The DeFi market continues to exhibit growing demand for crypto-native assets, with Layer 2 ecosystems thriving despite user attrition and declining Ethereum L1 activity.
Executive Summary
Over 50 days into 2024, we've witnessed:
- Record-breaking market capitalization for tokenized real-world assets (RWAs)
- Two-year highs in DeFi participation across major Layer 1 and Layer 2 networks
- Sustained vitality in Ethereum's Layer 2 ecosystem
This report highlights key industry trends through the lens of on-chain data analytics.
Key Insights
1. RWAs: Milestones and Shifting Dynamics
- February 2, 2024: RWA token market cap peaked at $2.774B
February 8, 2024: Tokenized financial assets (treasury bonds, private credit, real estate) reached $1.614B
- Treasury bonds currently comprise 58.1% of financial RWAs (110bps below historic high)
Notable Trends:
👉 Crypto-native assets are gaining market share in core DeFi sectors, evidenced by:
- Declining RWA collateralization in DAI since October 2023
- Higher yield curves for crypto-backed loans versus RWAs
- Stablecoin APYs outpacing 3-month T-bill yields since November 2023
2. DeFi User Adoption and Retention
- February 1, 2024: 576,000 daily active DeFi addresses (7-day SMA) across top chains
Chain Breakdown:
- Solana: 196,000 daily addresses (peaked at 330,000 post-Jupiter airdrop)
- Ethereum: 24% YoY decline (120,000 → 91,000 addresses)
User Behavior Patterns:
- 60% of new DeFi entrants since September 2023 began with DEXs
- NFT platforms increasingly serving as DeFi onboarding channels
- Post-airdrop retention declines observed in January 2024
3. Ethereum's Layer 2 Renaissance
Ecosystem Metrics:
- 1.2M+ combined daily active addresses (L1 + major L2s)
- 3.14M average daily transactions across L2s
- $1.5M daily revenue generated by top L2s (7-day SMA)
- $21.6M paid to Ethereum L1 for data costs (30-day period)
👉 Key Takeaway: While Ethereum L1 activity has plateaued, its L2 ecosystem demonstrates unprecedented growth in:
- User adoption
- Transaction volume
- Revenue generation
Signals and Implications
- Persistent Demand: Crypto-native assets continue displacing RWAs in DeFi applications
- User Dynamics: Strong DeFi inflows continue despite concluding airdrop campaigns
- Ecosystem Health: Ethereum's L2 networks compensate for L1 stagnation with record activity
FAQ Section
Q1: Why are crypto-native assets outperforming RWAs in DeFi?
A: Higher yields, greater composability, and native blockchain utility make them more attractive for decentralized applications.
Q2: What's driving Layer 2 adoption?
A: Lower fees, faster transactions, and Ethereum's security guarantees create an optimal user experience balance.
Q3: How sustainable are current DeFi growth metrics?
A: While short-term airdrop effects are fading, fundamental infrastructure improvements suggest long-term viability.
Q4: Which sectors show the most promising growth?
A: DEXs remain primary entry points, while NFT-Fi bridges demonstrate innovative cross-sector potential.
Q5: What challenges does the RWA sector face?
A: Regulatory uncertainty and operational friction hinder seamless integration with DeFi protocols.