At the moment when the attention of the entire circle is almost preempted by NFT Summer, the dazzling performance of the Avalanche avalanche agreement has once again added a weight to DeFi Summer in 2021.
Original title: The lock-up amount has flowed into 1 billion US dollars in 3 days. What did the avalanche agreement do right?
Written: The Way of Defi
On August 22, Avalanche TVL broke through US$1 billion for the first time, ushering in a new milestone. On August 25, TVL reached US$2 billion for the first time. The market value of the avalanche token AVAX has grown from US$1.7 billion to US$8.8 billion in more than a month, and it once ranked among the top 20 crypto markets in the world.
At present, there are more than 100 ecological projects on Avalanche, including storage and computing (3), cross-chain (18), DeFi (34), NFT (11), AVAX native ecological project (9), Layer 2 (2), basic tools (7), oracle machine (1), wallet (9), other (8), the ecological category is basically complete.
So, for ordinary users, how to share the avalanche growth dividend? Why did Avalanche dominate the narrative of the new public chain at this time? Compared with BSC and MATIC, is the current valuation of Avalanche reasonable?
Image source: https://twitter.com/jayks17/status/1429789793764978692
Into an avalanche
The avalanche chain is strange, including three built-in blockchains: the transaction chain (X-Chain), the platform chain (P-Chain), and the contract chain (C-Chain).
Image source: https://docs.avax.network/learn/platform-overview
When transferring external ecology and avalanche ecological assets, for example, mentioning the exchange’s AVAX to the avalanche protocol requires the use of X chain . The X chain has a certain degree of anonymity, and a new address is automatically generated after each asset change. Of course, the original address can still be used.
When Avalanche Ecology participates in the DeFi project, the C chain is used. When using AVAX to participate in staking, the P chain is used.
The 3 chains of AVAX can be freely converted inside the avalanche wallet.
Although Avalanche supports EVM, when setting up a wallet, you still need to use the Avalanche wallet to generate an address, and the address generated directly with metamask is not available.
The commonly used avalanche wallet is the Avalanche wallet . After generating the wallet, properly keep the mnemonic phrase. Click “manage Keys” on the left side of the control panel, import the private key of the C chain into Metamask, and then customize the avalanche RPC.
Avalanche RPC settings:
Network Name: Avalanche Network
New RPC URL: https://api.avax.network/ext/bc/C/rpc
ChainID: 0xa86a or 43114
Symbol: AVAX
Explorer: https://cchain.explorer.avax.network/
From the exchange or through the Avalanche Bridge ( AB cross-chain bridge ) to transfer assets to the avalanche protocol, you can use the “little fox” to participate in various DeFi projects.
Note: Most exchanges default to the X chain address. After the transfer, you need to enter the avalanche wallet and transfer to the C chain through the “Cross Chain” on the left side of the control panel. The AB cross-chain bridge can only cross Ethereum at present, and can be used to transfer ERC20 tokens from Ethereum to Avalanche’s C chain. All assets that cross over will be automatically converted into assets with the “.e” identifier (such as LINK. e, WBTC.e, USDT.e).
Head DeFi Project
The DeFi project on Avalanche can be found at the following URL
Ecosystem: https://www.avax.network/ecosystem
List of mining pools: https://markr.io/#/pools
TVL: https://defillama.com/chain/Avalanche
Lending and DEX are the two cornerstones of the development of DeFi, such as Ethereum, BSC, and Avalanche.
Benqi
According to data from defillama.com, Benqi, the largest lending agreement in the avalanche, currently has a lock-up volume of US$1 billion, and TVL ranks first, and is the only project with TVL exceeding US$1 billion. The DEX project Pangolin ranked second, and the TVL was about US$380 million.
Benqi went live on August 19, in order to stimulate new users and the Avalanche Foundation to launch a 90-day liquidity mining incentive plan. Users can obtain AVAX and Benqi token Qi at the same time by borrowing on the platform, with a total value of 3 million U.S. dollars.
