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DeFi Protocols Face Stress Test Amid Crypto Market Slump Are They Alright?



From point to surface, analyze the performance of the DeFi protocol in the stress test triggered by this black swan event through macro data. On the evening of May 21st, after the government agency issued a request for "cracking down on Bitcoin mining and trading", the global cryptocurrency market experienced violent shocks that lasted for two days. The single-day decline of mainstream currencies was as high as 30%, and more Other currencies fell even more than 50%. In fact, the market has undergone a substantial adjustment since May 19. Under this extreme stress test, it is another opportunity to observe the operating efficiency of the DeFi (decentralized finance) system—especially when the system The amount of participating funds once exceeded the milestone of 100 billion U.S. dollars, and some of the assets are still being over-pledged or performing leveraged transactions. The violent market fluctuations over the past weekend are rare large-scale and high-volatility black swan events since last year's 312 (Black Thursday). Last year, there was a flash crash in the cryptocurrency market on 312. The biggest impact was that the liquidation engine in the Maker system of the "central bank" on the chain encountered some problems. Fortunately, it resumed operation through auctions and improved protocol design. MakerDAO did not experience the same issues during this period of wild market volatility. However, at 312 last year, DeFi had not yet become mainstream, and it was not yet a well-known direction in the industry, because the upsurge of liquidity mining had not yet started at that time. Today, the DeFi world is changing rapidly, and the complexity of DeFi business has grown. Far beyond that time. Against such a background, after experiencing large market fluctuations again, we hope that by summarizing some macro data of the DeFi world and combining the data presented by some core DeFi protocols during the market fluctuations this weekend, we can clearly understand from point to surface what is happening in this market. In the market fluctuations, the performance of these DeFi protocols in the stress test triggered by this black swan event. DeFi asset management platform Zapper launches Zapper Studio: On May 5, DeFi asset management platform Zapper announced the launch of Zapper Studio, an open platform for application integration, and disclosed its Web3 application integration repository, allowing anyone to write and Submit the integration. Currently Zapper Studio supports the integration of balance extractors, and later will allow the integration of lock-up (TVL) extractors, DAO integration and trading experience. Last month, Zapper launched an iOS mobile app. [2022/5/5 2:52:37] Looking at the overall performance of the DeFi field, the total locked-up volume of DeFi (TVL): close to half. TVL is one of the core indicators used to evaluate the overall scale of the entire DeFi world, and its data can represent The liquidity situation in the financial world on the chain. According to DeBank data, the total lock-up volume (TVL) of DeFi protocols in all blockchain networks fell from US$130 billion on May 11 to a minimum of US$67 billion within 12 days, nearly halved (-48%). DEX trading volume: record high Generally speaking, violent market fluctuations will promote an increase in trading volume, because DEX may be used for arbitrage or clearing transactions, and many native users on the chain may use DEX to hedge. In the market crash that has occurred on May 19, the cumulative trading volume of all DEXs is the highest in daily trading volume, close to 22 billion US dollars. The DeFi platform Streamix announced that the DAI/MIXS 90/10 pool is now available on Value Liquid: The DeFi social streaming & gaming platform Streamix announced on Twitter that the DAI/MIXS 90/10 pool is now available on Value Liquid. The pool will generate a portion of the remaining MIXS tokens to form its 2021 bounce auction. In addition, the official will also make changes to the existing 98/2 MIXS/WETH pool. This change is mainly to solve the problem of IL and low transaction volume of this pool, because it is mainly used as a staking pool for existing MIXS holders. The new DAI/MIXS pool will help solve these problems, the weight ratio of this pool will be 90/10, so farmers can earn with the lowest IL risk. [2021/1/1 16:12:54] Mortgage lending data: almost cut in half At present, almost all blockchain-based lending agreements are realized through asset mortgages, and the collateral is also based on volatile encrypted assets. Therefore, as the market fluctuates, its loan data may also be severely affected. Judging from the on-chain data, the total borrowings fell from a historical high of US$26.7 billion to US$15 billion, a drop of 44%, which was comparable to the market decline. Mortgage lending liquidation data: record