SoDeFi : DeFi Insights Newsletter #4

Welcome to the SoDeFi Insights Newsletter!

SoDeFi Insights provides a bi-weekly perspective on the DeFi landscape, examined through a data lens.

The newsletter is structured into three parts:

1. Weekly Summary

2. Deep Dive into TVL and Yield

3. SoDeFi Scoring League Tables

Weekly Market Summary

Cryptocurrency markets have continued strong 2024 with another push into March. Riding of the strength of the Bitcoin ETF launch, the upside is seeing both a rollover into altcoins and inflows from new users. The rally in price of coins outside of the largest two, BTC and ETH, suggests that retail traders and investors are re-emerging onto the scene. Looking forward, two catalysts are in place for the space to gain further ground; firstly there is significant buzz around and Ethereum ETF approval and secondly a change in interest policy towards easing of rate increases. Both catalysts would contribute to further strong rallying of prices.

TVL Climbs to Highest Levels in Two Years

Total Value Locked (TVL), as measured by SoDeFi, inched up to annual highs over the past week at $55 billion. SoDeFi tracks TVL at a pool level, taking pools tracked by DeFillama which both have positive TVL and yield above zero. The SoDeFi methodology removes double counting due to staking.

Looking at the ten largest chains by TVL, the increase in TVL mirrored the increases in crypto currency prices. All of the largest chains increased their TVL over the past seven days. Among the ten, Base led the way with a growth of over 35%. Solana and BSC were the other chains with strong growth over the past week.

Yield on the Rise

DeFi yield continued its upward momentum through Feb and into March. The past 4 week. Non-stablecoin yield is more volatile and reflective of broader trading activity, the yield peaked after the buzz of the Bitcoin ETF launch but largely subsided through most of February. Now, we are seeing DeFi activity pick and yields increasing.

Stablecoin yield, where all tokens within the pool are stablecoins, has climbed towards 15% over the past two weeks. Stablecoin yield has been remarkably, consistent through 2024. The uptick seen over the past week suggests that both lending and leveraged strategies are being increasingly utilized.

Unsurprisingly, the chains with the largest spread of yield opportunities where the same chains that saw the largest increase in TVL over the past seven days. Base and Solan presented the largest spread of yields of non-stablecoin pools. The spread suggest that the highest yield opportunities are present on these chains.

Within stablecoin pools, Base was again the leading chain with both average yield and yield spread heads and shoulders above the other chains. Base looks like a leading yield opportunity over the coming weeks.

The second highest average yield was recorded by Sui. Sui has climbed into fifth place in terms of TVL of stablecoin pools. The rank is a reflection of consistent yield opportunities driving new deposits into the ecosystem.

DeFi Scoring Tables

SoDeFi score combines TVL and APY to screen for the most sustainable yield, full explanation on scoring mechanism can be found here. Below are the non-stablecoin and stablecoin pool rankings using the performance over the past seven days.

Across, non-stablecoin pools Ethereum had the largest number of pools across the top 20. followed by Arbitrum and Base.

The stablecoin pool rankings are much more diversified across the largest top ten less concentration among single chains. A notable feature of the rankings is the average APY across the rankings with the vast majority of individual pools

Thank you for tuning into the SoDeFi Insights Newsletter. Stay tuned for my next post, where I’ll be sharing an updated overview of the SoDeFi scoring methodology. As always, happy yield hunting!