Let's continue the series with a closer look at the next sub-sector, decentralised lending
301030, Decentralised Lending
Definition: Protocols offering lending and borrowing services, often using collateralised assets in liquidity pools.
It is worth noting that nearly every protocol in this category is pursuing a broader mission than the core lending/borrowing operations enable, thus making stronger arguments for creating a broader 3010 Sectoral overview for projects which are active in multiple DeFi verticals, but not strictly focused on one.
The combined sub-sector Market Cap stands at $8,508m as of 27/12/2024, up c. 119% from $3,890m as of 01/01/2024, compared to c. 101% growth in the total crypto Market Cap over the course of 2024. Notably, nine of the tokens included below have not been trading in January 2024, with three of them only on the market for a few weeks, so their base values are the most recent ones available. Without $AAVE and its $3b+ value creation, the sub-sector would've only seen c. 50% growth YTD.
Below is the proposed composition of the 301030 sub-sector, from largest to smallest by market cap, having reviewed 350+ projects throughout the past few weeks from both the context-of-use and exchange accessibility perspectives:
$AAVE
A leading decentralised lending protocol by TVL, providing lending and borrowing services through liquidity pools. Clear definition of the sub-sector with c. 60% dominance over it
Market Cap: $5,068m
YTD: +216%
$COMP
One of the pioneering protocols in decentralised lending with somewhat decreased developer activity
Market Cap: $703m
YTD: +79%
$MORPHO
Optimises yields on lending protocols, enhancing efficiency in broader decentralised lending space
Market Cap: $455m
YTD: +300% (from 26/11/24)
$JST
Provides decentralised lending and stablecoin issuance on the Tron network
Market Cap: $379m
YTD: +34%
$KMNO
Solana's leading lending-focused protocol with an intent-based exchange platform
Market Cap: $221m
YTD: +177% (from 03/05/24)
$LQTY
Offers interest-free borrowing using ETH as collateral, also a $BOLD stablecoin issuer
Market Cap: $206m
YTD: +47%
$WELL
A leading lending protocol on Base
Market Cap: $192m
YTD: +1,747%
$XVS
A leading multi-chain protocol to borrow, lend and earn
Market Cap: $154m
YTD: -14%
$GFI
A credit protocol with a focus on interoperability
Market Cap: $137m
YTD: +72%
$GEAR
A permissionless credit layer for DeFi with up to 10x leverage
Market Cap: $127m
YTD: +393%
$TRU
Facilitates uncollateralised loans in the DeFi space
Market Cap: $111m
YTD: +74%
$SYRUP
Focuses on decentralised lending with RWA elements, $MPL for institutionals, $SYRUP otherwise
Market Cap: $92m
YTD: +40% (from 17/11/24)
$SEND
Sui's DeFi suite, with a focus on lending, liquid staking and an AMM
Market Cap: $90m
YTD: -32% (from 12/12/24)
$QI
Lending and liquid staking protocol on Avalanche
Market Cap: $86m
YTD: +5%
$SLND
Solana's DeFi suite, 1/1 migration from to $SAVE ongoing. The same team that's behind Suilend
Market Cap: $69m
YTD: -36%
$EUL
Lending and borrowing protocol with a focus on capital efficiency
Market Cap: $68m
YTD: -8%
$MPL
Focuses on decentralised lending with RWA elements, $MPL for institutionals, $SYRUP otherwise
Market Cap: $68m
YTD: -51%
$ALCX
Enables self-repaying loans, a novel approach in decentralised lending
Market Cap: $46m
YTD: -31%
$STRIKE
A DeFi money market on Ethereum
Market Cap: $44m
YTD: -30%
$NAVX
A protocol on Sui focused on lending and liquid staking
Market Cap: $42m
YTD: +257% (from 23/03/24)
$UFT
A permissionless lending and borrowing protocol, pivoting into AI agents
Market Cap: $32m
YTD: +37%
$INV
A fixed-rate lending protocol, which manages its own stablecoin
Market Cap: $29m
YTD: +62%
$SEAM
A lending and borrowing protocol on Base
Market Cap: $29m
YTD: -50% (from 18/04/24)
$ALPACA
BNB Chain-focused leveraged lending protocol
Market Cap: $25m
YTD: -10%
$SCA
Sui-focused money market, offering a suite of DeFi features
Market Cap: $20m
YTD: -22% (from 30/04/24)
$NSTR
Focuses on lending and margin trading on Starknet and now Base
Market Cap: $9m
YTD: +0% (from 22/06/24)
$ZERO
The leading lending market on L2s, such as Linea, zkSync and others
Market Cap: $6m
YTD: -57%
Let us also explore what the composition of the sub-sector looks like as of today as we prepare for a longer-form analysis of the 2024 performance for this and the other DeFi sub-sectors in search of fundamental indicators of outperformance and underperformance alike.
There have been notable changes and movements since the start of this year, particularly for newcomers $MORPHO, $KAMINO and $WELL. $AAVE now comfortably maintains and extends its dominance over the sub-sector to arguably outgrow it all, on the back of the Aave v4 protocol overhaul. Curious drop in value for $SEND and $SLND, coming from the same team, as well as $ZERO, and a surprisingly underwhelming year for most others who have been around and trading since at least early 2023.
We will explore various possible reasons for such outcomes in the 2024 DeFi Report. Now, onto the next sub-sector classification – 301040 Stablecoin Issuers, at times closely related to this one, particularly through the example of the Sky Ecosystem and their $SKY governance token (ex-MKR), Spark lending protocol and $USDS stablecoin (ex-DAI).
Sources:
Making fundamental crypto analysis great again.
