Enzyme’s Q1 2024 Update

It’s been a while since we posted an update on Enzyme! Below we’ll share a few stats and trends, as well as updates on our grants. We will also share a rough timeline of upcoming events.

Q1 Highlights From Protocol Statistics

In Q1 2024, we’re pleased to report that Enzyme made a new USD-based all-time-high in Assets Under Technology of $253m.

Trading volumes within protocol’s vaults were approximately $104m for the quarter, a 41% increase quarter-on-quarter.

The protocol saw new inflows of $10.3m in aggregate throughout Q1.

The Top 3 vaults to receive the most deposits were: Super swETH ($3.7m), Diva Early Stakers stETH Vault ($1.85m) and ARC MV Taurus ($1.1m).

In terms of protocol usage through DeFi integrations, Uniswap v3 saw the highest number of trades (1,404 trades), followed by 1inch (1,216 trades) and then Paraswap (628 trades).

Q1 Trends & Observations

1. New use-cases are dominating Enzyme

The majority of Assets sitting under Enzyme technology today are not being used for the “fund management” use case that was originally envisioned eight years ago. New use-cases are emerging. Enzyme is being used for accelerating pre-launch liquidity by projects like Diva staking and being used by protocols like Swell to re-balance the staking ecosystem. It continues to be used by projects like Nexus Mutual to earn yield on their capital pool whilst being able to supply a reporting oracle which integrates nicely with their own protocol. In short, Enzyme’s flexible and modular structure is starting to appeal to builders as well as managers and we are increasingly leaning into these new opportunities as the DeFi landscape continues to evolve.

2. Liquid (re)staking landscape is increasingly more competitive

Diva and Swell have dominated headlines in the Enzyme ecosystem over the last few months by launching vaults on Enzyme to either bootstrap pre-launch TVL or attract assets post-launch. With the increasing competitiveness in the space throughout Q1, we saw withdrawals exceed new deposits for Vaults including Diva. This is creating a need for staking projects to evolve and find ways to have a competitive advantage. We expect to see more activity in this space (on Enzyme!) in Q2 as projects evolve to keep up with emerging competition.

3. Trading slippage decreasing

It was interesting to observe that the average slippage per transaction came down by 13% in Q1. This could be a sign of market liquidity and volumes increasing as sentiment has improved. With 1inch having just launched their v6 and Paraswap to follow suit soon, we expect these new releases to provide better pricing and lower gas costs for our users.

Q1 Grants

During Q1, we had two grant recipients that have been doing some exciting work which we’re excited to share.

Gorilla funds
Gorilla funds received a grant to connect an Enzyme vault to a Monerium bank account. Through a Safe module, their connection enables fiat from a Monerium bank account to be automatically converted to digital EURe and deposited into an Enzyme Vault. A demo of how this works by Jacob Sievers can be found here. Jacob and the team are continuing to build on this module and will keep us posted on their progress.

31 Third — Multi-Asset Trading & Index-like Automation
31 Third have developed advanced multi-asset trading capabilities. Their adapter allows managers of an Enzyme vault to find optimised trading routes for atomic multi-assets swap. In such a multi-asset swap, the vault manager simultaneously sells any selection of assets that the vault currently holds and buys any other desired assets (or the same assets but with different weights). In particular, this solution allows a manager of an index-like vault to regularly rebalance their vault into a target allocation with very little effort (or even completely automated using Enzyme’s custom automations).

These grants highlight the flexibility to build with Enzyme and our strategy of working with third parties to continuously provide new features for builders and managers. Aside from these, other grant requests are being assessed and we hope that some of them will materialise in Q2.

Future Directions & What To Expect In Q2

As we enter Q2, we are focused on a few core items:

• Repositioning of Enzyme: Enzyme has historically been viewed predominantly as a protocol for fund managers. However, we are realising the protocol has much more to offer builders in the space as we’ve seen with the likes of innovative new users like Diva, Swell and others. This quarter we’ll be re-launching the Enzyme website and repositioning Enzyme as a protocol for smart tokenized deposits. This can be used by asset managers and builders.
• Announcing Enzyme Liquid — A new vertical built on Enzyme.
• Release of the V5 roadmap — New protocol roadmap to be released at the end of April and will feature a more modular approach
• Release of 31 third automation — A new Enzyme module to fully automate rebalancing on vaults.
• New key DeFi integrations: Morpho Blue, Pendle
• Emphasis on building strategic partnerships; We have a number of projects and organisations reaching out to us across DeFi and recently a number of institutional and RWA players. We hope to have some announcements here soon.