Recently, the issue of 1,800 $BTC void staking has sparked discussions about who stands where. Perhaps in the end, regardless of who profits, it won't benefit retail investors, and even the consequences of FUD will eventually fall on retail investors 🤣.
👉🏻 Today, I only want to talk about how we can use data to assist in measuring the 'value' of the protocol if the TVL data is questionable.
The total locked value (TVL) in a protocol is an important metric in DeFi. If we compare DeFi protocols to banks, TVL is the total amount of deposits by savers in a bank, essentially representing the 'debt' the protocol owes to users.
Just like banks can lend out deposits from savers, protocols can also lend funds to DeFi projects that need liquidity to generate revenue. In return, these projects need to pay corresponding interest to the protocol, which is also one of the main sources of income for the protocol.
🧐 Why does 'void staking' exist?
The deposit rate for banks is similar to TVL for DeFi protocols. If one wants to be listed on Binance or major exchanges, there are similar requirements to the bank deposit rate. If the TVL does not meet standards, some small tricks may be used, which might already be an unspoken rule among everyone.
For example, in the recent incident with Solv, a large holder only needs to sign a wallet to prove BTC ownership and express the intention to stake, and this portion of BTC can be considered as the protocol's TVL without needing to actually stake the BTC into the protocol.
Such assets lack liquidity, large holders will not touch them, and the protocol has no right to utilize them. Large holders gain points, and project parties inflate TVL, which is considered a win-win situation, even though it is ineffective TVL.
💡 Introducing the concept of 'capital operation efficiency'
It's actually quite difficult to determine which funds are 'ineffective TVL', but we can introduce 'capital operation efficiency' to indirectly assess the value of the protocol:
> Capital operation efficiency = Net income of the protocol / Total TVL
The income obtained by the protocol through fees, loan interest, and other means directly reflects the profitability of the protocol, and perhaps is a better indicator of the protocol's potential value than the height of TVL.
Finally, I compared a few representative re-staking protocols. Solv and $ETHFI are of similar scale, and the 'capital operation efficiency' is actually not too different (some re-staking protocols have not disclosed income data, so I won't list them all; if there are errors, feel free to correct me).
👉 Ethereum's re-staking has developed for more than two years, while the Bitcoin re-staking ecosystem is still in its infancy. I believe that Solv's capital efficiency should improve without much issue.
— Instead of FUD, it's better to Build; winning together is better than losing together 🫰
