Markets Roundup: Ethereum Burn Rate Surges as DeFi Tokens Post Mixed Performance

A weekly recap of DeFi market action from Sam Haig

DeFi assets saw a mixed performance this week, with roughly half of the sector’s leading protocols suffering drawdowns by both TVL and token. Still, sector-wide TVL and market cap have continued trending into previously uncharted territory.

Market Cap Moves

According to CoinGecko, the combined capitalization of DeFi tokens has continued to press into new all-time highs this past week, currently sitting at a record of $173.7B equal to 16% more than the previous high from early May.

Terra (LUNA) remains at the top of the rankings with a nearly $22.9B market cap, followed by Chainlink (LINK) with $15.5B, and Uniswap (UNI) with $12.8B.

Top Gainers

Two top DeFi tokens gained by more than triple digits this week, while a further seven tokens posted significant gains of between 25% and 50%.

Keep3r (KP3R) + 217.4%

Loopring (LRC) + 175.3%

Lido DAO (LDO) + 50.1%

Liquity (LQTY) + 48.2%

Frax Share (FXS) + 47.6%

Biggest Losers

More than half of the sector’s top 100 tokens by market cap suffered drawdowns for the week.

Popsicle Finance (ICE) – 40.7%

Spell Token (SPELL) – 28.8%

Ampleforth (AMPL) – 28.8%

Trader Joe (JOE) – 25.9%

KeeperDAO (ROOK) – 23%

TVL

According to DeFi Llama, the total value locked (TVL) of the DeFi sector also posted new highs this week, tagging $275B for the first time on Nov. 9 before retracing to $268B.

More than two-thirds of DeFi capital is locked on the Ethereum network, which posted a record TVL of $182B on Nov.10 before retreating to $179.5B.

Binance Smart Chain’s TVL saw modest growth this week, representing $21B in locked capital. However, BSC’s TVL is still down 35% compared to its May high of $32.4B, suggesting that rival EVM-compatible networks have amassed some of the liquidity previously on Binance Smart Chain.

Solana ranks third with $14.1B after posting a record high of $15.2B on Nov. 9, followed by Terra with $10.8B down from $11.5B, and Avalanche at a new high of $10B. Fantom also ranks sixth with $5.3B after hitting a new high of $6.1B, while Polygon ranks seventh with $5B — down more than 50% from its June record of $10.5B.

All other networks host a combined DeFi TVL of $22.3B.

Curve currently ranks as the single-largest DeFi protocol with a TVL of $20.7B across seven different networks, followed by MakerDAO with $19.5B on just Ethereum, and Aave with $16.1B across three chains.

Nearly half of the 100-largest protocols saw capital outflows for the week.

Burn Rate

Ethereum’s burn rate has increased by nearly nine times over the past fortnight, with 88,641 Ether (roughly $407.7M) having been destroyed in the past seven days according to Ultrasound Money.

Uniswap v2 was the largest burn source destroying 13,672 ETH ($62.9M), followed by wallet transfers with 9,596.5 ETH burned ($44.1M), and Tether with 5,636 ETH ($25.9M).

Uniswap v3 also ranked fourth by burn rate with 4,377 ETH ($20.1M), closely followed by OpenSea with 4,017 ETH ($18.5M), and Ethereum Name Service with 2,691 ETH ($12.4M).

Layer 2 Growth

According to L2beat, Leading layer-two Arbitrum saw its TVL largely trend sideways at $2.7B this week, tagging a new high of $2.8B on Nov. 9.

Second-layer derivatives protocol dYdX ranks as the second-largest L2 by DeFI TVL with $967M despite a 4% drawdown, while rollups network Optimism ranks third with $325M after posting a record of $341M this past week.

Fees

Leading DEX Uniswap’s fee generation surged this week, with the protocol driving $9.1 million worth of fees each day on average. Compared to just two weeks ago, Uniswap’s fees have nearly doubled.

Aave was the second-ranked DeFi dApp by fees with a daily average of $2 million, followed by SushiSwap with $1.8 million. By contrast, the entire Bitcoin network drove roughly $1 million in fees each day.