ON–091: DeFi

Coverage on Cross-Chain Bridges, Solana, Polygon, and Kava.

Oct 1, 2021

ON–091: DeFi
⭐ About the editor: Spencer Noon is an investor at Variant.
⭐ Founders should reply directly to this email to get in touch.

This week our contributor analysts cover Emerging L1 & L2 Networks: Cross-Chain Bridges, Solana, Polygon, and Kava.

① Cross-Chain Bridges

👥 Brendan Murray + Aadharsh Pannirselvam

📈 Level of Daily Bridge Usage Reaches >5K Unique Addresses

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  • There is a significant infrastructural need to navigate from blockchain to blockchain safely, quickly, and cheaply. At present, the best available solutions are bridges. Analyzing trends across both directions of these bridges offers a deeper view into DeFi users' decision-making. Axie Infinity’s Ronin Bridge leads the way in the number of transactions. There exists a direct relationship between unique outbound addresses and price, while price seems to have a minimal impact on daily traffic across the bridge.
Flipside Crypto
  • Meanwhile, the Terra Bridge has increased engagement on Terra network since its launch in March. The increases in inbound volume shown below, combined with minimal change to the number of inbound/outbound addresses, show that whale activity on bridges has increased dramatically with price runs.
Flipside Crypto
  • The same relationship between news interest and traffic/interactive addresses has applied to Solana’s Sollet Bridge in the wake of a massive wave of public interest in Solana.
Flipside Crypto

② Solana

👥 Craig Burel

📈 Solana hits 40M tx/day & 100K daily active wallets

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  • Solana on-chain activity has maintained its uptrend through the second half of September, with daily (non-voting) txs breaking through 40M/day and daily active wallets hitting 110K. The increase in activity has likely been driven in part by a series of high-profile product launches over the summer and the ongoing Ignition Hackathon that runs through October 15th. Phantom (>500K WAU) and Solflare ($10.3B TVL) wallets rolled out updates that significantly improved the UX for using Solana dapps.
Solana Beach
  • A series of new Solana DeFi protocols have risen to prominence over the last few months, with TVL market leaders Saber ($2.83B), Sunny Aggregator ($2.36B), Raydium ($1.37B), and Orca ($711M) lifting the ecosystem’s collective TVL to $8.12B.
Image 2021-10-01 at 1.53.06 PM
  • Solana recently hit a new ATH for % of SOL staked in the network at 77%. SOL staking has been on a steady climb throughout the year and recently hit an inflection point, as Phantom and Solflare launched in-wallet staking, and liquid staking pools have gone live through Lido, Marinade, and Parrot.

③ Polygon

👥 Raphael

📈 Polygon achieves record growth with 288K DAU

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Polygon's userbase is exploding. Growing 38.52% week over week, the network averages over 287K unique daily active users. On September 27th, Polygon eclipsed Ethereum's users for the first time, spiking to over 350K.

User growth has many catalysts — First is NFT adoption. Since July, traders on Polygon OpenSea have multiplied 45.5x, and NFTs sold by 17.5x. Second, gaming is taking off. Arc8 is one example, achieving 104K DAU days after launch.

  • In addition to new users, existing users are re-engaging with Polygon at an incredibly high rate. Older cohorts are maintaining weekly retention rates of over 20%! In fact, many cohorts are displaying "smiling" retention curves, with retention improving over time.
  • The jump in users translate into higher network transactions. Transactions increased in 7 of the last 8 weeks, reaching 6.5mm tx/day. Despite the growth, average transaction costs remain well under a cent at $0.0059. Last week, transactions generated $38K/day for stakers.

④ Kava

👥 NullAp3

📈 Kava Swap Nears $100M Total Volume

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  • Kava Swap is a decentralized exchange and automated market maker (AMM) powered by the Kava Platform. Since the launch of Kava Swap to the Kava mainnet on Aug 30th, the cumulative total volume has grown consistently to approach $100M in the first 4 weeks. We believe that this growth was driven by the high demand from our users for a native swap that allows them to easily convert their assets on-chain without off-ramping from the Kava Ecosystem.
Kava Labs
  • As with other Kava Platform products, Kava Swap offers users a safe, reliable way to earn significant returns with their crypto. Since its launch a month ago, Total Value Locked (TVL) has grown to more than $24,850,000, with over 1.8M $SWP tokens paid out to liquidity providers in rewards.
Kava Labs
  • The Kava Ecosystem has shown consistently strong growth in TVL over time, with a combined TVL at writing of $400M+. With the addition of Kava Swap and the upcoming ETH bridge as onramps, along with the Kava Ignition Fund accelerating development, we anticipate that this trend will continue.
Defi Lama