DeFi

DeFi protocols like Lido generate more fees than Layer 1 blockchains

Published

6 months ago

15 July, 2024

Hedge fund MEV Capital is trying to make DeFi accessible to the masses

Posted on July 15, 2024 at 6:25 p.m. EST.

In what has become a growing trend, some decentralized protocols are now earn more in fees than their base layer networks.

According to Ethan Francis, head of protocol relations at Web3 infrastructure provider Particle Network, fees generated by DeFi projects will continue to grow over the next six to 12 months due to “chain abstraction,” in which end users transacting on-chain won’t know which chains they’re using. “We’re moving pretty quickly toward that future, especially on the user experience side, where users will eventually be able to access different protocols and applications in general from any chain,” Francis told Unchained in a conversation.

As a result, “over the next six years, [or] “In 12 months, these apps will have users from across the ecosystem… I expect that with this movement and the UX, the fees will be significantly higher.”

“Fee-based models are proving to be the champions of crypto revenue models,” Francis said, pointing to how DeFi protocols generate millions of dollars in fees on a weekly basis, sometimes more than commodity blockchains.

Here are the top five protocols in terms of fees generated over the past week, outside of Layer 1 blockchain networks:

1. Lido – $19.1 million

Lido, the leader liquid staking The provider is at the forefront of fee generation among crypto projects, surpassing even major layer-1 blockchain networks such as Bitcoin ($5.9 million), Ethereum ($16.2 million), Solana ($9.3 million), and Tron ($9.6 million), according to data from DefiLlama.

Lido is widely known for its flagship cryptocurrency, stETH, which allows holders to earn rewards by helping to secure Ethereum while keeping their illiquid ETH liquid. When someone decides to stake and contribute to the security of Ethereum, their ETH is locked in a smart contract and cannot be used elsewhere. However, Lido users can use their stETH for a variety of different financial actions, such as supplying liquidity pools or providing collateral on lending platforms.

According to Lido documentsThe protocol generates fees by charging 10% on staking rewards, with the money split between node operators and the DAO treasury. The treasury has an onchain wallet of $328 million per Etherscan.

2. Raydium – $18.0 million

Raydium, an automated market maker originating from Solana, charges a small trading fee ranging from 0.01% to 1% every time a DeFi user trades cryptocurrencies in a Raydium pool. These fees are split and then allocated to incentivize liquidity providers, fund RAY buybacks, and grow the protocol’s treasury, according to Raydium. documents.

With a 24-hour trading volume of over $29.5 million, Raydium is one of the most popular places on Solana to trade cryptocurrencies, especially memecoins. For example, memecoins inspired by Republican presidential candidate Donald Trump who survived an assassination attempt on Saturday are dominating the market. Top 10 Liquidity Pools by Fees Collected in the Last 24 HoursThese liquidity pools include SOL-FIGHT, SOL-EAR and SOL-DJT.

3. Uniswap – $9 million

Uniswap, the popular automated market maker on Ethereum, has since expanded to other networks such as Base, Arbitrum, and ZKsync. The fees paid by users go to liquidity providers, who are individuals or entities that deposit their crypto assets into Uniswap’s liquidity pools, allowing users to trade without the need for a traditional intermediary.

Uniswap documents Exchange documents state that all token swaps carry a 0.3% fee that is paid to liquidity providers. “The swap fee is immediately deposited into the liquidity pool. This increases the value of the liquidity tokens, functioning as a payment to all liquidity providers proportional to their share of the pool,” the exchange documents state.

Uniswap has taken governance steps to implement a protocol fee to reward UNI token holders who stake and delegate their tokens, but at press time, the fees go to liquidity providers.

Learn more: Uniswap Foundation Reveals Assets and Fund Usage Ahead of Fee Change Vote

4. AAVE – $6.3 million

AAVEThe leading lending platform with nearly $21 billion in liquidity locked across eight networks, according to its homepage, is also a leading protocol in terms of fees collected.

“Users pay fees every time they borrow, deposit, liquidate, or use flash loans. The Aave protocol splits the fees between the Aave DAO and those who support the protocol’s risk in the security module by staking the native token, AAVE,” wrote a Delphi Digital analyst in a Research report 2023.

5. PancakeSwap – $5.7 million

PancakeSwap, a protocol on BNB Chain similar to Raydium and Uniswap in that it is another place to trade cryptocurrencies, is also among the top fee-generating platforms.

According to CoinGecko, PancakeSwap V3 is the sixth-largest decentralized exchange by 24-hour trading volume, with a figure of $48.7 million. Those who provide liquidity to the platform are rewarded with transaction fees when people use PanscakeSwap’s pools to execute a trade.

“Every time someone trades on PancakeSwap, for every [swap] In each Exchange V3 liquidity pool, depending on the liquidity pool fee level, the trader pays a fee ranging from 0.01% to 1%,” according to the exchange documents State.

Honorable mentions: Jito and Maker

Solana, infrastructure heavyweight Jitoknown for its liquid staking services and stablecoin issuer MakerDAOwhich issues the DAI token, collected $5.23 million and $4.59 million in fees, respectively, over the past week.

Jito’s fees come from a variety of sourcesFor example, holders of Jito’s liquid staking token, JitoSOL, pay an annual management fee equal to 4% of total rewards that is applied to both staking rewards and MEV earnings. Jito has also implemented a withdrawal fee for users who withdraw directly through its front-end website to prevent “certain abuses in the protocol design,” according to Jito’s documents.

Jito DAO, comprised of JTO token holders, “has governance power over components of the Jito network such as Realms treasury management to allocate funds for community growth, protocol fee distributions, stake pool fees, and other features,” according to the protocol documents.

Along the same lines, MKR token holders have governance powers over MakerDAO, such as whether or not to change its “stability fee,” which is charged based on each user’s collateralized debt position.

Sage is a crypto journalist at Unchained. He owns AAVE and stETH, as well as some NFTs, gold, silver, BTC, ETH, LINK, PEOPLE, DOGE, PEPE, MOG, and BONK.

Fuente

Related Topics:Aave jito MakerDAO PancakeSwap Pool raydium Uniswap

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DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

Discover the exciting opportunities of the Rollblock (RBLK) presale today!

Website: https://presale.rollblock.io/

Social networks: https://linktr.ee/rollblockcasino

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DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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