Behind the “Rising Against the Trend” of TRON’s Ecological Lock-up: Low Utilization Rate of Lending Protocols

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Behind the "Rising Against the Trend" of TRON's Ecological Lock-up: Low Utilization Rate of Lending Protocols
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DeFi is cold. As of May 27, Defi Llama shows that the sum of TVL in DeFi applications on major chains has dropped by about 50% in the past month. At the same time, TRON’s TVL bucked the trend and rose by 42.7% during this period, ranking third among all smart contract platforms after Ethereum and BSC. The price of TRX also rose by nearly 30%. The PANews analysis found:

1. TRON’s TVL mainly comes from four projects: JustLend, JustStables, SUNSwap, and SUN.io. The first two belong to the loan category, and the latter two belong to the transaction category.

2. JustLend has the largest TVL, with an increase of 48.54% in the past month, and the growth rate is also the largest. The borrowing volume of USDD accounts for 78% of the total borrowing, and the utilization rate of assets such as BTC and USDC is less than 1%. The increment of JustLend TVL mainly comes from the increase of BTC, USDC, TRX and other token deposits, and has little to do with USDD deposits.

3. The increase in TVL of JustStables mainly comes from the price increase of TRX. The borrowers are very concentrated. The top 15 CDPs (collateralized debt positions) account for 99.8% of the total USDJ borrowings; only 5 addresses on the entire platform have conducted 18 CDPs in the past week. operate.

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4. SUN.io and SUNSwap both belong to the SUN ecosystem. The new liquidity comes not only from USDD itself, but also from stablecoins and other assets paired with USDD.

5. The launch of USDD has doubled the liquidity of the stablecoin trading DEX SUN.io, which may not have much impact on the TVL of other protocols.

The four projects of JustLend, JustStables, SUNSwap, and SUN.io will be introduced separately below.

JustLend’s TVL has increased by 48.54% in the past month; the utilization rate of mainstream coins is less than 1%

JustLend is a lending protocol on TRON that originated in the summer of 2020 when DeFi was just beginning to heat up, and its business capabilities seem to have been further developed recently. JustLend’s current TVL is $2.79 billion, up 48.54% from May 1 to May 27, hitting a new all-time high. DappRader shows that JustLend had about 500 daily users over the past week.

Taking a closer look at deposits and borrowings on JustLend, there is currently a total of $3.19 billion in deposits and $400 million in borrowings in the protocol. Deposits mainly come from BTC, USDC, and USDD, which account for 27.94%, 26.01%, and 11.97% of total deposits, respectively. The borrowings mainly come from USDD, USDT, and TUSD, which account for 78%, 10.04%, and 5.91% of the total borrowings, respectively.

Among them, the newly launched algorithmic stable currency USDD has a deposit of 382 million US dollars and a loan of 314 million US dollars, with the highest utilization rate of funds. While USDD borrowings have accounted for 78% of the total borrowings, BTC, USDC and other assets are almost completely unused, which means that these funds are basically unborrowed, and the capital utilization rate is less than 1%.

More than 82% of the deposited USDD has been lent out, and the USDD collateral factor is 0.85, that is, every time a user deposits 1 USDD, he can use this as collateral, and then borrow 0.85 USDD. USDD’s 24.45% deposit APY (JST is locked) is also much higher than other stablecoins (USDT collateralization factor is 0.75, deposit APY is 2.1%), so some users may use USDD to revolve loans for mining purposes, resulting in USDD has a higher utilization rate. Because the vast majority of USDD has been lent, USDD has less direct impact on JustLend’s TVL. Of course, it is also possible that some users deposit mainstream currencies such as USDC and borrow USDD, which indirectly causes the growth of JustLend TVL.

Although the price of TRX has risen recently, because the deposit of TRX is only 380 million US dollars, it is not enough to cause a high proportion of TVL growth, so more comes from the increase in the number of deposits such as BTC, USDC, and TRX.

On May 29th, JustLend adjusted the USDD deposit algorithm, and only distributed income to the net deposit (total deposits – total borrowings). The USDD deposits and borrowings dropped significantly, but the total deposits of JustLend did not change significantly. JustLend’s TVL has less impact.

JustStables only 5 addresses a week for CDP operations

JustStables, which is owned by the Just Network along with JustLend, has seen its TVL increase by 18.06% over the past 30 days to $1.41 billion. This is a lending protocol similar to Maker DAO, borrowing stablecoin USDJ through overcollateralization of TRX etc.

According to the business data of JustStables, the total value of pledged assets is $1.44 billion, of which $1.39 billion is TRX. Therefore, it can be basically determined that the recent TVL growth of JustStables mainly comes from the price increase of TRX.

Although the TVL is high, the number of users of JustStables is relatively small recently. In the past 7 days, only 5 addresses have performed 18 CDP operations in total. One day has 0 CDP operations, and 4 days has 1 CDP operation. , the number of CDP operations on one day is 4 times, and the number of CDP operations on one day is 10 times.

The distribution of borrowings is also highly concentrated, with the top 15 CDPs accounting for 99.8% of total borrowings. Among them, the CDP IDs of the four largest loans are all between 4666 and 4684, which may be closely related, and they account for 48.6% of the total loans.

SUNSwap TVL is still mainly from the V1 version

SUNSwap, the early JustSwap, was later acquired by SUN.io and renamed SUNSwap. It is a DEX in the TRON ecosystem, and TVL has grown by 13.06% to $990 million in the past month.

Currently, SUNSwap includes three versions, V1, V1.5, and V2. Among them, the liquidity of the V1 version accounts for the vast majority, about 820 million US dollars. SUNSwap V1 is similar to Uniswap V1, and the trading pair must contain the native token of the public chain, namely TRX.

In the case that SUNSwap TVL has not risen much, the rise in the price of TRX is an important reason, in addition to the newly added trading pairs such as USDD-USDT and USDD-TRX.

SUN.io grows 114% TVL due to USDD introduction

Defi Llama shows that the TVL of SUN.io has increased by 114% to $530 million in the past month, and only the stablecoin part is counted here.

Now that SUNSwap mining has also been incorporated into SUN.io, the TVL of the entire SUN ecosystem is $1.53 billion, including $990 million in SunSwap and $530 million in stablecoins in SUN.io.

There are four stablecoin pools included in SUN.io:

The liquidity of 2pool is US$124 million, with USDD accounting for 49.18% and USDT accounting for 50.82%.
The liquidity of 3pool is US$160 million, USDD accounts for 34.82%, TUSD accounts for 28.22%, and USDT accounts for 36.96%.
The liquidity of Old 3pool is 223 million USD, USDJ accounts for 25.01%, TUSD accounts for 29.98%, USDT accounts for 45.01%, Old 3pool’s LP token is also called 3SUN.
The liquidity of the USDC pool is USD 46 million, USDC accounts for 50.5%, and 3SUN accounts for 49.5%.

The calculation shows that the TVL increase of SUN.io is approximately equal to the sum of the newly opened 2Pool and 3Pool liquidity. That is to say, the increment of TVL not only comes from USDD, but also includes other stable coins that form a trading pair with USDD.

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