Defillama Guide: How I find Great Alphas and Airdrop Opportunities
We are all aware that the crypto industry is constantly evolving. New projects and protocols are introduced every day and for new users, it can be a little difficult to figure out which ones hold the potential to become big. In addition, finding great alphas and airdrops is also something that newbies struggle with. However, there are now many tools in the market that can assist you in finding such opportunities. DefiLlama is one such onchain analysis tool that has proven to be a huge boon for users. In this article, we will dive deep into DefiLlama and its feature and show you how you can use the platform to find great alphas and airdrops.
What we are going to learn?
Brief Understanding of DefiLlama
DeFiLlama offers a comprehensive and all-round overview of the DeFi (decentralized finance) ecosystem through an analytics dashboard. It covers several blockchain networks such as Ethereum (ETH), Terra (LUNA), Avalanche (AVAX), Fantom (FTM), Cardano (ADA), and others. Given the decentralized nature of DeFi applications, it can be challenging to keep up with all the happenings across the DeFi space. This is where DeFi Llama comes in, as it tracks and aggregates data from all major blockchain networks and their respective decentralized applications (DApps).
The platform’s data team works diligently to analyze trading activity across the largest blockchain networks in the world. The data is then presented to the public in a clear and concise manner, including an aggregated summary of data across all the tracked chains. All the information provided by DeFi Llama is available to users at no cost. The platform offers a range of dashboards like DeF, Yields, DEX Meta-Aggregator, Borrow Aggregator, CEX Transparency, Liquidations and a lot more.
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The DeFi dashboard is the default setting of the platform. Under this dashboard, you can find various other subcategories.
Under the overview area, you get access to the TVL ranking section. The Total Value Locked (TVL) is a metric used to measure the amount of funds that are held within a DeFi platform’s smart contracts. It takes into account all the funds that are present on the platform for borrowing, lending, and other transactions. The industry’s overall TVL is calculated by aggregating the TVLs of all individual DeFi applications. This provides a comprehensive overview of the total value held in the DeFi ecosystem. You can filter the TVL rankings according to the platform, and also all blockchain-wise. According to the all blockchain chart, currently, Lido is leading overall. You can also see the ratio of market cap to TVL. If this ratio is under 1, the token is presumed undervalued.
Under the chains section, you can find out which blockchain networks have how much TVL. Along with the total value locked and the market cap to TVL ratio, you can also view other metrics like Stables, twenty four hour volume, and twenty four hour fees in this faction.
The airdrops section is another important part of the DeFi dashboard. In this section, the platform basically presents those protocols which don’t have a token yet and can do a token airdrop in the future. These speculations are made on the basis of which protocols have good traction and high TVL.
The next section that we have is the data oracles section. In this part, you find which data oracle has secured how much value as well as how many protocols have been secured. Oracles are mechanisms that facilitate the transfer of information from external, non-blockchain sources onto the blockchain for utilization by smart contracts. In the data provided by this section of the dashboard, the number of protocols secured does matter. The more the amount of partnerships happen, the more will be data growing Oracle.
Most top Defi protocols have an open source code. This code is forked as a result of which a new protocol is made. A fork occurs when a group of individuals within a blockchain community decides to alter the network’s protocol, effectively splitting the chain into two separate versions that share a common history but have distinct futures. Let’s take the example of Uniswap. Uniswap is a decentralized trading platform that employs smart contracts to facilitate transactions. As an open-source project, it is classified as a Decentralized Finance (DeFi) product due to its reliance on smart contracts for trade execution. Uniswap has been forked multiple times in the past with the forked protocols now amounting to around 379. Some of the most famous forks of Uniswao include PancakeSwap, SushiSwap, BiSwap and many more. Even though the data surrounding forks isn’t of much use in terms of providing analytics regarding which token to purchase, it does provide the users with some awareness and knowledge surrounding these protocols.
As the name suggests, under the Top Protocols section, DefiLlama basically provides you with a list of the top protocols under different categories. Under Defi, we have a huge number of distinct categories. These categories are:
- Liquid Staking
- Yield Aggregator
- Cross Chain
- NFT Lending
- Reserve Currency
- Leveraged Farming
- Options Vault
- NFT Marketplace
- Uncollateralized Lending
- Prediction Market
- RWA Lending
The Token Usages dashboard is one of the new additions to DefiLlama, it is a useful data section that provides a list of different tokens. You can select any token and view its usage by different protocols listed according to the amount. One thing you must remember is that this faction of the platform may not always be 100 per cent accurate. There are chances of a few discrepancies and faults in the data. Hence you must not rely on it completely.
