ON–037: DeFi

This is issue #37 of the on-chain analytics newsletter that reaches nearly 5000 crypto investors every week 📈

This week our contributor analysts cover DeFi: Instadapp, Opyn, and Nexus Mutual.

• Active cover amount reached a new all-time high of $64M covered. yinsure.finance also launched as the first third-party distributor for Nexus cover. This allows for DeFi users to buy cover without KYC, as the yinsure distributor contract forwards all new cover purchases to be underwritten by Nexus. yinsure.finance also tokenizes the covers with NFTs so covers can be freely tradeable (Source).

• Cover capacity for Curve and yearn.finance are maxed out at $10.7M and $9.4M covered respectively. Aave, Balancer, Compound, and Synthetix are also close to having cover capacity maxed out. There are nine covers of more than $1M each, all of which were bought in the last two months (Source).

• Despite the massive growth in cover amount, only 0.64% of total value locked (TVL) in DeFi is currently being covered. There is still a big DeFi market available for Nexus to cover, notwithstanding expanding to other products like oracle failure covers and stacked risk covers (Source).

• The capital pool size for Nexus grew to a new all-time high of $88M (190k ETH). At the same time, the minimum capital requirement (MCR) reached the magic number of 100k ETH, meaning that the MCR now increments once a day rather than every four hours. This puts 6x less downward price pressure on the NXM token (Source).

• In the coming week, Nexus will launch #shieldmining, which allows for projects to reward their native tokens to NXM holders who stake on their contracts. This will greatly increase the staking rewards of NXM, which will open up more cover capacity and make cover premiums cheaper. This is especially useful to offer cover for new yield farming projects like SushiSwap and Yam Finance that would otherwise be too risky to stake on (Source).

• Opyn provides decentralized options for DeFi called oTokens. There is currently $1.3mm of collateral backing WETH, CRV, YFI put options, ETH call options, and options on DAI and USDC deposits in Compound (cDAI, cUSDC) and USDC deposits in Aave (aUSDC). (Source)

• Put and call options on ETH remain the most popular options with the 9/04 $400 WETH option seeing $507k in total notional volume and the 8/28 $400 ETH call option seeing $698k in total notional volume. (Source)

• With the advent of yield farming, there’s been excitement for put options on farmable tokens. The $3 9/25 CRV put option, which launched last week has seen $93k in total notional volume, and the $8500 9/18 YFI put option, which launched two weeks ago has seen $196k in total notional volume. (Source)

• In the last month the number of unique Ethereum addresses interacting with oTokens has grown to 1135 unique Ethereum addresses having bought or sold oTokens. (Source)

• With the launch of “DeFi Smart Accounts” by Instadapp that provides users tools to claim and maximize their earnings, like with the “Maximise COMP” feature to earn COMP. There has been an all-time-high of TVL assets, a whopping 548 % from $50M in late June to an all-time high of $324M in early August. (Source)

• Instadapp’s flashloan (InstaPool) has facilitated approximately $670M in flash loans for features like the Refinancing Tool, Leverage, and Debt Swap. Around $350M in flash loans was taken from previous editions to this date. (Source)

• Within the $670M of flash loan transactions, ~$491M DAI was utilized. On July 28th, a ~$33M DAI flash loan was used. This was the highest amount of DAI taken in a single day. (Source)

• The use of debt swap, collateral swap, and leverage as part of yield farming triggered approximately $214M in volume swap by Instadapp’s DSA. Major parts of this volume were swapped through Kyber, Curve, and 1inch. (Source)

• Finally, since the launch of the COMP tokens, around 17.5k COMP tokens have been farmed and claimed on the DSA platform by the users. However, there are even more COMP tokens accrued but not yet claimed. (Source)