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Network Coverage: DeFi
This week our contributor analysts cover DeFi: Abracadabra, Convex, and PoolTogether.
📈 Magic Internet Money Supply Surges Past $2.3B
Abracadabra money is a lending protocol allowing users to borrow a stablecoin (MIM) with interest bearing assets, the value proposition being you can unlock liquidity from yield-baring assets and leverage positions for further yield. The MIM market has surpassed $2.3B and is on track to overtake Terra's UST. Total value locked in Abracadabra is at ATH ($4B) - a 4x increase over October - 23% of MakerDAO's TVL. Overall this would indicate a clear PMF for yield bearing asset-based lending protocols.
MIM peg mechanics rely on arbitrage. The MIM has been able to relatively maintain its peg since inception despite a 3x in its monetary supply over just 1 month. MIM has a slightly higher peg standard deviation (0.0079) than its peers but this is still impressive given the network is in its infancy.
SPELL holders can stake to receive 75% of protocol fees. There are now over 7K sSPELL holders vs. 10K SPELL holders with this ratio increasing - a higher proportion of SPELL holders are now staking. This has been driven by the higher protocol fees which totaled $1.7M over the past week (ETH only).
📈 Over 2,000 Unique Prizes & Over $1M weekly
PoolTogether is a protocol for no-loss prize savings. Users deposit money to have a chance to win prizes and can withdraw their money at any time. The new V4 protocol launched two weeks ago. This new version uncaps the prizes that can be distributed. In the first two weeks, over 2,000 unique prizes were awarded and claimed. More unique prizes than have been awarded by the protocol in all previous years combined.
A portion of each prize is retained in the protocol reserves. All reserves contribute interest to future prizes creating a "perpetual growth" flywheel and increasing the expected value for all depositors. Reserves now exceed $1.3M and are growing by ~$50K per week.
A key metric for the protocol is total prizes awarded. There is now over $1M per week being distributed across all protocol created prize pools.
③ Convex Finance
📈 Convex Finance Crosses $12B TVL, Revenue $400M+
Convex Finance continues to climb the TVL leaderboards, attracting a sizable share of Curve LPs. Liquidity providers who stake on Convex Finance can take advantage of the socialized boost offered by the platform's significant portion of locked CRV tokens.
CRV continues to be locked as cvxCRV at a brisk pace, allowing Convex Finance to offer greater overall boosts to its LPs. Over 130M CRV tokens have been locked as of this writing. Convex fans have dubbed it #TheLockening on Twitter!
CVX token holders want their say in gauge weights; since the launch of the voting system, over 50% of circulating CVX has been vote-locked. Vote-locked CVX holders can tip the scales on how Convex allocates it's locked CRV in Curve Finance gauge weight votes.