Original author: jpn memelord
Original translation: TechFlow
There has been a lot of discussion lately about Solana surpassing all EVM chains in terms of transaction volume. I decided to take a deeper look at the quality of liquidity pools on top blockchains to determine if this is just a passing trend or a true disruption to existing chains. Join me as I dive deeper.
The methodology for this analysis draws on the criteria for stock inclusion in major stock indices.
The three main criteria are:
Established transaction history
High liquidity
Sustained trading volume
These standards have similar applications in liquidity pools.
Methodology Construction
The following methodology summary is provided for informational purposes only. For full details please review the methodology document at SP Global .
Applicability: All constituent stocks must be U.S. companies.
Market Cap Eligibility: To be included, a company must have an unadjusted market cap of at least $14.5 billion and its float-adjusted market cap must be at least 50% of the minimum unadjusted market cap threshold.
Public Flourish: The company must have an Investable Weight Factor (IWF) of at least 0.10.
Financial viability: The company must have positive earnings in the most recent quarter and the most recent four quarters (combined).
Adequate Liquidity and Reasonable Price: Using a composite of pricing and trading volume, the ratio of annualized trading volume (defined as the average closing price during the period multiplied by historical trading volume) to float-adjusted market capitalization should be at least 0.75, and the stock should have traded at least 250,000 shares per month in the six months prior to the valuation date.
Industry Representation: Industry representation is measured by comparing each GICS® industrys weight in the index to its weight in the SP Total Market Index, taking into account company selection within the relevant market capitalization range.
Company Types: All eligible U.S. common stocks listed on eligible U.S. exchanges are eligible. Real estate investment trusts (REITs) are also eligible. Closed-end funds, ETFs, ADRs, ADSs, and certain other types of securities are not eligible.
Are there stocks that are not in the major indices that can be traded? The answer is yes.
However, these stocks make up the “blue chips” of the traditional financial world, and finding DeFi analogs can help us assess what traditional finance might be eyeing when entering the DeFi space.
I collected volume data from all liquidity pools on Ethereum, Solana, BSC, @arbitrum , and @base , and tallied the total volume over the past 30 days.
Next, I weighted those pools that were created in the past 30 days to move down in the rankings so that they meet the “established history” criteria.
Finally, I weighted each pool’s trading volume and total value locked (TVL) to meet the other two criteria.
Next, I applied a weight adjustment to those liquidity pools created in the past 30 days to lower their ranking so that they meet the established history criteria. I then weighted each pools trading volume and total value locked (TVL) to meet the other two criteria. The specific formula is: Ln(TVL)/Ln(MAX(TVL)) * TVL_weight.
This scaling method has little impact on pools with better liquidity, but will lower the ranking of pools with smaller TVL.
Here is the New Premium Top 20 ranking based on this weighted approach.
The first thing worth noting is that Ethereum, Solana, Arbitrum, and Base each have a representative pool in the top 4!
These pools are all “primary” pools that trade the native tokens of their respective chains against USDC.
Another notable feature is that Ethereum still dominates, occupying half of the top positions in this ranking. The high TVL combined with the continuous transaction volume makes it stand out among all chains.
I strongly suspect this is part of the reason Blackrock chose to deploy to Ethereum.
Digging deeper, the first two pools are particularly eye-catching:
@AerodromeFi s slipstream WETH-USDC pool has the highest volume, while the highest TVL is
@Uniswap ’s v3 WETH-USDC pool on Ethereum.
Dune data link:
Transaction volume index of top blockchains
On most blockchains, the main liquidity pool with a fee rate of 0.05% is a top pool, but on the BNB chain, the 0.01% pool is a top pool, which is somewhat surprising.
Also, USDC is used in more top pools than USDT, which is also unexpected to me.
How many pools are there on each chain?
Ethereum: 10
Base: 5
Arbitrum: 2
BSc: 2
Solana: 1
All other Solana pools in this analysis are unable to make the top rankings due to insufficient TVL (Total Value Locked). Despite the large trading volumes, these trades occur at a time when liquidity is significantly lower than other chains.
Without considering TVL, Solana has a decent amount of volume in the top 150 pools, but it’s not close to surpassing all EVM chains, or even Ethereum (although it’s very close).
The top 20 assets traded across all pools include:
Stablecoins: USDC, USDT, DAI, pyUSD
Major currencies: ETH, BNB, SOL, cbBTC, WBTC and wsETH
Others: AERO
Surprisingly, Aero is the only token that is neither a stablecoin nor among the top five cryptocurrencies by market cap.
TVL of the top 25 pools per chain:
Ethereum: $1.04 billion
Base: $310 million
BNB: $194 million
Solana: $181 million
Arb: $155 million
Clearly, Ethereum is still the winner, but Base is leading among other chains.
Additionally, it’s worth noting that 4 out of 5 pools on Base are from Aerodrome, showcasing their significant lead on that chain, even as Uniswap dominates on Arbitrum and Ethereum.
Summarize
The majority of Solana’s volume comes from illiquid pools, a significant portion of which comes from Pump Fun. ( link )
Ethereum remains the dominant player in DeFi, but Base is unexpectedly becoming a strong challenger as it has the pool with the highest transaction volume.
This focus on the economy is not a bad thing, but I think that sophisticated investors who want to dive deeper into DeFi are more concerned with sustained economic activity from deep liquidity pools than which animal coin is hot this week or today.
There are many aspects of this analysis that could be further explored and refined:
Automated calculation of TVL metric
Don’t just focus on TVL, but also look at liquidity depth (CL pools are very capital efficient)
Consider the pool’s fee tier
I will be releasing part 2 of this analysis in the coming weeks.