high When the encrypted assets fluctuate greatly, the loan agreement may trigger liquidation due to the price fluctuation of the collateral, so the liquidation data also reflects part of the leverage ratio of the market. Of course, high liquidation data does not mean that there is a problem with the DeFi protocol, as long as these liquidations do not have bad debts or bad debts. The DeFi currency UNIFI on the CoinW platform led the rise: According to the market data of CoinWin, as of 10:00 today (GMT+8), the DeFi currency on the platform UNIFI led the rise today, with an increase of 48.66% today, and the current price is 4.85USDT; DGVC Today's increase is 22.29%, the current price is 2.6607USDT; STOMK is today's increase is 18.95%, the current price is 0.0111USDT; TRADE is today's increase is 18.72%, the current price is 1.3527USDT. The market fluctuates greatly, please pay attention to risk control. [2020/9/2] On May 19 and May 23, the highest and second highest liquidation volumes in history were born in succession. The single-day liquidation volumes were 614 million US dollars and 140 million US dollars respectively. In addition, on May 19th, Venus on BSC also suffered from a large area of bad debts due to the design of the system mortgage rate, resulting in a liquidation volume of more than 250 million US dollars. Gas: Relatively stable Gas on the Ethereum chain has been relatively stable in recent days. Although the gas of more than 1,500 Gwei was encountered instantaneously on May 19, it may be caused by robots bidding through Gas during the liquidation auction, or users fluctuating in the market. for quick transactions. However, the single-day median is only 181, which is not as good as the level on May 11 (306 Gwei), and it gradually declined in the next few days. This may be related to the fact that Ethereum has recently increased the block capacity, and the increase in the number of transactions has reduced the impact on block Gas. It may also be because more and more miner nodes have deployed Flashbots, which can reduce the Gas bidding in MEV. The DeFi portal DeFiprime has now included the compliant stablecoin HUSD: According to official news, the DeFi portal DeFiprime has officially included the introduction of the compliant stablecoin HUSD in its "Stablecoin Project List". DeFiprime is a professional DeFi project information aggregator and data analysis provider. The selected list of DeFi projects it provides aims to select the world's best DeFi projects for display, so as to convey and connect global DeFi information and community resources. HUSD is a compliant stablecoin issued by Stable Universal, which is anchored 1:1 with the US dollar. The U.S. dollar assets corresponding to HUSD are managed by a U.S. trust agency, and the funds are audited monthly by a well-known independent U.S. auditing company. The HUSD team is dedicated to providing users with safe, stable and convenient digital asset services. [2020/8/26] Stablecoins: Continued Growth Stablecoins backed by fiat currencies or assets continue to grow (generally also called compliant stablecoins, but USDT is more controversial), without due to market conditions The outflow of the blockchain or DeFi system due to violent fluctuations, the overall size is 63.4 billion US dollars. Oracle machine calls: close to the highest in history oracle machines represent the frequency with which DeFi and other businesses on the chain need off-chain or price data. Therefore, during periods of large price fluctuations, the number of oracle machine calls also increased significantly. Although it is not the highest in history, it can also be ranked in the top three in history, with more than 35,000 calls in a single day. The Force Protocol released the latest white paper, detailing the DeFi technology components and tokenization protocol: According to official news, The Force Protocol released the latest white paper, which elaborated in detail the DeFi technology components proposed by The Force Protocol and the tokenization protocol under development. DeFi technology components include basic components, extension components and financial components, aiming to solve the problems existing in the development of Ethereum DApp such as difficult contract upgrade and iteration, solidified data structure, slow interaction speed on the chain, poor user experience, lack of necessary infrastructure, and security issues outstanding issues. On the basis of DeFi technology components, The Force Protocol integrates bond financing agreement, currency lending agreement and decentralized stable currency agreement to form a ForTubeDeFi service platform. ForTube will provide individual and corporate users with encrypted digital bond issuance and investment, decentralized encrypted token current deposit and loan, stable currency QIAN2.0 casting/recycling and other services to meet the encrypted digital financial needs of different users. [2020/6/18] Synthetix Synthetix is a synthetic