Is the Bitcoin DeFi project Sovryn really surpassed Uniswap v3 by TVL?

Sovryn, a BTC money market protocol built on the Bitcoin-based smart contract platform RSK, seems to have soared in the ranking of decentralized finance recently.

On June 9, Bitcoin commentator, Anthony Pompgliano, Sharing data from DeFi Llama, a decentralized financial data aggregator, to his 1 million fans, indicating that the agreement has accumulated a Total value locked (TVL) for 1.95 billion US dollars-ranked 14th in the field, beating DeFi darling Uniswap v3.

Pomp and many of his followers are dissatisfied that platforms that focus on Ethereum, such as DeFi Pulse, do not list Bitcoin DeFi projects such as Sovryn and Stacks. Influencers say:

“One will be in the top 15 of the TVL list, and the other will be in the top 25. Why not include it?”

Pomp’s post on Sovryn drew criticism from supporters of the Ethereum ecosystem, who refuted Sovryn’s idea of ​​accumulating 10-figure TVL. “ChainLinkGod” implies that the mortgaged governance tokens may have led to inflated TVL estimates.

Since Pomp’s original post, DeFi Llama has adjusted Sovryn’s data and now lists the project as a TVL for only $52 million.The updated data now matches the TVL provided by Sovryn itself Wiki.

In a statement on June 10, DeFi Llama confirmed that its previous estimate of Sovryn’s TVL of close to $2 billion was indeed due to the capitalization of pledged assets. The data aggregator added that it will release an update to its website soon, allowing users to choose whether to include mortgage assets in the TVL data.

Since the popularity of decentralized finance in 2020, TVL has become the main indicator of the success of the agreement.

However, many analysts believe that TVL is simplified and should not be regarded as the only indicator for measuring the progress of DeFi projects.

CoinGecko co-founder Bobby Ong said in an interview with Cointelegraph that, just as market capitalization has become the main measure of the success of tokens or tokens, TVL is becoming more and more popular because of its simplicity, emphasizing the establishment of “a comparative number. “Convenience. All DeFi protocols. “

“This is not a perfect measure […], But this is the most direct measurement that people understand and use as a benchmark,” he added.

Ong believes that total trading volume should be the main indicator for measuring decentralized exchanges (DEX), and pointed out that trading volume “drives agreement revenue.” For the same reason, he believes that borrowing volume should be the main measure of money market agreements.

Ong also recommends that analysts pay more attention to combining TVL with other key indicators to illustrate Capital efficiency Liquidity locked in a given agreement:

“For DEX, looking at transaction volume/TVL will measure the efficiency of using liquidity to increase the agreement and LP fees.”

Ong also believes that dividing a project’s TVL by its market value or a fully diluted valuation (FDV) is useful for comparing DeFi protocols operating in the same market segment.