Research Summary
The report provides an in-depth analysis of various DeFi protocols including Liquity, Morpho, Compound III, Gearbox PURE Margin Trading, and Aave. It highlights their recent performance, key metrics, and developments. The report also discusses the impact of these protocols on the broader DeFi ecosystem.
Key Takeaways
Liquity’s Performance and Developments
- Liquity’s Growth: Since its launch, Liquity has seen significant growth with LUSD and LQTY holders reaching all-time highs. The protocol has also diversified its treasuries into stablecoins like RocketPool and Gearbox.
- Integration with Starknet: Liquity recently integrated with Starknet, allowing users to borrow LUSD with no minimum loans and pay Layer 2 gas fees. This has expanded LUSD’s presence across six different chains.
Morpho’s Lending Protocol and Optimizers
- Efficient Lending Markets: Morpho, a lending protocol on the Ethereum Virtual Machine, has reached $1.5B in deposited value and $900M in borrowed value across its iterations.
- Peer-to-Peer Matching: Morpho’s Aave V2 Optimizer has $680M deposited with about $280M matched peer-to-peer, enhancing user rates by as much as 1%.
Compound III’s Market Deployment and Performance
- Market Deployment: Since launching its first market, USDC on Ethereum mainnet, Compound III has deployed a total of 7 markets across 4 chains.
- Performance: Compound III’s Net Earn APY spiked to 15% for USDC on Ethereum V3, reaching market utilization at 95%. Borrowing increased 22%, from $313M to $384M, over the past 90 days.
Gearbox PURE Margin Trading
- Leverage Trading: Gearbox PURE Margin Trading enables users to leverage trade on DEXs like Uniswap, Curve and more. This has resulted in DEX liquidity constantly being above $10M on majors in a 2% range.
- Profit Settlement: PURE settled $45K in profits in week 1 as lenders still earned positive APYs. Despite funding fee increases, PURE’s ETH borrow rates remained <13% while BTC and alts remained below 10%.
Aave’s Market Leadership
- Market Dominance: Aave remains the clear market leader across major onchain metrics – daily fees, active loans, and TVL. The protocol generated $125M in cumulative fees since January 2023, with annualized fees projected to hit $286.6M in 2024.
- Surge in Deposits and Borrows: Aave v3 saw a material surge in deposits and borrows beginning in Q4 2023 that has continued into the new year. DAI deposits have made up >85% of all new volume during this span.
Actionable Insights
- Monitor Liquity’s Expansion: With Liquity’s integration with Starknet and its presence across six different chains, it’s crucial to monitor its expansion and the potential impact on the DeFi ecosystem.
- Assess Morpho’s Lending Efficiency: Morpho’s efficient lending markets and peer-to-peer matching offer potential for improved lending rates. Assessing its performance could provide insights into the future of DeFi lending.
- Understand Compound III’s Market Strategy: Compound III’s market deployment and performance metrics provide valuable insights into its market strategy and potential growth trajectory.
- Explore Gearbox PURE’s Leverage Trading: Gearbox PURE’s leverage trading and profit settlement mechanisms offer an alternative to traditional trading methods. Exploring these mechanisms could provide insights into the future of DeFi trading.
- Research Aave’s Market Leadership: Aave’s market dominance and surge in deposits and borrows highlight its strong position in the DeFi sector. Researching its strategies and performance could provide valuable insights into successful DeFi practices.
