Mirror takes on Synthetix, Funding Depressed, Aave Dominates Lending
JUN 28, 2021 • 3 Min Read
Disclosure: Members of our team may own positions in assets mentioned in this report. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.
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Market Update
Markets opened strongly after testing range lows amidst weekend weakness, albeit with lower volumes. Hash rate exodus continues as the China mining & derivatives clampdown continues. ETH showing long awaited strength against BTC after weeks of weakness.
Mirror Eclipses Synthetix In Terms of Trades Per User
- Mirror protocol eclipses Synthetix as the top DeFi synthetic assets platform with more than 3,000 daily active users (DAUs) compared to 60-70 DAUs on Synthetix.
- User stickiness of Mirror Protocol is also astounding, each user does an average 4-5 trades per day, compared to only 1.2-1.3 on Synthetix.
But Average Volume Per User Is Much Higher On Synthetix
- On the surface, it looks like Mirror appeals more to cost-sensitive users, leveraging on the low fees that the Terra blockchain offers while Synthetix is the preferred synthetic assets exchange for whales.
- However, Synthetix’s design requires stakers to take on the other side of all trades. So when users stake SNX and mint sUSD against it, they have to constantly position themselves to mimic the debt pool to avoid increasing their debt relative to their synths held. Together, with the low user count and high volume per user, it’s clear that Synthetix is a whale dominated exchange with a few large traders who are also SNX whales.
BTC and ETH Funding Rates Are Depressed
- Sustained FUD, panic selling and market weakness has led BTC and ETH funding rates into unchartered territory (weeks of negative funding). This is possibly due to increased flight to safety and hedging demand from spot holders during this period of uncertainty.
- Our take on this is that even though market sentiment is weak at the moment, negative funding rates would not persist in the medium to long-term as we are still long-term structurally bullish BTC and ETH.
Aave Continues To Dominate Lending
- In the last 2 months, we’ve seen Aave taking significant market share at the expense of Compound.
- This is likely attributed to Aave’s liquidity mining program that was executed on the 27th of April, but could also be due to Aave’s higher LTV ratios for major assets compared to its peers.
Notable Tweets
Dune Analytics now supports Polygon.
1/2 ? @DuneAnalytics has integrated Polygon for rich data insights into the vibrant #DeFi, #NFT & #Gaming ecosystem!
? The launch of Dune will enable anyone to perform powerful analysis & showcase #Polygon data in beautiful dashboards for the community. pic.twitter.com/mXCT3cXdbN
— Polygon (@0xPolygon) June 28, 2021
NFTX launches v2.
The time has come: we’re launching NFTX V2! ??
Be aware this is a beta release. No aping necessary!https://t.co/0lJcBWrhF1
— NFTX ?? (@NFTX_) June 28, 2021
Community update thread on Alchemix
We are gearing up for a big week in Alchemix and are getting back on track to continue building the future of France.
Lots of updates, read below pic.twitter.com/wFdaykWghW
— Alchemix (@AlchemixFi) June 28, 2021
