January 23, 2024

Few bright spots emerge as Web3 loses $6.4B in TVL

This past week, the Web3 industry's total TVL plummeted to $100.57B, recording a loss of $6.34B (-5.95%). Out of the 221 Web3 ecosystems tracked by the 0xScope team, 180 (81.45%) sustained TVL losses. Bitcoin's recent retreat to $40,000 had likely dragged the rest of the industry down, although a few platforms and projects still showed major growth.

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. Ethereum loses $4.42B in TVL. In a week that saw major Web3 ecosystems lose a noticeable portion of their TVLs, Ethereum shed 5.82%. This decline coincides with a 7% decrease in $ETH's price this week and a recent sell-off of 700 $ETH by the Ethereum Foundation.

2. PulseChain leads gainers with a $126.1M TVL rise. In a week when only about 20% of Web3 platforms have shown TVL increases, PulseChain grew its TVL by 50.93% to $373.7M. The platform saw a steady increase in its active wallets in recent weeks, now at over 700,000. PulseChain's 50.93% growth follows its 97.31% rise last week. In effect, the platform's TVL went up from $148.3M to $373.7M, showing 2.52x growth in just two weeks.

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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. Only 12 projects add at least $1M to TVLs. Understandably, with most of the major Web3 ecosystems seeing lower TVLs this week, only a small number of projects managed to grow their TVLs. Only 26 projects saw TVL growth of at least $100,000, with just 12 of them making it past the $1M mark.

2. Top TVL gainer Curve Finance sees growth on 2 blockchains. Major DeFi project Curve Finance is this week's leading project in terms of TVL growth, with its Ethereum version gaining $320.4M (+19.16%) and its Arbitrum version adding another $49.4M (+101.34%). The major rise in Curve's TVL on Arbitrum can be traced to the arrival of $ARB incentives on Arbitrum liquidity pools.

3. Notional Finance expands TVL by 114.35%. Among projects that gained at least $1M in TVL, Arbitrum-based Notional Finance is the only one outside of Curve FInance that grew its TVL beyond 100%. Notional's $3.3M TVL growth coincides with the project's open debt growth from $2.9M to $12.9M over the week.

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Weekly Project Volume (NEW)

In this new segment of the report, we track which Web3 projects have seen the greatest increase in volume over the past week. This metric is an indicator of the hottest projects in terms of incoming money flow or increased usage. Here’s what stood out:

1. Raydium tops volume growth ranking with a $507.6M rise. Solana-based DEX Raydium expanded its weekly volume by 32.02% to $2.09B this week. According to its website, Raydium's total lifetime volume is at $69.6B.

2. Sui-based DEX sees 176.27% volume increase. Riding on the recent rise of Sui, KriyaDEX, which claims to be the fastest DEX on the Sui network, did see a rapid increase in its weekly volume. Specifically, this DEX added $14.7M, or an impressive 176.27%.

Weekly Project Fee (NEW)

The 0xScope team has also added this new segment to today's report to assess which projects are raking in significant revenues from their operations. Here’s what stood out:

1. Solana takes home about $3M in fees this week. Topping our list this week is Solana, which took home $1M more in fees compared to last week, for a 52.56% growth rate. Solana has seen increased momentum and activity in recent months, including a gradual rise of its $SOL native token to the No. 4 spot in crypto token rankings.

2. Curve Finance received 3x more in fees this week. With Curve being one of the few bright spots in TVL growth this week, its intake of $1.2M in fees is also notable, as it only took around $300,000 in the previous week.

Project User Growth

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

1. Polygon-based chess game grows its user base sevenfold. Anichess, a Web3 gaming app created by Anomica Brands and Chess.com on Polygon, has seen its user base rise by 709.43% from 2,173 to 17,590, after adding 15,416 new users.

2. Beyond Anichess, other Polygon projects see major user growth. Five of the top 10 spots in our user growth rankings are occupied by projects built on Polygon, including ghostNFT (310.60% user growth), ETHDenver (34.80%), Ver (34.80%), and Wormhole (22.96%).

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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 the total value locked in a project. 0xScope computes an ecosystem's TVL as the sum of the TVLs of all projects under that ecosystem. Crypto assets bridged to an ecosystem without being stored in Web3 projects do not count under that ecosystem's TVL count.

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