If you compare the loan agreement based on the FDV/TVL ratio, the values ​​of the projects on AAVE, Compound, and Maker on Ethereum are basically around 0.4, which is relatively uniform, while the value of Venus on BSC is 0.24, which is lower than the values ​​of the previous projects. Half, this may be related to the natural high premium of the Ethereum ecological project.
At present, the value of BENQI is 1.41, which may be overestimated in the short term. Of course, this is related to BENQI’s liquidity mining rewards.
Pangolin
Pangolin, nicknamed the pangolin, is the largest DEX on the avalanche and went live on February 10. Unfortunately, it happened that BSC ecology was in full swing at the time, and not many people noticed the existence of pangolins.
In April, pangolins launched on-chain governance, which was favored by the founder of Avalanche, Professor Gun.
In May, pangolin TVL exceeded US$300 million for the first time. Since then, it has fallen all the way and lasted until mid-July, when TVL fell to 100 million U.S. dollars, a drop of nearly 70%.
On July 29, Avalanche launched the new Avalanche Bridge (AB), which replaced the old Avalanche-Ethereum Bridge (AEB) launched in February. The new cross-chain bridge is built using Intel SGX Enclave technology, which has greatly improved security and at the same time performance is 5 times faster than the original.
Professor Gun said bluntly at the time: The new Avalanche Bridge is a leap in bridging technology and will become the growth engine for Avalanche’s next phase of growth.
Image source: https://twitter.com/avalancheavax/status/1420746276228849666
This is indeed the case. The TVL of pangolins has increased significantly with the introduction of cross-chain bridges, and has returned to US$300 million not long ago.
Similarly, based on the comparison of the FDV/TVL ratio for DEX projects, the values ​​of the top TVL DEXs such as sushiswap, pancakeswap, Quickswap, and MDEX are basically maintained at 0.6-1, while uniswap is as high as 3.26. This may be related to the fact that the leading projects on Ethereum can enjoy high premiums. The value of pangolin is 4.8, which is higher than uniswap, and there is a risk of overestimation.
In addition, the one-stop integrated trading application Trader Joe and the machine gun pool Yield Yak (YAK) are also two agreements with more than 100 million US dollars. The remaining agreement lock-up is not high, and the follow-up development needs further observation.
Why did the avalanche dominate the narrative last week?
This question was raised by Psyops Capital CEO tuba@0xtuba, and I believe this is also the question of most people.
From the perspective of the founders, Xue Beng does not have a leader who has money and can do things like SBF. SBF brought Solana’s success to life. Although Solana does not support EVM and is not friendly to the Ethereum ecosystem, this does not seem to be a big problem now. Funds are still pouring into solan, and there are currently more than 5 TVL projects with more than 100 million U.S. dollars.
Xue Beng is more academic. The paper was published as early as 2015, but the project did not go online until September 2020. This pace can be said to be quite slow. And the avalanche chain is very strange, divided into 3 chains, it seems awkward for ordinary users to use.
For the development of a technology, if it wants to successfully open the market, it often requires the cooperation of the right time, the right place and the people.
The answer given by Larry Cermak, research director of The block is:
- Three Arrows Capital, a16z and Polychain purchased AVAX for $14
- Announcement of Large Ecosystem Fund (US$180 million)
- The synergistic influence of trader Hsaka and Su Zhu, founder of Three Arrows Capital
- The new cross-chain bridge is really smooth
- Value depressions of low market value public chains
- Cool projects in preparation
- meme factor
In addition, the BSC that broke out in February and the Polygon (MATIC) that broke out in May stimulated people to look for the next BSC and Polygon, and the avalanche carried this narrative.
However, comparing BNB, MATIC and AVAX, the ratio of the full circulating market value/on-chain TVL of the former two is around 3-4, while AVAX’s is close to 17. Avalanche’s current full market value (32.8 billion U.S. dollars) has exceeded MATIC (14.4 billion U.S. dollars), and Avalanche’s locked-up capital (1.94 billion U.S. dollars) is not as good as MATIC (4.8 billion U.S. dollars). From a comparative valuation perspective, Avalanche seems to be overestimated. If the subsequent US$180 million stimulus plan cannot attract liquidity as soon as possible, risks need to be prevented in time.
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