The Impact of Liquidity Mining on DeFi User Growth | ConsenSys Codefi

The DeFi User Base Overview

Figure 1: User Growth on 14 major DeFi Protocols (by Aug 10th, 2020)

How Many Daily Active Users Are Seen Across Platforms?

Figure 2: DAU of 14 DeFi protocols. April — August, 2020
  1. Looking at daily active users (DAU), how many new users were brought into each specific protocol during the yield farming frenzy?
  2. Among those newly introduced users, how many are new to DeFi entirely? If they are not new, but rather existing DeFi users, which other platforms did they come from?

Methodologies

Compound

Figure 3: Compound’s Daily New Users in 2020
Figure 4: breakdown of compound’s new users coming from other DeFi

Curve

Figure 5: Curve’s Daily New Users
Figure 6: breakdown of Curve’s new users coming from other DeFi

Balancer

Figure 7: Balancer’s Daily New Users
Figure 8: breakdown of Balancer’s new users coming from other DeFi

Conclusion

  • Timeline-wise, Balancer launched the liquidity mining mechanism as the first pioneer, as early as May 29th; while only until June 15th when Compound launched their campaign, liquidity mining was brought to the majority’s sight, due to Compound’s wide adoption and user foundation.
  • Due to yield farming, 88% of Compound’s, 28% of Curve’s, and 63% of Balancer’s new users were also entirely new to DeFi. Comparatively, Compound and Balancer had a larger impact for expanding the community’s user base.
  • After a short hype of a few days, among those 3 protocols, Balancer showed the most sustainable user growth with a steady trend going forward.

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