On-chain data analysis: Where do the revenues and funds of the Arbitrum ecosystem flow?

2023-03-15 18:59:59

Collection

Arbitrum's TVL has surged to $2 billion, setting a new record.

Author: defi_mochi

Compiled by: Odaily Planet Daily

The Arbitrum ecosystem is taking off, and data analyst @defi_mochi has analyzed all the data on Arbitrum from DefiLlama using Flipside (a highly customizable data development tool that offers significant freedom to display key economic indicators of specific chains to track their health and overall parameters).

In February, we saw two large deposits into Arbitrum, with a deposit balance exceeding $450 million. I suspect this was due to the listing of tokens on exchanges and a large influx of FOMO funds into the Arbitrum ecosystem.

Due to recent market impacts, although the overall funds entering Arbitrum have increased, bridging deposits have slightly decreased. It is evident from the chart below that bridging deposits have dropped from over $1 billion to below $200 million, a decline of over 80%.

However, during times of panic, both DEX and options trading volumes on Arbitrum have increased, and the rise in options trading volume has also led to increased activity on GMX. Additionally, due to arbitrage between USDC and USDT, the increase in DEX trading volume is significant. On March 11, both DEX and options trading volumes peaked, with both exceeding $800 million, showing a substantial increase compared to data from previous months.

This massive activity and bridging deposits have propelled Arbitrum's TVL to $2 billion, reaching an ATH. So where have these revenues and funds flowed?

According to DefiLlama data, GMX overwhelmingly occupies 70% of Arbitrum's fee market share, while Gains Network, launched in late December, has already captured 7% of the fees.

In addition to the fees collected by Arbitrum itself, the market share of the top 5 fee-collecting protocols is as follows:

GMX, a decentralized cryptocurrency derivatives and spot exchange created for large traders, accounts for 70.84% and is also the leading DEX derivative on Arbitrum.
Fees collected by Arbitrum itself account for 11.25%.
Gains Network, a decentralized perpetual contract trading platform offering cryptocurrency and forex trading options with leverage, accounts for 7.88%.
Hegic, an on-chain options platform providing WBTC and ETH options purchasing services, accounts for 3.5%.
MUX Protocol, a decentralized leveraged trading protocol offering zero slippage and up to 100x leverage, accounts for 1.31%.

Additionally, there are protocols like Solidlizard, Zyberswap, and Premia.

From the data, I can identify which protocols can participate deeply. Therefore, I created this table based on the monthly fee data of each protocol on Arbitrum, with monthly changes expressed as percentages. The most prominent protocols for me are:

Lyra, an options protocol integrated with GMX, which raised $3 million in funding from Framework Ventures and GSR. Last month, its fees increased by 276%.
ZyberSwap, a DEX combining Uniswap V2 and Curve, saw its fees increase by 556% last month, but its token experienced a death spiral to near zero at the end of January. Thanks to the revival of DeFi on Layer 2, it has shown significant momentum recently. However, it is important to note that while ZyberSwap's trading volume seems to be recovering, its TVL has remained stagnant so far. Most of the trading volume comes from their stable trading pairs USDT/DAI/USDC.
Arbitrum, with a fee increase of 114% last month.

From the weekly data analysis of these protocols, Lyra's performance is impressive, with a growth of nearly 76% in the past week. Additionally, projects like ZyberSwap have also shown significant growth momentum due to the impact of the USDC de-pegging event.