Research Summary

The report analyzes the performance of Real-World Assets (RWAs), Decentralized Finance (DeFi), and the Ethereum ecosystem. It highlights the market cap of tokenized RWAs, the number of addresses participating in DeFi, and the vibrancy of Ethereum’s Layer 2 (L2) ecosystem.

Key Takeaways

RWAs Market Cap Hits All-Time High

  • Record RWA Token Market Cap: The total RWA token market cap reached an all-time high of $2.774 billion on February 2, 2024. The market of tokenized financial assets, including treasuries, bonds, private credit, and real estate, also made new highs of $1.614 billion on February 8, 2024.
  • Declining Dominance of RWAs: Despite the record market cap, the use of RWAs in on-chain products has been receding, indicating a growing preference for crypto-native assets over RWAs on-chain.

DeFi User Participation Near Two-Year High

  • High DeFi Participation: The number of addresses interacting with DeFi across major Layer 1 (L1) and L2 networks is near two-year highs at 445,000 addresses. Decentralized exchanges (dexes) have been the most common type of DeFi applications that users interact with when using DeFi for the first time.

Ethereum Ecosystem Remains Vibrant

  • Active Ethereum Ecosystem: In the Ethereum ecosystem, the number of daily active addresses have reached all-time highs and daily transaction counts continue to push higher. L2 revenues have also seen substantial growth over the last month.
  • Strong L2 Performance: Despite criticism of declining user counts and general activity on Ethereum, its ecosystem of L2s remains vibrant with transaction counts pressing against all-time highs.

DeFi User Retention

  • Strong DeFi User Retention: Retention among dex users was notably strong in the three months leading into January 2024. Solana experienced the greatest retention of dex users in the chains observed over the last five months, which can be attributed to Jupiter’s airdrop campaign.

Actionable Insights

  • Monitor RWA Market Trends: Despite the record market cap of RWAs, their declining dominance in on-chain products indicates a shift in preference towards crypto-native assets. Stakeholders should monitor these trends to understand the evolving dynamics of the DeFi market.
  • Assess DeFi User Behavior: The high participation in DeFi and the strong user retention, particularly on dexes, suggest a robust and growing DeFi market. Stakeholders should assess user behavior to identify opportunities and challenges in the DeFi space.
  • Understand Ethereum Ecosystem Dynamics: Despite criticism, the Ethereum ecosystem, particularly its L2s, remains vibrant. Stakeholders should understand the dynamics of the Ethereum ecosystem to make informed decisions about their involvement in this space.

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