Let's continue the series with a closer look at the next sub-sector, decentralised lending
301030, Decentralised Lending
Definition: Protocols offering lending and borrowing services, often using collateralised assets in liquidity pools.
It is worth noting that nearly every protocol in this category is pursuing a broader mission than the core lending/borrowing operations enable, thus making stronger arguments for creating a broader 3010 Sectoral overview for projects which are active in multiple DeFi verticals, but not strictly focused on one.
The combined sub-sector Market Cap stands at $8,508m as of 27/12/2024, up c. 119% from $3,890m as of 01/01/2024, compared to c. 101% growth in the total crypto Market Cap over the course of 2024. Notably, nine of the tokens included below have not been trading in January 2024, with three of them only on the market for a few weeks, so their base values are the most recent ones available. Without $AAVE and its $3b+ value creation, the sub-sector would've only seen c. 50% growth YTD.
Below is the proposed composition of the 301030 sub-sector, from largest to smallest by market cap, having reviewed 350+ projects throughout the past few weeks from both the context-of-use and exchange accessibility perspectives:
$AAVE
A leading decentralised lending protocol by TVL, providing lending and borrowing services through liquidity pools. Clear definition of the sub-sector with c. 60% dominance over it
Market Cap: $5,068m
YTD: +216%
$COMP
One of the pioneering protocols in decentralised lending with somewhat decreased developer activity
Market Cap: $703m
YTD: +79%
$MORPHO
Optimises yields on lending protocols, enhancing efficiency in broader decentralised lending space
Market Cap: $455m
YTD: +300% (from 26/11/24)
$JST
Provides decentralised lending and stablecoin issuance on the Tron network
Market Cap: $379m
YTD: +34%
$KMNO
Solana's leading lending-focused protocol with an intent-based exchange platform
Market Cap: $221m
YTD: +177% (from 03/05/24)
$LQTY
Offers interest-free borrowing using ETH as collateral, also a $BOLD stablecoin issuer
Market Cap: $206m
YTD: +47%
$WELL
A leading lending protocol on Base
Market Cap: $192m
YTD: +1,747%
$XVS
A leading multi-chain protocol to borrow, lend and earn
Market Cap: $154m
YTD: -14%
$GFI
A credit protocol with a focus on interoperability
Market Cap: $137m
YTD: +72%
$GEAR
A permissionless credit layer for DeFi with up to 10x leverage
Market Cap: $127m
YTD: +393%
$TRU
Facilitates uncollateralised loans in the DeFi space
Market Cap: $111m
YTD: +74%
$SYRUP
Focuses on decentralised lending with RWA elements, $MPL for institutionals, $SYRUP otherwise
Market Cap: $92m
YTD: +40% (from 17/11/24)
$SEND
Sui's DeFi suite, with a focus on lending, liquid staking and an AMM
Market Cap: $90m
YTD: -32% (from 12/12/24)
$QI
Lending and liquid staking protocol on Avalanche
Market Cap: $86m
YTD: +5%
$SLND
Solana's DeFi suite, 1/1 migration from to $SAVE ongoing. The same team that's behind Suilend
Market Cap: $69m
YTD: -36%
$EUL
Lending and borrowing protocol with a focus on capital efficiency
Market Cap: $68m
YTD: -8%
$MPL
Focuses on decentralised lending with RWA elements, $MPL for institutionals, $SYRUP otherwise
Market Cap: $68m
YTD: -51%
$ALCX
Enables self-repaying loans, a novel approach in decentralised lending
Market Cap: $46m
YTD: -31%
$STRIKE
A DeFi money market on Ethereum
Market Cap: $44m
YTD: -30%
$NAVX
A protocol on Sui focused on lending and liquid staking
Market Cap: $42m
YTD: +257% (from 23/03/24)
$UFT
A permissionless lending and borrowing protocol, pivoting into AI agents
Market Cap: $32m
YTD: +37%
$INV
A fixed-rate lending protocol, which manages its own stablecoin
Market Cap: $29m
YTD: +62%
$SEAM
A lending and borrowing protocol on Base
Market Cap: $29m
YTD: -50% (from 18/04/24)
$ALPACA
BNB Chain-focused leveraged lending protocol
Market Cap: $25m
YTD: -10%
$SCA
Sui-focused money market, offering a suite of DeFi features
Market Cap: $20m
YTD: -22% (from 30/04/24)
$NSTR
Focuses on lending and margin trading on Starknet and now Base
Market Cap: $9m
YTD: +0% (from 22/06/24)
$ZERO
The leading lending market on L2s, such as Linea, zkSync and others
Market Cap: $6m
YTD: -57%
Let us also explore what the composition of the sub-sector looks like as of today as we prepare for a longer-form analysis of the 2024 performance for this and the other DeFi sub-sectors in search of fundamental indicators of outperformance and underperformance alike.
There have been notable changes and movements since the start of this year, particularly for newcomers $MORPHO, $KAMINO and $WELL. $AAVE now comfortably maintains and extends its dominance over the sub-sector to arguably outgrow it all, on the back of the Aave v4 protocol overhaul. Curious drop in value for $SEND and $SLND, coming from the same team, as well as $ZERO, and a surprisingly underwhelming year for most others who have been around and trading since at least early 2023.
We will explore various possible reasons for such outcomes in the 2024 DeFi Report. Now, onto the next sub-sector classification – 301040 Stablecoin Issuers, at times closely related to this one, particularly through the example of the Sky Ecosystem and their $SKY governance token (ex-MKR), Spark lending protocol and $USDS stablecoin (ex-DAI).
Sources:
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