DeFi Season 2 Review | Polygon, BSC Shine, Ethereum Remains Top Public Chain

In the closing of the second quarter of the cryptocurrency market, there was a sharp decline in coin prices. However, the competition among major public chains remains fierce. PancakeSwap has driven the success of Binance Smart Chain (BSC), and Binance is also trying to exert influence in the NFT field. Polygon is undoubtedly the biggest highlight of Q2.

Content summary is from DappRadar's "2021 Q2 Dapp Industry Report".

The Rise of Polygon

TVL Surpasses $8 Billion in Q2

Key milestones achieved by Polygon in Q2 include:

• Daily active addresses surpassing 73,000 on Ethereum
• Daily active addresses growing by 13,000% from last year and 845% from Q2
• Aave's TVL on Polygon reaching $2.11 billion
• Accounting for 20.4% of Sushi's total TVL

Polygon Facilitating a Multi-Chain Ecosystem

Mainstream protocols such as 0x, Kyber, and Curve have announced integration with Polygon. Not only have various DeFi projects migrated to Polygon from Ethereum, but Binance Smart Chain's Apeswap, Autofarm, and Beefy have also chosen to deploy on Polygon, indirectly integrating DeFi projects from different chains.

Bad Debts and Rug Pulls, BSC Still Outstanding

Despite a significant bad debt incident with Venus on Binance Smart Chain earlier this year resulting in a $100 million loss, the total TVL on the chain has reached $26.2 billion. The following protocols have made significant contributions:

• Autofarm
• Pancake Bunny
• BakerySwap
• ApeSwap

The article attributes BSC's success to PancakeSwap, which attracted over 2.13 million unique active users in just June, solidifying its position on BSC and successfully attracting other protocols to migrate to or deploy on BSC.

Although BSC's TVL is not high, its ability to attract a wide range of users is noteworthy. It should avoid mistakes such as the Venus liquidation or the Garuda vulnerability to maintain a healthy ecosystem.

Ethereum Still the Top Public Chain

Ethereum TVL Accounts for Over 60%

Ethereum developers are busy preparing for the "London Hard Fork." While attention is focused on Polygon and BSC's performance, DappRadar points out that in terms of TVL, Ethereum remains the top blockchain, with a locked value exceeding $53 billion.

As of the end of June, Ethereum's TVL share remains above 60%, with the following protocols accounting for 62%:

• Uniswap
• Aave
• Curve
• MakerDAO
• Compound

The Next Steps for Ethereum

Ethereum's London Hard Fork includes significant proposals like EIP-1559, which will significantly change the fee calculation method. The impact on Ether's price may be second only to the transition to the Proof of Stake mechanism.

However, with major updates approaching and the cryptocurrency market downturn, gas fees are at annual lows.

Once the three major testnets, Ropsten, Goerli, and Rinkeby, are successfully launched, the London Hard Fork will take place in the third quarter. DappRadar believes that with Ether possibly moving towards a deflationary mechanism, the scarcity of assets may push up asset prices.

NFTs Will Continue to Thrive

NFTs seem to be cooling off gradually. Reports show that NFT trading volume peaked in early May, but in the first week of June, it plummeted by 98% compared to the peak period. Google Trends also indicate a more significant decline in search volume for NFTs compared to DeFi.

• Flow: User and transaction volume decreased by 16.62% and 66.87% respectively from the previous quarter
• CryptoPunks: Q2 collectible transaction value was $95 million, dropping to $16 million in June

However, DappRadar points out that certain deeper data indicates that NFTs will continue to thrive, including:

• 151.89% growth in daily active addresses
• 111.46% growth in active address transaction volume from Q2
• Mobox had 22,600 unique wallets in June alone, with a total transaction volume exceeding $57 million

Axie Infinity

The rise of Axie Infinity has also garnered attention:

• Trading volume of $8,410, a 769% increase from Q1
• Over 4,700 daily unique users, a 360.61% increase from Q1
• June trading volume of $108.5 million, a 314.07% increase from Q1

Additional: Delphi Digital In-depth Report: Axie Infinity Player Surge, Key Reasons for This

Binance Attempts to Replicate BSC's Success in the NFT Space

Binance NFT Marketplace launched on 6/24, aiming to incentivize creators and traders with low fees and loyalty rewards. The first round of Premium NFTs includes:

• Singer Lewis Capaldi, winner of two BRIT Awards
• Visual artist Trevor Jones, known for works like Bitcoin Angel
• eSports team eStarPro
• Top professional football stars Michael Owen and Alphonso Davies

DappRadar believes that in terms of trading volume and users, Binance is still a distance away from top NFT markets like Ethereum, WAX, and FLOW, but it is definitely worth keeping an eye on.

DappRadar concludes that DeFi and NFTs are thriving, with BSC and Polygon making significant progress this year. The upcoming months will be crucial for Ethereum, and the impact of the London Hard Fork on the DeFi ecosystem is worth monitoring.