The Data-Driven Answer to“Where are the Opportunities in Crypto”?
Wealth is built during the bear market. But where can we find the opportunities?
Let’s check out the data-driven answer from the TVL (Total Value Locked) trend.
What is TVL (Total Value Locked)?
Basically, TVL is a way to measure the value and utilities of a chain/protocol. Today, Ethereum accounts for 65% of the TVL among all the L1/L2 chains, i.e. the king of value and utilities.
How does TVL find the opportunities?
TVL consists of two components, i.e.
TVL = TTL (Total Tokens Locked) * Token Price.
TTL measures the true demand of the utility — Price measure the market demand vs. supply Combining the trend of both, magic happens.
TVL did a good job in the previous bear market.
Both $LUNA and $RUNE were heavily impacted by the broader market last summer (June 2021). On the contrary, their TTL went up, showing the true demand was growing. As a result, moon in Aug.
What does it say now?
Looking at the big pic (all chains), TVL was in a steady uptrend until Apr 2022, followed by a huge cliff in May, then remained flat. The cliff was explained by the macro market condition + the Terra $UST attack. We are in a bear market for sure.
Where are the opportunities?
Opportunities are not in the big picture but in the individual chains. Because TVL is partially determined by the price, which is impacted by the macros, for cleanness, here I use the TTL instead, which measures the TRUE demand.
Top performers by TTL in the past 2 months
- $NEAR: 324%
- $XIN: 185%
- $FUSE: 149%
- $MOVR: 146%
- $ROSE: 145%
- $ALGO: 126%
- $XPR: 116%
- $AURORA: 103%
- $BOBA: 91%
- $GLMR: 90%
I hand picked some for demonstration purpose.
$NEAR: 324%
$NEAR was built from the ground up with advances in community consensus (decentralization), database sharding, and usability. Despite the stablcoin fiasco, the stablecoin $USN was believed to be a more promising alternative
$XIN: 185%
Mixin is a light-weight P2P network designed for digital asset transfer. Compared to other larger chains, it focus more on the day2day app offerings such as Mixin Messenger, Telegram wallet bots, etc.
$ALGO: 126%
Algorand is intended to solve the “blockchain trilemma”: the claim that any blockchain system can have at most two of three desirable properties: decentralization, scalability, and security. It has a mature ecosystem already covers NFT, DeFi, payment.
$LUNA Terra
Yes, you are seeing it right, the moment the token supply shoots up to the sky, the price falls. Good lesson learnt here.
$FTM Fantom
Not looking good. The TTL and price are pretty much controlled by Andre Cronje’s quit, rejoin, and frustrations.
$AVAX Avalanche
The home chain for DeFi innovators and degens. It shows a good overall uptrend. Hope it continues.
$WAVES WaveChain
The ecosystem attracted a good amount of liquidity during the $UST attack because people were looking for stablecoin alternatives. Later at the end of May, the de-peg incident scared most of them away, again.
$ETH Ethereum
Lastly, the king. Big capitulation on 10 May (Terra fiasco), followed by a good looking recovery. In another word, $LUNA did some great damage to the entire crypto world, scaring people away. The recovery shows belivers will keep believing.
TL; DR
$NEAR is looking good — $FTM is concerning — More than half of the well-known L1/L2 chains are either seeing a good steady uptrend, or a recovery: Good sign for crypto & DeFi — $LUNA hurt crypto — TVL and TTL are useful, I will keep watching and sharing
