In the space of a year, the decentralized finance (DeFi) landscape has changed a lot. After a meteoric rise last spring, Binance Smart Chain was recently overtaken by the Terra Ecosystem (LUNA) in terms of total locked value.
Ecosystems that upset the hierarchy
In January 2021, decentralized finance (DeFi) was mainly concentrated on a single blockchain: Ethereum (ETH) . Moreover, the ecosystem alone captured nearly 97% of the total blocked value (TVL) on-chain, or about $ 10.5 billion at the time.
In the space of a year, the DeFi landscape has completely changed . New blockchains have imposed themselves on users, at the expense of Ethereum. Faced with its exorbitant fees , users naturally turned to less expensive options, such as Binance Smart Chain (BSC) , Avalanche (AVAX), Solana (SOL) or even second layer solutions like Polygon (MATIC).
In this year 2021, it is probably the BSC that has experienced the greatest enthusiasm . Still very little used at the start of the year, the ecosystem quickly spread until it reached 20% of the total value blocked on-chain . That was $ 31 billion locked in , down from just $ 140 million as of Jan. 1.
Moreover, the PancakeSwap protocol has sometimes even surpassed Uniswap , its competitor on Ethereum, in terms of daily trade volumes. As for Binance’s token, BNB , it went from $ 43 to over $ 680 in the space of a few weeks.
Terra Ecosystem Outperforms Binance Smart Chain
As we expressed above, the DeFi landscape is changing at top speed. On December 20, 2021, Binance Smart Chain was overtaken by the Terra blockchain (LUNA) in terms of total value blocked on-chain.
According to data from the DeFi Llama analysis tool , the TVL in decentralized finance protocols on Terra recently crossed the $ 21 billion mark , compared to $ 17 billion for the BSC. This makes it the largest DeFi ecosystem after Ethereum.
Ranking of DeFi ecosystems by total blocked value (TVL) – Source: DeFi Llama
The explosion of the ecosystem has brought with it the emergence of certain protocols. Almost 43% (or over $ 9 billion) of the total value is stuck on Anchor , a yield-generating app based on stablecoins. In addition, TVL on TerraSwap , a decentralized exchange based on Terra, jumped 81% from last week to more than $ 2 billion.
That said, the Terra ecosystem is still young. Unlike the BSC and its 213 decentralized applications, Terra only supports 13 protocols at the time of this writing. So that’s more than $ 1.6 billion per protocol on average, compared to $ 73 million on the BSC.
LUNA prints new $ 101 ATH
As a Christmas present for its users, the LUNA, a native token of the Terra network, exceeded $ 100 on Friday, December 24. In a rally that began at the end of November , the LUNA printed a first all-time high (ATH) of around $ 78, before taking a slight breath.
After rebounding to $ 52, investors took advantage of the listing of Terra’s UST stablecoin on Binance to push LUNA to that new ATH of $ 100. A psychological resistance which seems to have slowed down the progress of the token, which is declining by a few dollars at the time of this writing.
Evolution of the LUNA price – Source: TradingView
This represents an increase of more than 163% of its price in the space of a month. This is not the only witness to the good health of the ecosystem, as Terra’s UST recently surpassed the DAI to become the 4th capitalization of stablecoins , to the tune of $ 9 billion. So many reasons that explain the meteoric increase in TVL on Terra protocols.
