As a crypto investor, do monitor the product’s onchain data to alert yourself of potential risk. 2 DeFi products with sharp data drop you must be aware of.
Alpaca Finance, a leveraged yield farming protocol on Binance Smart Chain, has experienced a dramatic fluctuation in its on-chain performance since May.
The total deposit volume first increased sharply to ATH $7.83B on 16th May, greatly dropped to only $92.12M the next day and remained mostly under $100M until 22nd July. Then it slowly recovered from $31.65M on that day to $463.39M on 27th Jul.
Till today, the volume went down 94.08% compared to the previous ATH. It indicates that fewer cryptocurrencies are deposited in the protocol, and it might lack liquidity.
$ALPACA price shows a high correlation to Alpaca Finance’s deposit volume. $ALPACA reached a period peak price $3.43 on the same day as the users ATH, then fell to a bottom price $0.37 on 26th Jun. When the deposit volume recovered, the price also slightly grew up to $0.68 on 27th Jul.
As for the total borrowed volume, it has a similar trend. It peaked at $2.24B on 7th May, and dramatically dipped to $50.94M in just 1 day, then kept below $100M with no sign of a bounce back. From 7th May to 27th July, the volume went down 99.26%.
The number of Alpaca Finance’s total unique users also witnessed a downward trend since May. After ATH 3.55K on 3rd May, it fluctuated and slid to 1.10K on 27th Jul, which is a 69.01% decrease.
Another BSC DeFi product Pancakebunny is now going through the dip.
As you can see from the above chart, all the data drop crazily since 19th May. It may be due to the hack on that day with more than $200 million drained from the platform. Since then, the users’ amount dropped 93.32% to 2.06K, volume dropped 98.58% to $7.36M, transactions dropped 90.09% to 17.53K.
And you can see a cliff fall in $BUNNY’s price from $282.36 on 18th May to $11.64 on the same day, a 95.88% drop in just one day. After that, the token price has never rebounded and followed the same trend as Pancakebunny’s volume.
If you are investing in Alpaca Finance or Pancakebunny, the huge drop in volume and users is definitely a signal that is worth your caution. It’s important to monitor a dapp’s on-chain data on dapp.com constantly because it serves as a basis for you to judge whether a dapp is under good or bad conditions and whether it’s stable enough to invest in.
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