Weekly fundamentals #54

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A walkthrough of the most interesting charts and trends in crypto, with a focus on key business drivers and protocol fundamentals. Let’s dig in!

Key highlights from the past week at Token Terminal:

📊 CoW Protocol, Quix, and Stratos are now listed on Token Terminal.

🎙 Watch our latest episode of 15-minute fundamentals with Optimism on YouTube, or listen to the audio version on any podcast platform.

Earnings leaderboard

Which projects have earned more in revenue than they have paid out via token incentives?

Top 10 projects by earnings in the past 7 days

Earnings = revenue - token incentives.If this number is negative, a project spends more on token issuance than it earns in revenue.

Explore the full earnings leaderboard here.

Charts to watch

A walkthrough of the most interesting charts and trends across the major lending protocols.

Total borrowing volume across major lending protocols has declined ~75% from $32B to $8B over the past year

  • The crypto lending market has seen a significant downturn in borrowing volume over the past year, with total borrowing volume across major lending protocols declining by 75%.
  • MakerDAO is relatively unscathed, with borrowing volumes only dropping by 40% in value over the past year (from $9B to $5.4B).
  • Compound’s cDAI borrowing volume was hit particularly hard, decreasing from $3.7B to $202M (-95%) over the past year.

Lending protocols with the largest borrowing volumes following launch tend to have negative earnings

  • Token incentives through liquidity mining programs are a particularly powerful tool that DeFi protocols use to bootstrap immediate adoption.
  • Lending protocols that give out the most token incentives typically also have the most successful launches when measured by borrowing volume, but this may come at the cost of negative earnings (revenue - token incentives).
  • This trend remains true for lending protocols regardless of the date of their launch, which may be in drastically different stages of the market cycle.
  • It is important to note that while token incentives may be one of the main expenses for DeFi protocols, the earnings metric does not yet account for expenses such as team salaries or other operational costs.

Aave’s borrowing volume on Optimism dissipated after OP token incentives ran out

  • The Optimism Foundation launched a liquidity mining program on Aave on 5 August 2022, announcing that 5M OP tokens are to be distributed over the next 90 days.
  • Within a week of the program’s launch, Aave’s borrowing volume on Optimism rose from just $5M to over $1.5B.
  • The borrowing volume then declined rapidly from $900M to $5M in early November 2022 within a week of the program’s end.
  • As of 27 November 2022, Aave’s borrowing volume on Optimism remains only at ~$4M.

BENQI and Compound currently have the highest P/S ratios out of all major lending protocols at 167x and 163x, respectively

  • With BENQI and Compound’s borrowing volume dropping ~99% and ~92% over the past year, respectively, they may currently be the most overvalued out of all major lending protocols.
  • Revenue accrued by BENQI and Compound also saw significant drawdowns:

Head over to for a more detailed view of the top blockchains & dapps.

This week’s video

The authors of this content, or members, affiliates, or stakeholders of Token Terminal may be participating or are invested in protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Token Terminal does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only, and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Token Terminal at any time without notice. Token Terminal accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.

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