NFT Finance Digest #9: Storm?
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GM my frens! First of all thanks for the valuable feedback in the polls last week (Seems protocol details and nft market commentary are the biggest requests, stay tunned!)
As we all know NFT Markets crashed (more) after Azukis mint, BAYC reaching sub 28ETH per piece, with other collections following similar pattern.
This ofc impacted NFT Finance markets (one in a positive, others in a less positive way), lets dive in!
NFTFinance Ecosystem Status: Waterfall
NFT Lending: Underwater loans with P2Pool more affected, origination activity is there
Let’s start, as always, with overall market status:
Ecosystem Cummulative (Loans Origination) is growing: +7% Weekly growth with a total of $2.4Bn in loans created
However, given that prices tank, a good chunk of Blur loans goes underwater increasing liquidations, and reducing the total outstanding balances. For the first time ever since writing, Outstanding Debt in the Ecosystem goes down, totalling ($118MM)
Source: Dune
Despite this, each category reacted in different magnitudes. For this analysis, we are separating Blur from P2P, P2Pool (e.g Paraspace & Bend) and P2P (e.g Arcade & NFTFi)
Blend Market:
The most impacted: Outstanding Balances going down 30% to $28MM and defaults in literal vertical mode. Despite this, given its distribution method, the protocol is still the leader with 24% of share across NFT Lending
Source: Dune
P2Pool Market
As we know, P2Pool relies on oracles to determine NFT valuations and Loan sizes. As oracles on protocols does not update instantly, the lag caused additional liquidations. Category experienced a decline of 12% in outstanding balances ( $49MM in current loan book)
Source: Dune
LPs also reduced its exposure given potential fears of high level of bad debt
Source: Defillama
Paraspace is still the leader, surpassing BendDAO, with an outstanding 18% in total market share and $22MM in debt outstanding.
Surprisingly, Zharta Finance, was one of the few project who were resilient this week. Protocol TVL increasing despite the turbulence
Source: Defillama
P2P Market
In contrats, P2P Loan Market is oracleless, and had been more resilient. In particular Arcade managed to grew metrics: 50% Growth in one month ($9.4MM+ in outstanding debt)
NFTFi is still the leader in the category, however NFTFi Outs Debt decreases also 9% to $25MM
Source: Dune & Defillama
NFT Futures: Activity heats up
Activity exploded in our both protocols in coverage, given the strong use case to use NFT Futures as a hedge alternative (to a spot position) or speculate and the a short side
Tribe3:
Volumes: 18K Eth (3x in a month)
Transactions: 23K (3.5x in a month)
Users: 570 consistently trading
Remember the first time we talked about them in early may? They are doing +1.5K Eth in daily volume now. Use case is there
Source: Dune
NFT Perp:
Activity here also growing. In the last month: volume growing 20% (275K ETH) with +2500 traders doing +127K transactions
NFT PERP have the first mover advantage and a current trading incentive program
Source: Dune
NFT Options: Early but a potential strong use case
A not explored market so far but with a strong use case given assymetric trades potential: Loss is capped by the premium option buyer paid, and upside might be unlimited
Markets were volatile last week, and with so, this opportunity got more interest (mine included lol)
Wasabi, yes! our spicy and green frens, saw record activtiy
230 ETH in volume with LPs earning +$80K
TVL close to $1MM
+25 options / day issued
Source: Dune
Yes, On-Chain options might a hard pitch as requires more time to diggest, but the value proposition is there. Looking forward what the team can do to onboard more users in a seemless manner
That’s all for this week, too much happened last week. If you have any question, feedback, or just wanna chat about the space please feel free send a DM or write in the comments! (would love to connect)
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