DeFi yield market analysis: Pendle TVL surges 10 times, Convex lock-up volume increases 17.5%

Original author: OurNetwork

Original translation: TechFlow

Today we’re going to talk about “yield” protocols, a classification of DeFi protocols coined by DeFiLlama. While the term is admittedly somewhat vague, we can’t think of a better term at the moment, so we’ll use it. In the yield category of DL, there are over 500 protocols that currently have a combined TVL of $7.95 billion — a whopping 74% drop from November 2021, but still impressive for a new decentralized financial system.

Despite the changing market, with traditional players competing with new entrants for the same on-chain capital, some notable winners have emerged. Fixed-rate lending protocol Pendle has outperformed in the first half of 2024 to become the overall category leader, growing 10x from $300 million to $3.5 billion in TVL, despite a decline in the overall size of the DeFi market. The value of the PENDLE token has also tripled year-to-date. The protocol currently holds 44% of TVL in the yield category and is on track to collect $22.6 million in annualized fees. All things considered, this is a remarkable achievement, and I look forward to seeing more on-chain research to explain how they achieved this.

A gentle reminder: these DeFi yields are available to anyone in the world with a wallet and an internet connection! I encourage you to try out some of the on-chain protocols to earn yield for yourself. Next, let’s explore this category in more depth.

DeFi Yield

Convex, Stake DAO, Tranchess, Pendle, Aura

① Convex

MarcoV | Website | Dashboard

Convex locked CRV reached 385 million in July (+17.5%)

• Convex enables liquidity providers on Curve.fi to earn enhanced CRV and liquidity mining rewards without locking CRV. On the other hand, it provides transaction fees and enhanced CRV shares to CRV lockers, thereby improving capital efficiency. Recently, due to the price drop caused by large-scale CRV liquidations, the total amount of CRV locked by Convex has rapidly increased to more than 384 million (+17.5%) in one month. As shown in the chart below, Convex is still the largest entity locking CRV.

Dune Analytics - @Marcov

• By locking CVX, users can access CRV locked by Convex, thereby earning protocol yield (currently 0.05%) and bribes (currently about 15%). You can also stake CVX and earn 5.25%. In July, we can see a slight decrease in the amount of locked CVX and a slight increase in the amount of staked CVX.

Dune Analytics - @Marcov

• By dividing the total CVX locked by the amount of CRV locked in Convex, we get the number of CRV tokens for each CVX locked, which increases to 7.43 due to the increase in locked CRV and the slight decrease in locked CRV. This means that locking 1 CVX token gives access to 7.43 locked CRV.

Dune Analytics - @Marcov

② Stake DAO

Hubert | Website | Dashboard

Stake DAO locks more than 100 million CRV

• Stake DAO is the premier platform for generating yield on your cryptocurrencies. On Stake DAO, you can access yield opportunities from multiple protocols such as Curve (decentralized exchange and lending), Pendle, PancakeSwap, Yearn, Balancer, F(x). It allows users to provide liquidity, lend, and leverage on multiple chains and get better rewards than using these protocols directly.

DeFiLlama

• This superior yield is due to the Stake DAO’s share of the base protocol governance token, which can earn enhanced rewards when providing liquidity. For example, on Curve, Stake DAO just reached the level of locked 100 million CRV, the second holder to reach this level after Convex.

Dune Analytics - @Marcov

• Stake DAO not only integrates Curve, but also works with more than a dozen protocols. Its success is closely related to its superior peg maintenance and the utility of a wider range of liquid staking derivatives.

defiwars.xyz

• Transaction Level Alpha: Finally, Stake DAO recently launched OnlyBoost, a product that simplifies decision making and helps users find the best yield for a specific pool, maximizing yield by allocating user deposits to different boosters such as Convex and Stake DAO. In this transaction , a user deposited $560,000 in the crvUSD lending pool. These funds were split: $303,000 through Convex and $257,000 through Stake DAO. This allows the pool to maintain a 2.5x boost and the best yield.

