Quick Links
The decentralized finance (DeFi) landscape is continually evolving, with key players emerging and dominating in terms of revenue and Total Value Locked (TVL). As of early 2024, platforms like Ethereum, Tron, Maker, Avalanche, and Lido Finance are at the forefront, showcasing significant growth and dominance in the DeFi sector. Let’s dive into the details of each platform and their contributions to the DeFi world.
Ethereum: $10.28 billion
Ethereum continues to reign supreme in the DeFi space. Its dominance is evident in its impressive revenue generation, surpassing the $10 billion mark cumulatively. In a recent, December 2023 alone, Ethereum amassed around $285.36 million in revenue. This not only speaks volumes about its popularity but also its efficiency in facilitating a wide range of DeFi applications.
The TVL on Ethereum stood at about $29.9 billion, affirming its significant role in the DeFi ecosystem. This large TVL underscores Ethereum’s continued influence and its ability to attract substantial capital inflows into its DeFi protocols.
Major revenue driving factors:
- Transaction Fees (Gas Fees): Ethereum generates a significant portion of its revenue from transaction fees paid by users to execute smart contracts and conduct transactions on the network.
- DeFi Platforms: Ethereum is a popular platform for DeFi applications, which include lending, borrowing, trading, and yield farming. These DeFi protocols generate revenue through fees, interest, and other financial activities conducted on the Ethereum blockchain.
- Staking and Validators: Ethereum 2.0, an upgrade to the Ethereum network, introduced staking, where users lock up a certain amount of ETH to become validators. Validators earn rewards for securing the network and processing transactions, which contributes to their revenue.
- Layer 2 Solutions: Layer 2 scaling solutions like Optimistic Rollups and zk-Rollups aim to reduce transaction fees and increase throughput on the Ethereum network, potentially increasing the number of transactions and revenue.
- Ecosystem Growth: As more decentralized applications (DApps) are built on Ethereum, they contribute to increased network activity and revenue generation. The success and adoption of these DApps can have a significant impact on Ethereum’s overall revenue.
Tron: $739.09 million
Tron has made remarkable strides in the DeFi sector. Particularly noteworthy is its lending protocol, JustLend, with a TVL of $6.69 billion. Tron, alongside Ethereum, accounted for a staggering 93% of all Layer 1 industry revenue in Q2 2023, driven primarily by their DeFi platforms’ trading volumes. Tron made $39.16 million in revenue in December 2023. All together, they’ve made $739 million.
Moreover, Tron’s overall DeFi TVL has exceeded $8.3 billion, overtaking Maker to become the second-largest decentralized finance network by TVL. This surge signifies Tron’s growing appeal and its successful expansion within the DeFi space.
Major revenue driving factors:
Transaction Fees (Gas Fees): TronDAO generates a significant portion of its revenue from transaction fees paid by users to conduct transactions on the network, mainly from USDT.
Maker: $254.3 million
Maker has been pivotal in the DeFi world since its inception. With a TVL of $6 billion, Maker offers a variety of financial services, including leverage, borrowing, and long-term yield strategies. Although it operates independently from MakerDAO, it still provides front-end access to the Maker protocol, maintaining a crucial link to its origins. In December 2023, Maker’s revenue was $15.4 million, and cumulatively, revenue is $254 million.
Major revenue driving factors:
Transaction Fees (Gas Fees): Maker generates a significant portion of its revenue from fees paid by users for borrowing DAI and fees earned in case of a liquidation of a borrowing position.
Avalanche: $64.93 million
Avalanche’s specific revenue figures in the DeFi space were $64 million. In December 2023, Avalanche’s revenue was $52.14 million. Its position in the market is noteworthy.
Major revenue driving factors:
Transaction Fees (Gas Fees): Avalanche has experienced a remarkable surge, with approximately a 2.5-fold increase in the number of active users, which has generated a massive jump in transaction fees.
Lido: $109.08 million
Lido Finance has emerged as a major player, particularly within the Ethereum ecosystem. It generated substantial cumulative revenue of $109 million, securing the fifth spot with approximately $7.29 million in December 2023 and about $33.95 million over 6 months. Lido’s contribution to the DeFi TVL is also remarkable, which was around $22 billion.
Major revenue driving factors:
Transaction Fees (Gas Fees): The platform generates revenue from fees from various activities, such as liquid staking services and other DeFi activities. A portion of these fees is distributed to LDO holders, providing a potential source of passive income.
Conclusion
In conclusion, as of early 2024, the DeFi landscape continues to be led by several prominent players, each contributing significantly to the growth and evolution of the decentralized finance space. Ethereum remains the undisputed leader in terms of both revenue and Total Value Locked (TVL), showcasing its efficiency and popularity in facilitating diverse DeFi applications.
Tron has made remarkable strides, particularly with its JustLend lending protocol, and has become the second-largest DeFi network by TVL. Maker, a pivotal player since its inception, continues to offer a wide range of financial services and maintains its relevance in the DeFi world. Avalanche, despite falling to the fourth position in terms of TVL, maintains a strong presence, while Lido Finance secures the fifth spot with its significant contribution to the Ethereum ecosystem. These platforms collectively highlight the dynamic and ever-evolving nature of the DeFi sector, with each one playing a vital role in shaping its future.
