DefiLlama: how to do cryptanalysis

DefiLlama is one of the most interesting tools for analyzing blockchain and cryptos in the decentralized finance sector.

Let’s take a closer look at how it works and what is the most important data to observe in the platform.

What is DefiLlama and why is it useful for cryptanalysis?

DefiLlama is a cryptocurrency and blockchain analysis tool that is particularly useful for finding data related to the world of decentralized finance, also known as DeFi.

Very often, when analyzing a token or a project in general, it is not enough to make assessments about price action or fundamentals to get a clear picture of the situation, while it is increasingly important to go deeper by looking for information related to chain statistics.

DefiLlama can be useful in this regard, as it has a large amount of verified blockchain data, such as DeFI’s TVL (total value locked), liquidations of lending platforms, trading volumes on decentralized markets, fees/revenues of dApps, settlement periods for cryptocurrency unlocked, hacks and exploitation of smart contracts and much more.

Initially, DefiLlama was conceived as an aggregator of TVL of decentralized chains and protocols, given the speed at which DeFi has expanded since 2020, gaining a respected place in the most sought-after sectors of the crypto market.

TVL is very important for analyzing DeFi because it gives us a measure of how much money is flowing within a decentralized platform or layer, and therefore tells us how ‘important’ that infrastructure is.”

The tool is capable of analyzing this data from 190 blockchains and around 2500 different protocols.

Currently, Ethereum holds a dominant position in the market, with 58.07% of all crypto assets locked in smart contracts, followed by Tron with 11.67%, BSC with 9.82% and Arbitrum with 5.07% .

Another very important metric to consider is the volumes recorded within blockchain protocols or infrastructure.

While TVL is a more general figure that shows the amount of money stationed in an on-chain environment, daily and weekly volumes provide more accurate details about the actual usage of these platforms.

It is possible to filter this figure by chains, individual protocols or option platforms.

Currently, Uniswap and Pancakeswap have the highest volumes in the last 24 hours and the last 7 days.

The top crypto protocols on DefiLlama

Now let’s try to determine, based on the data observed on DefiLlama, which cryptoprotocols are the most important in terms of liquidity within smart contracts, volume and fee/revenue ratio.

First, the most prominent project in the DeFI sector is Lido, a liquid staking platform, which is the protocol with the most TVL (USD 12 billion) with a dominance index over all other protocols of 25.51%.

It is followed by platforms such as MakerDAO and Aave, which have locked up $7.11 billion and $5.14 billion in value in their infrastructure, respectively.

Uniswap is the protocol that earns the most from fees paid by its users, with $2.8 million in fees collected in the last 24 hours and a cumulative value of $3 billion since its inception.

GMX, the flagship DEX of the Arbitrum ecosystem, has a TVL of $678 million, representing more than 24% of all capital flowing through the chain, and a volume in the last 24 hours of $49 million.

Other highly respected platforms that have made history in the DeFi world and are now the cornerstones of the industry are: Compound, Curve Finance, PancakeSwap, Convex, Balancer, Frax Finance, Yearn Finance.

On DefiLlama it is also possible to classify the protocols according to the blockchain they belong to and the area in which they compete.

In detail, for each chain we can find the best projects for Liquid Staking, stablecoin coin platforms with collateral loans, decentralized exchanges, bridge, lending, yield and service.

Other blockchain analytics platforms

DefiLlama is not the only tool the web offers to analyze crypto protocols.

Since most blockchains are public by nature, and therefore available to everyone, a large number of websites have emerged over time that allow users in the crypto world to identify data of all kinds, not just specific to the DeFi sector not.

Among the most useful tools to get a head start in the day-to-day analysis of projects and to facilitate the reading of on-chain movements are three tools in particular.

Debank is a tracking platform for Web3 addresses, especially useful for tracking funds in your own wallet, but also in those of other people whose address you know.

Through a very user-friendly graphical interface, you can check the balance of a wallet, the amount of assets held per blockchain, and a history of actions taken since its inception.

Dune Analytics, on the other hand, is a platform that enables the instant creation and sharing of analytics related to a specific query.

Smart contract data is collected and converted into a human-readable format that can be queried using the standard SQL language.

Much of the most interesting information can be found and grouped on Dune Analytics. The only thing to watch out for is when the information has been updated, as some dashboards may have been created in the past and abandoned by their creators over time.

Finally, an all-round analysis and insight tool for tokens, blockchain and decentralized protocols is Nansen.

Founded by Alex Svanevik, it is the most comprehensive and convenient data aggregator, with more than 250 statistics available and a variety of tokens and chains to which they are applied.

The likes of a16z, Tiger Global, Coinbase, Google, Pantera Capital and Jane Street have also invested in Nansen.

Nansen is suitable for all segments of the crypto community as it provides solutions for investors, venture capital, Blockchain and L2, Exchange, DeFi protocols and service providers.

The downside is that, unlike DeBank and Dune, this tool is not free: the basic plan costs $100 per month, while the VIP and Alpha plans, which offer access to professional data and highly researched market statistics, are $1000 and $2000, respectively food