Since Compound launched "lending-as-mining" in June 2020, sparking the DeFi boom, liquidity mining has dominated for nearly two years. The surge in on-chain activity drove gas fees to sustained highs—Curve's governance token launch in August 2020 saw deposit transactions costing ~0.3 ETH at 250 Gwei. While liquidity mining helped projects bootstrap, it also inflated a bubble, forcing market reevaluations of valuations, with top DeFi tokens plummeting up to 90% from peaks.
Despite the current crypto bear market, DeFi's scale has grown exponentially. Per Defi Llama, as of May 31, 2022, DeFi TVL hit $128.65B, a 116x increase from May 2020 ($1.1B), though down 53.7% from December 2021's peak ($277.98B). Leading projects have since built brand moats while innovating with upgraded versions.
Now, liquidity mining has matured. Below, we analyze ten pioneering DeFi projects post-boom.
Uniswap: The DEX Titan
Launched in November 2018, Uniswap solidified its dominance through iterative upgrades:
- V1: ERC20/ETH pairs only
- V2: Any ERC20 pairings
- V3: Custom liquidity ranges/fee tiers
Key Stats (May 2022):
- Trading volume: $62.6B (220x vs. May 2020’s $284M)
- Liquidity: $5.97B (down 43.1% from Dec-2021’s $10.5B)
- V3 captured 74% market share, leveraging ultra-low 0.05% fees for high-volume pairs like USDC/ETH, where LP returns outpace 0.3% tiers.
👉 Discover how Uniswap V3’s efficiency reshaped DEX dynamics
SushiSwap: The Vampire That Faded
Debuting in August 2020, SushiSwap’s "vampire attack" lured Uniswap LPs with four-digit APRs. Post-Uniswap’s token launch, however, Sushi lost momentum despite expanding to 10+ chains and adding lending (Kashi) and IDO (Miso) features.
Decline Highlights:
- TVL: $2.07B (70.6% drop from Nov-2021’s $7.04B)
- Trading volume: $3.93B in May 2022 (84.4% below May-2021’s $25.2B)
- Leadership instability (founder and key anonymous leads exited).
Curve: The Stablecoin Swap King
Launched January 2020, Curve dominates stablecoin trades. The "Curve Wars" erupted as factions like Convex competed to control CRV emissions, boosting liquidity for preferred stablecoins.
Innovations & Metrics:
- Tricrypto2 Pool: $470M liquidity for USDT/WBTC/WETH trades at 0.069% fees
- Cross-asset swaps via Synthetix (e.g., DAI→WBTC via sUSD/sBTC)
- Multi-chain TVL: $8.93B (700x vs. May 2020’s $12.75M)
Bancor: AMM Pioneer Reinvents
Bancor’s 2017 whitepaper birthed liquidity pools. Bancor V3’s May-2022 "Omnipool" merges all assets into one vault, eliminating BNT as a mandatory intermediary.
Current State:
- TVL: $620M (74.4% below May-2021’s $2.42B)
Synthetix: Synthetic Assets Leader
Transitioned from stablecoin project Havven in 2019, Synthetix pioneered liquidity mining. Its sUSD stablecoin issuance grew 12.1x since 2020 to 98.7M (70% below 2021’s peak).
Yearn Finance: Yield Aggregator Under Pressure
Launched July 2020, Yearn popularized fair token distribution. With DeFi yields now ~1%, its TVL fell 82.8% from December 2021’s $6.91B to $1.19B, pushing operations into losses.
MakerDAO: Decentralized Stablecoin Beacon
From single-collateral SAI (2019) to multi-collateral DAI, MakerDAO now supports four minting methods. DAI’s market cap hit $6.76B (51x vs. 2020’s $129M), maintaining soft-peg stability even during crises.
👉 Explore how DAI’s design ensures stability
Aave: Lending Market Leader
From EthLend to Aave V3, this platform excels in cross-chain capital efficiency. Current V2 deposits total $12.56B (down 60.2% from Oct-2021’s $31.59B but 161x higher than 2020).
Compound: The Original Yield Pioneer
Compound’s June 2020 token launch ignited liquidity mining but stalled with missed multichain opportunities. Current TVL: $4.33B (borrow volumes down 86.1% since Sept-2021).
dYdX: Derivatives Platform Faces Volatility
Post-token launch, trading volume for BTC/USD pairs dropped 89.8% from February 2022’s $17.27B weekly peak.
Key Takeaways
- Brand Moats Matter: Uniswap, MakerDAO, and Aave’s longevity defends against forks.
- Innovation Drives Growth: Uniswap V3 and Curve’s cross-asset swaps expanded utility.
- Multichain = Expansion: Top projects now span multiple ecosystems.
DeFi’s metrics, though down from 2021 highs, still dwarf 2020 levels—TVL (+116x), Uniswap volume (+220x), Aave deposits (+161x).
FAQ
Q: Why did SushiSwap decline post-2021?
A: Leadership exits and Uniswap’s token launch eroded its competitive edge.
Q: How does Curve maintain stablecoin dominance?
A: Via low-fee pools and strategic partnerships (e.g., Synthetix for synthetic asset swaps).
Q: What’s DAI’s stability secret?
A: Diversified collateral (ETH, USDC, real-world assets) and the Peg Stability Module.