Market Action: Terra Leapfrogs Binance Smart Chain with Surge in TVL

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    Terra is still on a roll. 

    Defying a relentless selloff across crypto markets, the Layer 1 smart contract platform’s LUNA continues to capture DeFi marketshare. In the last week, the network’s TVL surged 43% to surpass Binance Smart Chain and rank second with 17.7B in total value locked. LUNA now accounts for one-fifth of the combined DeFi market cap, according to according to CoinGecko.

    LUNA was the third-best performing DeFi token for the week, with cross-chain bridge AnySwap and yield aggregator Yearn Finance topping the rankings with 53.7% and 51.4% respectively.

    DeFi assets currently represent $140.7B or 6.1% of the combined cryptocurrency market cap.

    Combined market cap of DeFi tokens. Source: CoinGecko

    TOP GAINERS

    With top crypto markets trending sideways this past week, only 20 of the top 90 non-stablecoins DeFi tokens posted gains for the week, half of which are up by double digits.

    • Anyswap (ANY) + 53.7%
    • Yearn Finance (YFI) + 51.4%
    • Terra (LUNA) + 28.2%
    • Wrapped NXM (WNXM) + 25.9%
    • Spell Token (SPELL) + 20.9%

    BIGGEST LOSERS

    One-third of the top 90 DeFi assets suffered double-digit losses this week, including billion-dollar projects Loopring (LRC), THORChain (THOR), and OlympusDAO (OHM).

    • Bonfida (FIDA) – 31.5%
    • Wonderland (TIME) – 31.4%
    • Circuits of Value (COVAL) – 25%
    • Polkastarter – 22.2%
    • Frax Share (FXS) – 20.7%

    Network TVL

    It was a volatile week for DeFi TVL. It fell to a three-month low of $225.5B on Dec. 14.

    Curve, MakerDAO, and Convex Finance remain the three-largest protocols by cross-chain TVL after posting modest gains between 0.3% and 3% each. Wrapped Bitcoin ranks fourth, followed by Aave, Wrapped Bitcoin, Instadapp. Lido Compound, Uniswap, and Anchor.

    DeFi TVL. Source: DeFi Llama

    Terra Defies Rough Stretch

    Terra bucked a tumultuous week for DeFi TVL to rank as the second-largest network for the first time after its total value locked increased 43% to $17.7B.

    The gain comes amid surging growth for the network’s three-largest protocols, with Anchor’s TVL sitting at $7.51 after growing 23.6% in seven days, Lido representing $5.29B after gaining 12%, and Terraswap comprising $1.91B after its capital locked increased by a whopping 78.9%.

    Delphi Labs’ automated market maker Astroport also emerged as Terra’s fourth-largest protocol after attracting more than $1B through its lock drop. The top four projects now represent 89.3% of Terra’s TVL combined.

    Ethereum Hit Hard

    Leading network Ethereum was one of the poorest performing networks for the week, now at $149.9B after losing $13.4B or 8.2% of its TVL this past week. 

    Despite six of its 10 largest protocols posting modest growth over the past seven days, several nine-figure protocols suffered heavy losses.  That includes Olympus DAO with 59.1%, MochiFi with 31.4%, and Notional with 26.8%. TempleDAO also shed a whopping 82.6% for the week, sitting at $31.9M after boasting a TVL exceeding $180M two days ago.

    Ethereum’s share of the combined DeFi TVL is 62.7%, down from 66.3% seven days ago.

    Binance Ticks Up Despite Terra Surge

    Despite being overtaken by Terra, Binance Smart Chain is up 1.5% for the week with a total value locked of $16.4B. 

    Drawdowns suffered by BSC’s second and third largest protocols Venus and Tranchess were offset by a 23% gain from fourth-ranked BiSwap and 12% for fifth-ranked Alpaca Finance. BSC’s Mars Ecosystem also surged to ninth after growing 205% in seven days.

    Solana & Avalanche Make Steady Gains

    Just $50M now separates Solana and Avalanche, with Solana ranking fourth with $11.75B while Avalanche comprises $11.7B. 

    Solana grew just 2.2% despite its second-largest protocol Serum gaining 27% and third-ranked Marinade Finance up 8.4%, while Avalanche grew 5.4% with steady gains across all but one of its top ten protocols.

    Tron, Polygon, and Fantom are still closely contending for sixth place with respective TVLs of $5.28B, $4.93B, and $4.46B.

    L2 Growth Continues

    The DeFi TVL of top networks trended sideways this week, with Arbitrum down 6.2% at $1.81B, dYdX up 0.5% with $981M, and Optimism up 2.6% with 308M. It appears the success of Optmism-fork Boba Network may have been short-lived, with its TVL sitting at $148B after shedding 22% for the week.

    When looking at overall L2 TVL, L2beat estimates Arbitrum represents 43% of the sector’s $5.28B TVL with $2.27B or 43%. 

    dYdX ranks second with 981M or 18.6%, followed by Boba Network with $587M or 11.1% despite a 23.6% drawdown for the week, Loopring with $520M or 9.85%, and Optimism with 383M or 7.25%.

    Burn Rate

    The decline of Ethereum’s burn has slowed significantly, with 50,009 Ether burned (worth $191.5M at current prices) or 4.96 ETH per minute, down from 5.09 ETH last week.
    ETH transfers were the single-largest source of burned Ether this week with 4,763 ETH, closely followed by OpenSea with 4,703 ETH, Uniswap v2 with 3,036 ETH, Tether with 2,169 ETH. The “credit account mining” campaign of the soon-to-launch leverage protocol for DEXes, Gearbox Protocol, saw the project rank fifth with 1,797 ETH.

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