The crypto industry has seen various commodities gain momentum over the past year, with non-fungible tokens [NFTs] being rabies especially. However, a recent study from DappRadar found that although the sudden popularity of NFTs took the industry by storm, there is no comparison to the value generated by decentralized finance [DeFi].
DeFi space managed to attract over 590,000 unique daily active wallets in Q3 [Q3], reaching a total locked-in value of $ 178 billion. While Ethereum-based DeFi remains dominant, other competitors like Binance Smart Chain [BSC] are also gaining more ground.
The biggest contributors to locked in value are dapp loans, thanks to great whale activity.
The report also found that Ethereum dapps recorded a higher whale activity than BSC dapps. According to DappRadar, the average size of transactions on Aave [on Ethereum] during the third quarter was valued at approximately $ 461,000, while Alpaca Finance [on BSC] reached $ 72,000.
It added,
“Even though the gas fee mechanism changed due to the London upgrade, it still remains an ecosystem that favors whales.”
Although BSC offers a more user-friendly tariff barrier, network usage remains high on Ethereum. Projects like MakerDAO, Aave, and Compound lead the DeFi-way for Ethereum users. Although MakerDAO is a borrowing protocol hosted on Ethereum, it has become relevant to the DeFi space as a provider of the DAI stablecoin.
Unlike lending apps, Maker users can only borrow DAI by depositing collateral in the accepted cryptos or by creating a new vault with accepted tokens. The leading debt pair remained with liquidity provider Uniswap.
Maker reported a TVL of $15 billion. However, the average transaction size of $3 million during August shrunk to $1.5 million in October. Nonetheless, it was still the platform that whales preferred to borrow and lend capital.
Aave closely followed Maker as the foremost lending protocol. It is currently deployed not only on Ethereum but also on Polygon and Avalanche. The popularity of the project is high as it offers 31 different assets and 16 cash pairs from Uniswap and Balancer.
Its flash loans and rate switching made it a favorite of big investors and arbitrageurs. Aave recently hit $ 15 billion TVL in Ethereum and deal size followed Maker’s lead, although the average number of trades tripled in the third quarter.
The report added,
“While Aave is certainly a place where whale transactions occur frequently, it is important to note that the size of transactions on Maker are approximately 10 times larger than Aave.”
Meanwhile, BSC’s largest lending protocol, Alpaca Finance, also saw its transactions increase five times in the third quarter, reaching nearly $ 125,000 in October. It was far away from competing with Maker, but not so far from Aave.
Therefore, the new product craze can come and go. The decentralized finance space is evolving. with whales mainly interested in the Ethereum network.
