Ethereum and Solana lead DeFi surge as TVL and DEX activity soar

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The DeFi sec­tor has expe­ri­enced a sig­nif­i­cant increase in both activ­i­ty and token prices, pri­mar­i­ly dri­ven by Bitcoin’s Octo­ber ral­ly. Cen­tral to under­stand­ing this land­scape is the con­cept of Total Val­ue Locked (TVL) and decen­tral­ized exchange (DEX) vol­umes, two crit­i­cal met­rics that offer insights into the health and tra­jec­to­ry of DeFi protocols.

TVL, the aggre­gate val­ue of assets deposit­ed in DeFi pro­to­cols, serves as a barom­e­ter for sec­tor health and investor sen­ti­ment. Cryp­toSlate analy­sis found an inter­est­ing growth pat­tern across var­i­ous chains. Ethereum, the fron­trun­ner with $25.336 bil­lion in TVL, has seen a 31.14% increase over the past month, cement­ing its dom­i­nant posi­tion in the DeFi space. Solana, though low­er in over­all TVL, showed the high­est growth rate at 89.31%. Notably, all chains record­ed pos­i­tive growth over the month, indi­cat­ing a robust expan­sion across the sector.

The num­ber of active users on these chains offers addi­tion­al insights. Despite its low­er TVL, Tron boasts a sig­nif­i­cant­ly larg­er active user base of 1.69 mil­lion, which could result from a more retail-ori­ent­ed user land­scape. Con­verse­ly, Ethereum’s low­er active user count than its TVL might indi­cate a high­er engage­ment of insti­tu­tion­al or sophis­ti­cat­ed, high-net-worth investors.

The mar­ket cap to TVL ratio is anoth­er crit­i­cal met­ric, shed­ding light on the market’s per­cep­tion of a chain’s val­ue. Ethereum’s ratio of 9.72 sug­gests a mature mar­ket. In con­trast, Solana’s high­er ratio of 43.49 indi­cates either poten­tial growth oppor­tu­ni­ties or an under­val­ued ecosys­tem, war­rant­i­ng clos­er investor scrutiny.

Name Pro­to­cols

Active Users

1D Change 7D Change 1M Change TVL Sta­ble­coins 24h Vol­ume 24h Fees Mar­ket Cap to TVL ratio
1.Ethereum 946 304,493 -0.12% +6.50% +31.14% $25.473b $64.929b $1.718b $7.27m 9.63
2.Tron 26 1.69m -1.34% +5.04% +25.14% $8.291b $47.455b $11.33m $1.66m 1.13
3. BSC 663 945,060 +0.22% +1.70% +12.58% $2.996b $4.992b $429.32m $348,294 12.62
4.Arbitrum 481 133,870 -0.38% +10.90% +25.21% $2.095b $1.844b $925.94m 0.66
5.Polygon 488 +1.28% +8.10% +21.93% $852.6m $1.17b $369m $87,858 10.06
6.Optimism 197 91,508 -0.12% +11.94% +25.87% $739.39m $576.85m $109.27m 2.11
7.Avalanche 344 33,880 -1.04% +12.63% +28.18% $615.82m $1.07b $140.2m $36,244 9.73
8.Solana 115 -1.55% +23.58% +89.31% $530.8m $1.513b $425.62m $108,773 42.62

Table show­ing the TVL, active users, vol­ume, and mar­ket cap to TVL ratio for the 8 largest L1 chains on Nov. 14, 2023 (Source: DeFi Lla­ma)

DEX vol­umes pro­vide a lens into the trad­ing activ­i­ty with­in these ecosys­tems. Ethereum leads with a 24-hour vol­ume of $1.718 bil­lion, account­ing for a sub­stan­tial por­tion of the total mar­ket. The rapid growth in DEX vol­umes on plat­forms like Solana and Poly­gon, with increas­es of 81.35% and 86.32%, respec­tive­ly, reflects grow­ing user adop­tion and confidence.

defi dex volume by chain solana ethereum polygon
Chart show­ing the trad­ing vol­ume on decen­tral­ized exchanges (DEXs) across var­i­ous L1 chains from Oct. 1 to Nov. 14, 2023 (Source: DeFi Lla­ma)
Name Week­ly change Vol­ume (24h) Vol­ume (7d) TVL % of total Cumu­la­tive volume
1. Ethereum +27.29% $1.718b $10.65b 5.941b 37.12% $1.888t
2. Arbi­trum +58.15% $925.94m $4.415b 1.127b 20.00% $138.902b
3. BSC +7.54% $429.32m $2.752b 1.577b 9.27% $757.4b
4. Solana +81.35% $425.62m $2.571b 185.78m 9.19% $54.616b
5. Poly­gon +86.32% $369m $1.711b 0 7.97% $101.421b

Table show­ing trad­ing vol­umes and total val­ue locked for decen­tral­ized exchanges (DEXs) across the five largest L1 chains on Nov. 14, 2023 (Source: DeFi Lla­ma)

The observed trends in TVL, active users, and DEX vol­umes show a mar­ket boom­ing with activ­i­ty. Ethereum con­tin­ues to lead, both in terms of TVL and DEX vol­ume, sig­nal­ing strong investor con­fi­dence and mar­ket dominance.

How­ev­er, the rapid growth of new­er plat­forms like Solana and Poly­gon sug­gests a diver­si­fy­ing land­scape, with dif­fer­ent chains cater­ing to var­ied user needs and invest­ment pro­files. The mar­ket cap to TVL ratios fur­ther con­firms the growth poten­tial of low­er mar­ket cap chains, with Solana and Poly­gon posi­tion­ing them­selves for future growth.

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