③ Tranchess

Anthony Loya | Website | Dashboard

Tranchess unlocked 101.58 million CHESS tokens, about $14.08 million

• Tranchess is a DeFi protocol that provides products that enhance yields through QUEEN, BISHOP, ROOK, and CHESS tokens, supporting multiple risk-allocated assets such as BTC, ETH, and BNB. CHESS is a governance token, while veCHESS represents locked CHESS tokens, granting voting rights and rewards. Tranchess V2 introduces instant swaps and an increased rebate pool, increasing the flexibility of asset allocation.

DeFiLlama

• During this period, the asset price fluctuated significantly, reaching a peak of $0.1954 in December 2023, before falling and partially recovering to $0.1399 in July 2024. Trading volume showed notable peaks, especially on July 11, 2023 and November 11, 2023, indicating significant market activity. Liquidity remained relatively stagnant, gradually decreasing from $1.03 million in July 2023 to $253,600 in July 2024. Major unlocking events in the past few months were accompanied by sharp price drops and low trading volumes, such as on April 6, 2024 and June 2, 2024. Overall, the market showed dynamic behavior, with a recovery trend appearing in mid-July 2024.

DeFiLlama

• The unlocking of CHESS tokens is huge, about 101.58 million, and according to DefiLlama, the stake has also decreased. From March 28, 2024, the staked amount dropped from $12.29 million to $6.35 million as of July 30, 2024. There are several reasons for the decline in the protocols stake. First, the introduction of Liquid Staking Tokens (LRTs) and the new staking model has created greater competition in the DeFi space.

Dune Analytics - @dragon_cat

• Transaction Level Alpha : As June progressed, many six-figure funds appeared among the stakers of Transess, reflecting that the protocol is still attractive to some stakers. For example, one user account staked $331,700.55 of eQUEEN on June 3, 2024.

④ Pendle

Dan Anthony | Website | Dashboard

Pendle leads in the “income” category with a TVL of $3.5 billion

Pendle, a protocol that splits yield tokens into principal tokens (PT) and yield tokens (YT), has seen over $24.5 billion in trading volume since January, a 96% month-over-month growth rate.

analytics.pendle.finance

• Pendle’s current TVL is $3 billion, having reached $6.7 billion. The drop in TVL was due to the pool expiring at the end of June, with Pendle settling over $3 billion in proceeds.

analytics.pendle.finance

• Pendle currently holds ~40% ($600 million) of sUSDe TVL on Ethena, making us the largest holder of sUSDe by far.

analytics.pendle.finance

• Transaction Level Alpha : Justin Sun, the founder of Tron, purchased PT-eETH and PT-pufETH for fixed income. This link shows Justin Suns dashboard on Pendle. The transaction was conducted through multiple transactions.

⑤ Aura

Owen Fernau | Website | Dashboard

Aura attracted 70% of the BAL (veBAL) tokens locked by Balancer voting

• Aura Finance is a protocol with over $400M TVL built on the decentralized exchange Balancer, which has over $800M TVL. Aura interfaces with three key entities: BAL stakers, Balancer liquidity providers (LPs), and AURA holders, all of which earn yields from the protocol. Aura attracts 70% of all “vote locked” BAL (veBAL), a token that gives users the power to vote and earn fees on the Balancer platform. Users receive these benefits through auraBAL, which earns additional yield from Aura when staked or used for liquidity provision.

Dune Analytics - @aura_finance

• Aura’s version of veBAL, auraBAL, moved away from the 1:1 peg with the 80/20 BAL/ETH Balancer LP token (veBAL is minted from the 80/20 BAL/ETH LP token). The ratio between the two tokens reached as high as 90% auraBAL in June. The ideal peg is 50:50.

Dune Analytics - @aura_finance

• Since the protocol’s launch in July 2022, Aura has generated over $250,000 in revenue in almost every month except one. In August 2022, the protocol’s revenue reached $8.35 million, setting a record high.

Dune Analytics - @aura_finance

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