DeFi Friday - How to Become a DeFi Data Wizard
Six tools to level up your DeFi game
👋 Welcome to the 51st issue of The Syllabus from Invisible College—a newsletter that helps you navigate the fast-moving world of web3. To get it delivered straight to your inbox, subscribe here:
Current State of DeFi
Total Value Locked (TVL) across all of DeFi: $47.05 Billion (-5.37%)
Chains with notable TVL growth past 7 days:
Arbitrum (+5.31%)
Canto (+1.98%)
Hedera (+1.84%)
Chains with notable TVL decline past 7 days:
Moonriver (-18.42%)
Aptos (-12.86%)
Tezos (-12.84%)
Fantom (-12.76%)
(Source DefiLlama.com)
Tools that will help you become a DeFi data wizard
In this edition, we’re going to share six different tools to help you find information about almost anything you could imagine in DeFi. The number of wallets that hold certain tokens, TVL, earned revenue, developer activity, etc. In a world where everything is on-chain, data has never been so accessible.
Throughout this article, what we’ll also try to do is make some callouts on useful charts or give tips/hacks on how to use different platforms. The fact that there is so much data and it’s so accessible also means that those who have the most success will be the ones who can separate signal from noise, ignore most of the vanity metrics, and find ways to surface insights that really matter. The true “DeFi Data Wizards” won’t necessarily be looking at the most data, dashboards, or trends, they’ll be looking at the right data.
Dune Analytics (link)
This is probably one of the most popular DeFi analytics tools out there. Dune allows you to create your own custom charts and dashboards using plain SQL. They also have great discovery and search capabilities so that you can see dashboards that others have created.
Here are a few of my favorite Dune dashboards that I check regularly:
With Dune analytics it’s always important to remember that you should vet these dashboards. Don’t just blindly accept the data you see as the ultimate truth.
DefiLlama (link)
We mention DefiLlama every week so we will skip the basics. Here are a few more advanced uses of DefiLlama that you could be looking at.
Their Stablecoin Flows table will give you a good sense of net stablecoins going into or out of different chains. Clicking on an individual chain will allow you to see a time series graph and a breakdown of which stablecoins are on the chain.
For example, look that the crazy amount of stablecoin inflow Canto has experienced since the start of 2023:
The Liquidations tab is also a page that not enough people know about. On this page, you can look at leveraged positions on most tokens and see the liquidation levels of those positions. Below is a screenshot of ETH across multiple protocols. What’s crazy is that you can even drill down to the individual vault/wallet address and see at what ETH price their position will get liquidated. This can be helpful for those who are more interested in trading to give a sense of how much liquidity could be forced into the market if the price of a token drops X%.
Finally, DefiLlama also maintains an incredibly robust API that you can pull really interesting data from. I’m just getting into playing around with this and haven’t even scratched the surface yet.
Here are a couple of charts I made in a Jupyter notebook:
The API also has access to detailed data for individual Uniswap V3 pools which I’ll be playing around with more in the future. Coin Data School is a great Twitter follow if you’re interested in learning more about the DefiLlama API. Everything I’ve learned so far has come from what I’ve seen them do.
Artemis (link)
My favorite use of Artemis is to quickly view different fundamental metrics about different chains and see how those metrics have changed over the past three, six, and nine months, especially in relation to other chains.
With Artemis, you can see daily active addresses, daily transactions, daily fees, # of commits, weekly active developers, etc.
It’s truly the single best resource I know to be able to look at all aspects of a chain and compare it to others.
Token Terminal (link)
This is another great resource to use if you want to find fundamental metrics on DeFi chains and protocols.
My favorite way to use Token Terminal is to quickly find protocols with increasing revenue.
Below is a screenshot from Token Terminal where you can see Protocol Revenue shorted by highest 30d % growth. Obviously, it may be good to filter out results that are below a certain threshold in the Revenue 24h column, but this serves as an incredibly quick way to generate a list of protocols to start doing some extra research on.
A word of caution with Token Terminal. They have a lot of charts and tables for P/S, P/E, and P/F ratios. These are incredibly interesting to look at and some would say that they could be a way to find “undervalued” chains or protocols. However, from personal experience, I would caution most people from investing solely based on these metrics. DeFi is still new, early, and hard to value. At some point, these metrics may become helpful and useful in valuing chains and DeFi protocol tokens, but we may be a little far from that.
Crypto Fees (link)
This website provides an incredibly easy way to see the fees that DeFi users are paying to use different chains and protocols.
There are a few different places you can gather the above information but what’s really useful with this tool is that you can drill down to the individual level and see more information about the change in fees over time.
You can also easily view protocols with different versions at the summed protocol level OR at the individual version level (i.e. UniSwap and Aave).
Coinalyze (link)
This tool is mainly used by traders but has some good data and charts on Open Interest and funding rates across centralized exchanges. If you’re an advanced enough DeFi farmer that you’re setting up delta-neutral positions by using funding rate arbitrage fixing Defi + CeFi rates, this tool is the best I’ve found to see current and historical funding rates of popular tokens at most of the largest CeFi platforms.
Conclusion
In closing, we want to make sure we hammer a few points home:
Never blindly trust one single data source. Things happen. APIs have bugs, queries become outdated, data streams pause, etc. If you see numbers that seem off, they may be. Be confident in the numbers you’re looking at before you take any action.
Things that make sense and are used as important metrics in traditional finance aren’t always the best indicators of successful projects in DeFi. Again, we’re still early. No one really knows how to value different chains or DeFi protocol tokens. Don’t just look at one metric and make a decision because XYX is “undervalued” according to the P/S ratio or because ABC has a ton of developer activity.
Teach yourself. If you have an idea for a metric or a dashboard of information that you want to see, try learning the skills required to surface that info. Teach yourself some SQL or python and start playing around with Dune analytics or making calls to the DefiLlama API. We could always use more people trying to unearth important and interesting metrics about the future of finance.
Finally, as we said at the beginning, the challenge in DeFi isn’t access to data - the nature of everything being on-chain makes data abundant. The challenge is finding meaningful data and then deciding what actions to take with that new insight.
Disclaimer: This is DeFi, everything is risky. Smart contract risk is real and you should do your own research before interacting with these protocols to determine if the risk matches your personal appetite. Finally, some of these protocols have their own token, and inclusion on this list doesn’t mean that we have an opinion on their token.
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