asset protocol realized through a very high mortgage rate. The protocol native token SNX can cast various synthetic assets such as sUSD through a mortgage rate of 5 to 10 times, simulating the real world or other The value of cryptocurrency assets fluctuates. But because of its extremely high mortgage rate, the capital efficiency of the agreement is relatively low. But even so, many people will question the sustainability of the Synthetix model, but fortunately, in the past few days, Synthetix has not stepped on or spiraled downward. Data from the chain, DeBank, and CoinMarketCap show that Synthetix’s operation has not experienced any significant problems in the past few days, which is comparable to the overall market volatility. TVL has dropped from the original peak of 3.8 billion US dollars to 2 billion US dollars, a drop of about 47%. Judging from the price of Synthetix’s core USD stablecoin sUSD, although the volatility is slightly higher, the worst case of unanchoring is an instantaneous price difference of about 7%, and the overall level remains at about US$1. Another important data is the mortgage rate. According to the official data platform of Synthetix, the mortgage rate is still maintained at 520%, and the data of other projects are also maintained at a relatively safe level. Data source: Maker "On-Chain Central Bank" Maker encountered a problem with the clearing system on March 12 last year, but performed well in the market fluctuations in recent days. It can be seen that the adjusted system design of the team has been improved. Solved the problems that existed last year. The circulation of DAI is currently about 4.4 billion US dollars, while the total amount of mortgage assets in the entire system is close to 7.5 billion, and the overall mortgage rate is about 170%. Judging from the liquidation data, Maker liquidated more than $41 million on May 19, an all-time high. These liquidations are part of the normal business logic, and no bad debts have occurred during the 312 period so far. In addition, judging from the price of the US dollar stablecoin DAI issued by Maker, it is more stable than Synthetix's sUSD, with lower volatility, and the price can be maintained at a stable level of around US$1. The performance of Terra, the US dollar stablecoin UST issued by Terra, is not satisfactory. The most serious unanchor situation has occurred since Terra issued UST. UST fell to a minimum of 0.93 US dollars and has not yet fully recovered. Compared with several other on-chain collateralized stablecoin protocols, the UST issued by Terra has a different mechanism, part of which relies on Terra's native token LUNA, so it can be regarded as an algorithmic stablecoin supported by LUNA. It is worth noting that with market fluctuations, the market value of LUNA has been lower than that of the stablecoin UST - many market commentators pointed out that this may lead to a spiral decline of the two assets: If users choose to sell UST in a panic , LUNA will crash sooner. The currency price of LUNA has fallen by half in the past 7 days, and it has rebounded. It may be because the market conditions have changed, or it may be that the team pulled UST back to $1 through a large amount of financial support. At present, the cryptocurrency community is quite concerned about the prospects of UST. There are many opinions that these stablecoin agreements with endogenous collateral are relatively risky, and it may be necessary to consider setting up some additional buffer measures to deal with violent market fluctuations. Float is a new generation of algorithmic stable currency that is not anchored to the US dollar. Float just completed its initial issuance last week, but it was unlucky. It encountered violent fluctuations in the ETH market at the beginning-you know, Float used ETH as collateral in the early days. So it will definitely be affected. The good news is that, judging from the price performance of Float, its issue price is US$1.618. Although the price has fluctuated, the daily auction activities have been successfully started and completed, and the price has been maintained at the target price through daily auction activities. Of course, Float has dropped as low as around $1. Overall, Float is not quite like a "stable currency". Its current role is more like absorbing the volatility of collateral (ETH) through the governance token BANK and the auction mechanism, and providing an asset with a relatively stable price. Perpetual Protocol, a leveraged derivatives trading protocol deployed on the Ethereum sidechain xDAI, is also one of the representatives of trading applications. More than a month ago, due to the violent fluctuations in the ETH market, the price in the agreement had a flash crash or a "pin-insert" transaction. ", nearly $1,000 lower than centralized exchanges. However, in this market, it can be known from the K-line chart that there is no obvious pin insertion.


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