![]() Below is a non-exhaustive glimpse of our future expansion plans: When choosing which assets to incorporate in Swim’s liquidity pools, we will initially focus on stablecoin swaps, but we are looking to expand to non-stablecoin swaps and eventually to any native to native asset pairs. Hence, native tokens will account for smaller volume due to the lack of usability in other ecosystems. ![]() This makes sense because different ecosystems have their own native tokens: Avax on Avalanche, Matic on Polygon, and so on. Looking at bridge volume over the past four months, stablecoins (including DAI) accounted for around 64% of all bridge volumes. This is reflected in the distribution of capital transferred via bridges. Tokens are traded against stablecoins much more often than they are against other cryptocurrencies. Stablecoins are the backbone of the crypto ecosystem. Methodology: Stablecoin creation/redemption hot wallet analysis on Binance Smart Chain via Dune Analytics, on Solana via TheGraph Looking at the graph below, we can see that the centralized exchange volume outweighs Wormhole’s volume. Another solution is via Wormhole, which is a multi-route bridge that produces wormhole wrapped tokens. Users deposit their ERC20 or BEP20 tokens on centralized exchanges and then withdraw the SPL equivalent into the Solana ecosystem. On Solana, the most popular bridging occurs via centralized exchanges. Per the graph below, we estimate that there is around ~$500 million in daily bridge volume. Methodology: Bridge contract wallet Ethereum address analysis via Dune Analyticsīinance Smart Chain bridge started out as an ecosystem sponsored single-route bridge that connects Binance Smart Chain with other ecosystems but has since evolved into a multi-route bridge. Amongst the top five most popular Defi bridges - Fantom, Arbitrum, Polygon, Optimism, and Avalanche - there is, on average, a slow stream of capital moving out of Ethereum along with days of massive outflows, most likely due to a new protocol or yield farming opportunity at the destination chain. The above graph shows TVL across the top bridges over the last 6 monthsĬomparing capital inflow and outflow for the past few months provides interesting insights about the ecosystem. The downside of this design is that they often lack the support and usability of the wrapped token at the destination chain. The common design for multi-route bridges includes a wrapped token at the destination chain. Recently, multi-route bridges have become more popular. Alternatively, in a future where other chains are likely to displace Ethereum’s current dominance, it’s likely that users will not want to route through Ethereum. However, users are required to pay high Ethereum gas fees when using bridges with the Ethereum network as the starting point. Examples include Polygon’s Plasma Bridge and Avalanche Bridge. These bridges are often quick to develop because they don’t need to consider scalability and interoperability with other blockchains, and the design choice of these bridges makes sense given that Ethereum has the highest TVL. They are often developed and maintained by the destination chain’s protocol and most of them share Ethereum as the common starting point. Single-route bridges refer to bridges that connect two blockchains. The development of these individual ecosystems showcased their own unique strengths - faster throughput, enhanced security, cheaper transactions, and more - while also demonstrating the need for cohesion and interoperability in the great Defi ecosystem. Most recently, we’ve seen the rise of L1s such as Solana and Avalanche. After the emergence of Binance Smart Chain in early 2021, attention shifted to various L2s. Defi started in 2020 and began adapting to a more multi-chain world after months of being Ethereum-centric.
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