Has Bitcoin DeFi project Sovryn truly overcome Uniswap v3 by TVL, as Pomp claims?

Analysts are debating whether the Sovryn Bitcoin money market, which is based in RSK, has a TVL of $52 million... or $2 billion.

Has Bitcoin DeFi project Sovryn truly overcome Uniswap v3 by TVL, as Pomp claims?

Sovryn, a BTC money market protocol built on RSK, a Bitcoin-based smart contract platform, seems to be rocketing up the decentralized finance rankings recently.

On June 9, Bitcoin commentator Anthony Pompliano shared data from DeFi Llama, a decentralized finance data aggregator, with his one million followers, indicating that the protocol had amassed a total value locked (TVL) of $1.95 billion, placing it 14th in the sector and surpassing DeFi darling Uniswap v3.

Pomp and many of his fans are upset that Ethereum-focused portals like DeFi Pulse don't mention Bitcoin DeFi projects like Sovryn and Stacks, claiming:

“One would be in the top 15 in the TVL rankings, while the other would be in the top 25. “How come they aren't included?”

Proponents of the Ethereum ecosystem have criticized Pomp's post regarding Sovryn, claiming that Sovryn has amassed a ten-figure TVL. Staked governance tokens, according to “ChainLinkGod,” may have contributed to an overstated TVL estimation.

DeFi Llama has updated its data for Sovryn since Pomp's original post, currently listing the project as having a TVL of just $52 million. The new information now corresponds to the TVL provided by Sovryn's own wiki.

DeFi Llama stated in a statement dated June 10 that its prior assessment of Sovryn's TVL of roughly $2 billion was based on the capitalization of staked assets. The data aggregator also stated that an update to its website will be released soon that would allow users to determine whether or not staked assets are included in TVL data.

TVL has become the key metric by which a protocol's success is judged since decentralized finance skyrocketed in popularity in 2020.

Many analysts, however, contend that TVL is reductionistic and should not be used as the sole metric for assessing the progress of a DeFi initiative.

CoinGecko co-founder Bobby Ong told Cointelegraph that, similar to how market capitalization has become the major measure of a token or coin's success, TVL has grown in popularity due to its simplicity, emphasizing the convenience of establishing "one figure to compare against other DeFi protocols."

“It's not the perfect measure [...],” he noted, “but it's the most simple measure for people to comprehend and use as a benchmark.”

Ong argues that overall trading volume should be the primary indicator used to evaluate decentralized exchanges (DEXs), as it “drives protocol revenue.” For the same reason, he maintained that the primary measure of money market protocols should be borrowing volume.

Ong also suggested that analysts focus more on combining TVL with other critical measures to show the capital efficiency of liquidity trapped in a protocol:

“Looking at Trading Volume / TVL for a DEX will give you an idea of how well the liquidity is being used to drive fees for the protocol and LPs.”

Also read: Is a rising CPI going to help Bitcoin? There are three reasons why Bitcoin's price has risen past $36K

Ong further claimed that dividing a project's TVL by its market value or fully diluted valuation (FDV) is a good way to compare DeFi protocols in the same market sector.

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