December 18, 2023

Solana, Avalanche shine as ETH TVL falls by $909M

This past week, the total TVL balance across 220 Web3 ecosystems tracked by the 0xScope team decreased by $387.1M (-0.42%), slightly reversing last week's $7.33B increase. There were almost as many TVL gainers (109) as losers (110) among Web3 ecosystems over the past 7 days.

In this edition of the Web3 Hot Trends report, we discuss the latest trends and bright spots across Web3 ecosystems and projects.

Ecosystem TVL Growth

TVL is an essential indicator of how much capital is currently engaged in the decentralized finance (DeFi) space. Here are some key observations from TVL growth data we tracked this week.

1. Solana leads all gainers with its $242.5M TVL boost. Solana grew its TVL by 11.01% this week, continuing its long march upwards one year after going through major headwinds following FTX's collapse. While $SOL decreased by 1.8% over the past week, the token has risen by 20% in a month and 451.8% in a year. Solana, currently the fifth-biggest Web3 ecosystem by TVL, also saw a 4.5x rise in daily active users, which is currently at 162,000, while its recent TVL is at the highest point since before the FTX fiasco in November 2022. In addition, the platform has seen greater institutional interest in recent weeks, following reports of Solana usage by Visa and Shopify.

2. Avalanche continues to rise amid whale sell-off. Avalanche, which overtook Polygon last week to become the sixth-biggest Web3 ecosystem by TVL, grew its TVL further by 7.30%, thanks to an additional $96.4M in funds locked. $AVAX has grown by 77% in just one month, including 3.7% this week despite a recent sell-off due to profit-taking by whales. Amid this bull run, some Web3 analysts still think that Avalanche is undervalued despite its recent collaborations with JPMorgan and Citi.

3. Ethereum sheds the most TVL, smaller rivals pounce on the opportunity. On the other end of the spectrum, Ethereum lost $909.4M in TVL this week (-1.38%) as Web3 traders focus on new opportunites that have emerged in other smaller ecosystems. Taking advantage of this slight shift in Web3 capital are platforms such as Base (+$97.9M), Osmosis (+$57.3M), and Filecoin (+$29.3M), which grew their TVLs by 29.75%, 34.95%, and 18.44%, respectively.

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Project TVL Growth

Diving deeper into the projects’ TVL growth, the 0xScope team spotted positive trends from the projects that stood out this week:

1. Mantle's ETH staking product tops TVL gainers. Two weeks after its launch, the Mantle Liquid Staking Protocol (LSP) has emerged as a notable rival to market leader Lido. This week, the project received $175.3M more TVL, more than doubling its locked funds, while Mantle's ETH bridge increased its TVL by $57M (+21.66%)

2. MarginFi's rise factors heavily in Solana's momentum. This week, 12 Solana projects have gained at least $10M in TVL, but the biggest contributor is lending and borrowing protocol MarginFi. The protocol gained $64.8M in TVL (+28.53%) this week, while its lending arm added $62.2M (+29.62%). This rise, combined with contributions from other Solana projects, has resulted in Solana's current lead among top TVL gaining ecosystems.

3. Seamless Protocol singlehandedly lifts Base. Lending platform Seamless Protocol boosted its TVL by a whopping 948.60% (+$71.3M) following the recent airdrop and Coinbase listing of its $SEAM token. This TVL rise accounts for a huge majority of Base's $97.9M increase this week.

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Project User Growth

Project user growth can offer insights into the adaptability and popularity of specific projects. Here’s what stood out:

1. TinyTap keeps user growth lead for 3 weeks. Animoca Brands-owned educational app TinyTap has led all projects based on user growth for the third straight week, gaining 182,097 more users this week. As a result, TinyTap has grown its user base by 424,689 (+8.6%) over the past three weeks.

2. Avalanche DeFi projects see significant user growth. Among other factors, Avalanche-based DeFi projects Trader Joe and GMX have contributed to Avalanche's recent momentum, thanks to their healthy user growth this week, despite being DEXes that don't typically register huge boosts in user numbers. Trader Joe added 32,981 new users this week, while GMX grew by 7,694 new users.

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Users, as defined by 0xScope’s tools, pertain to real users behind addresses, calculated by 0xScope’s proprietary entity and bot recognition algorithm.

TVL stands for total value locked in a project.

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