocol constantly changes with the number of assets being deposited or withdrawn as well as the fluctuating dollar value of all those assets in the cryptocurrency market. Another fact is that, according to data from DéfiLlamaEthereum holds the largest TVL among all chains, nearly half of all DeFi volume.
In 2021-2022, we saw a huge increase in TVL from a number of projects. However, heading into a new year, it looks like this year will be quite promising for DeFi as we can see a huge increase in TVL for a number of projects.
The waves are “a community stack of decentralized open-source technologies to build scalable and user-friendly applications“, according to the manager website. The project is extremely fast and makes it easy to create NFTs and build CADs. Additionally, the protocol is environmentally friendly with a minimal carbon footprint.
According to their official data, the daily transaction value exceeds 44.5K and the total transactions made is 254 million. 73.0% of the supply has been staked, while the average fee per trade is $0.017, which is quite cheap.
The Llama Challenge Data shows that the Waves protocol is the 11th largest protocol in TVL, and the volume was $700 million on February 4, and has risen to $1. 67 billion at the time of writing. the Data from CoinMarketCap shows that prices have jumped 55% in the last seven days.
TVL’s major change can be attributed to the platform’s transition to Waves 2.0. This will introduce a new consensus with Ethereum Virtual Machine Support, cross-chain bridges, new governance models, a bridge between digital worlds, among others. The largest Dapp in the Waves channel is Neutrino (NSBT), whose TVL has increased by 90.45% in 1 one, increasing by 60% in the last seven days.
Terra is TVL’s largest protocol after Ethereum, which has grown in volume from $13.4 billion on Feb. 1 to $22.8 billion at the time of writing. The best performer in the chain is the Anchor protocol, whose volume jumped by 44.29%.
Terra is a “public blockchain protocol deploying a suite of algorithmic decentralized stablecoins that underpin a thriving ecosystem that brings DeFi to the masses“, according to website.
The reason for LUNA’s surge in TVL can be attributed to the fact that there has been a surge in the network’s popularity. Moreover, the developers continued to burn the supply of the token. According to data from Smart stake, the network has burned over 29 million tokens from the supply. This burning mechanism followed by increased demand for the UST token caused the token to burn and increase its prices. In addition, LUNA is the second biggest staked token, only surpassed by Solana.
THORChain (RUNE) TVL has grown from around $130 million at the end of January to over $180 million at the time of writing. On the other hand, the RUNE token has surged over 30% in the past seven days as the market remains bearish.
“THORChain aims to decentralize cryptocurrency liquidity through a network of public THORNodes and ecosystem products. Access to its native and cross-chain liquidity is open to any person, product or institution,” according to the website.
The reason for the THORChain price hike was the integration with Terra (LUNA) and the launch of the mainnet.
The Terraform integration is complete, just awaiting final approval from the Terraform Labs security team (and that’s supposed to be on the schedule for early next week, I think?)
— $RUNE Ranger 🔨 (@TheRuneRanger) February 28, 2022
Terra’s integration will bring UST and LUNA tokens to the RUNE ecosystem and was one of the main reasons THORChain (RUNE)’s TVL increased. The THORSwap now supports six types of wallets for eight blockchains as cross-chain DEXs. Additionally, the mainnet launch that has been delayed may be close to launch, which has caused another hype among the market bulls.
In a recent Kripteu Magazine report, we highlighted the fact that the TVL of Solidly crossed the $2 mark in just 24 hours. Data from DefiLlama confirms that after hitting the $2 billion mark, TVL crashed and at the time of writing the volume stands at $1.25 billion.
This massive crash set the entire Twitter crypto on fire as the SOLID token surged from a low of $2.48 to a high of $15.60 over the past seven days, but at the time of writing, the price is $3.
The Solidly project saw a huge increase in TVL and adoption, and it seemed like its popularity had no end. However, this recent crash was attributed to a number of factors by one Twitter user. The main reason for this huge crash is token inflation, according to the user.
But $SOLID the token price has collapsed: I think there are 3 main reasons.
1. Symbolic inflation:
While investors originally thought the rewards would be strong for about a year, it turns out Andre Cronje coded $SOLID so emissions drop dramatically after just 10 weeks.
— Jack Niewold (@JackNiewold) March 4, 2022
The skyrocketing TVL of these decentralized protocols can be attributed to a number of factors. Each protocol has something they aim to bring to the DeFi industry. However, it can be seen that the most attractive aspects include scalability, lower fees, and cross-chain experience. It should also be noted that all the projects mentioned above have shown promising utility, and when it comes to the crypto market, nothing is certain. However, it can be said that the time has come for a new upsurge in the utility of more scalable, secure and cheaper networks.