Under the Yield dashboard, you can access a lot of data about the annual yield that you get under Defi. The yield dashboard is further classified into categories.
There is a Pools section where you can find the list of almost 8155 pools over 257 protocols on 57 chains. Decentralized finance (DeFi) practices, like lending, borrowing, and token swapping, utilize self-executing codes known as smart contracts. Participants in DeFi protocols deposit their digital assets into these smart contracts, referred to as liquidity pools, making them available for others to access. The chart gives you vital information associated with these pools like the Chain, the Total Volume Locked and the APY. The term Annual Percentage Yield (APY) is used to calculate the annual earnings generated from an interest-bearing account. Within the cryptocurrency space, the APY is the rate of return realized from a particular investment.
Then you also have the projects section which provides similar data for different Defi projects. This list can be sorted on the basis of filters like Category, Pools, Combined TVL, Audits, and Median APY. Additionally, other than these major charts, users can access yields data for other categories including
- Delta Neutral
- Long-Short Strats NEW
- Leveraged Lending
- Stablecoin Pools
DEX aggregators are financial protocols that allow traders and investors to access multiple trading pools through a unified interface. They utilize complex algorithms to evaluate multiple factors and determine the optimal trading platform for a specific token exchange. Recently DefiLlama launched its meta DEX aggregator, which promises to give the best price for a trade from eight different aggregators. They claim that the service is available across 22 chains and query the price in 1inch, cowswap, matcha, etc.
This DEX Meta Aggregator uses the router contract of each aggregator and not any contracts developed by DefiLlama. The team also claims that “We execute swaps directly against the router of each aggregator, so there’s no difference between a swap executed directly from their UI and a swap executed from DefiLlama.Thus, if any of the aggregators we integrate does an airdrop in the future, all swaps made through them would be eligible for their airdrop.
The CEXs Transparency dashboard analysis various centralized exchanges and brings forward the user data on how many reserves these exchanges have. They provided a lot of filters that you can use to sort through the data according to what metric you want to find. These aspects are as follows:
- Clean Assets
- 24h Inflows
- 7d Inflows
- 1m Inflows
- Last audit date
- Spot Volume
- 24h Open Interest
- Avg Leverage
The Volume data provides users with extremely useful information on what is the volume of different DEXs on different chains. This data also comes with details on the Weekly change in volume in terms of percentage which can also enhance your insight. The growth of a blockchain network depends on many things including Defi. And the major volume of Defi comes from the DEX. Hence if the activity on a DEX increases it implies in a way that more people are interacting with the blockchain, the network usage and revenue are increasing and it is growing in popularity.
The Fees and Revenue section gives you details on which dApps under which chains have generated how much revenue. This data highlights the fundament strengths of the projects and how much users prefer using them. A higher revenue represents more sustainable growth for the platform.
Under the Raises dashboard you can find all the data regarding the funding raised. So far in the blockchain space, there have been 4101 Total Funding Rounds that have raised a Total Funding Amount of 92.06 billion dollars. All the projects listed in this chart can be filtered on the basis of the Date of funding, the Amount Raised in the round, and the valuation. Other metrics that give you further enhanced information about these fundings are the Category of Round, the Description, the name of the Lead Investor, the Link to the information regarding the funding round, the Chains and the list of a few other investors. The data on funding is extremely essential because if more money is funded in a particular industry, then the growth of that industry is more likely. Only when there is enough funding can we see better products in the market with more efficient marketing strategies and a greater capacity to target a large user base.
The Stablecoin chart is a valuable but underutilized feature offered by DeFiLlama. This chart offers a comprehensive overview of the total market capitalization of stablecoins, broken down by asset and blockchain. The data displayed includes the market cap, details about the blockchain, and the stablecoin’s current price, among other information like percentage Off Peg, Price, 1 day Change, 7 day Change, 1 month Change, etc.
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As the Defi and crypto space grows, it gets more and more complex. However, instead of being intimidated, you need to learn how to harness the power of the many tools available to you. DeFiLlama is a trusted and comprehensive web resource for gaining insights into the world of decentralized finance (DeFi) protocols and blockchains. With its focus on delivering accurate data and analysis, DeFiLlama enables you to make informed investment decisions based on the growth and liquidity of various DeFi projects. The platform aggregates a wealth of information and continually develops innovative tools to help you stay updated in real-time.