Market Cap vs TVL Analysis (data as at 17 Dec)

image by Zoltan Tasi

Our 16 selected DeFi projects “Mcap/TVL ratio” average is down at 0.15 from last month 0.28 (i.e. $0.15 market cap for every $1 (TVL) value locked. The Mcap/TVL ratio (using fully diluted Mcap) is also down from 0.65 in Nov to 0.37 as at 17th Dec 2021. I have included a new diagram to reflect this data over time below.

Currently, at these Mcap/TVL ratios (Mcap & fully diluted Mcap), there has never been a better time to accumulate defi projects since this data set started in Feb 2021 - remember to DYOR!

The following 3 projects have below average ratios (ie the best three projects) at 17th Dec and we’ve included the data from Nov as reference: $LDO, $BAL and $CRV. 

$CVX, $MAKER, $AAVE and $COMP are all worthy mentions, with historically low MCap/TVL ratios.

Projects less than the average have usually performed better than their peers - DYOR

Data as at 17th Dec 2021

From a market cap. perspective, $UNI is still out ahead, with $CRV making a challenge in difficult market conditions. Of interest here is the only project with an increase in Mcap was $CVX - 14.43% increase from November 2021.

Market Cap - observations (UNI & CRV)

The TVL chart (as at 17th Dec) shows the continued strength of $CRV, $MKR $CVX and $AAVE, however it is definitely worth pointing out the growth in TVL of following 3 projects $MKR (+95.6%), $UNI (+56.3%) and $CVX (14.8%) since early November 2021.

TVL Chart - observations (MKR & UNI)

DISCLAIMER

This publication is general in nature and is not intended to constitute any professional advice or an offer or solicitation to buy or sell any financial or investment products. You should seek separate professional advice before taking any action in relation to the matters dealt with in this publication. Please also note our disclosure here

Market Cap vs TVL Analysis (data as at 1st November)

image by Zoltan Tasi

Our 16 selected DeFi projects “Mcap/TVL ratio” average is down at 0.28 from last month 0.34 (i.e. $0.28 market cap for every $1 (TVL) value locked. The Mcap/TVL ratio (using fully diluted Mcap) was also down from 0.65 in Oct to 0.60 as at 1st Nov.

The following 3 projects have below average ratios at 1st Nov and we’ve included the data from Oct as reference: $CRV, $BAL and $CVX (New addition). $COMP is a worthy mention, staying flat with a MCap/TVL ratio of 0.2 (projects less than the average have usually performed better than their peers - DYOR!).

Data as at 1 Nov 2021

From a market cap. perspective, $UNI is still way out ahead (however levelling off) , with $CRV again showing upward strength and momentum.

Market Cap observation (UNI & CRV)

The TVL chart (as at 1st November) shows the continued strength of $AAVE, $COMP and $MKR, however it is definitely worth pointing out the month on month growth of following 3 projects $CRV (+35.4%), $CVX (66.62%) and $SUSHI (37.68%).

TVL - Total value Locked

DISCLAIMER

This publication is general in nature and is not intended to constitute any professional advice or an offer or solicitation to buy or sell any financial or investment products. You should seek separate professional advice before taking any action in relation to the matters dealt with in this publication. Please also note our disclosure here

DeFI’s Yield farming - what is it?

A lot of the questions we get today in the crypto space are about decentralised finance (DeFi). Of late, yield farming has joined the conversation in a big way. Like all things new, there is large amount of information to digest and understand, this is not helped when the prices of these Defi tokens are going parabolic. The propensity is for people to jump in head first without doing the necessary due diligence.

We recently came across a fantastic article that does a great job at covering all the basics and various names in the space. Select the button below to access this article “What Is Yield Farming in Decentralized Finance (DeFi)?”

As the article perfectly concludes “What else can this decentralized financial revolution bring? It’s impossible to see what new applications may spring up in the future built on these current components. Nevertheless, trustless liquidity protocols and other DeFi products are certainly at the cutting edge of finance, cryptoeconomics, and computer science.

Undoubtedly, DeFi money markets can help create a more open and accessible financial system available for anyone with an Internet connection”

DEFI - why is it so important?

This week, I think its about time we cover some DeFi talk. So what is it, well… I’m not going to tell you what it is as there are frankly hundreds of articles out there on Decentralised Finance (DeFi) - This is a very good place to start though - What is DeFi?

Back to the main question - it is important not because it is going to replace banks, but because it will give people across the globe access to an alternative.

As an opinion piece, for me, choice is what it is all about in the end. You can decide to use your existing institutions or you can try a new one. Obviously the new one, will need to be superior in order to lure you away, so will have to work harder to gain trust and ensure its customers are treated fairly ( …while we are on this point, our regulators should take note, your job is to ensure fair competition to ensure all people get the best possible deal. It is not to pick sides - because if you do - you WILL be replaced).

Obviously I don’t really want to preach here, but if you are interested:

• make sure you look into how DAI is created;

• try understand why MakerDao’s protocol is so special;

• look at high interest savings from Compound;

• try to see how powerful a force “communities who work together” can be with their DeFi integrations - ie Uniswap, Link, KNC, Oasis etc etc etc.

Lastly, another good read on the topic is - A beginners guide to DeFi