A Closer Look at DeFi Lending Valuations

As DeFi matures, memes and narratives will make way for quantitative and qualitative analysis in determining valuations for tokens. Below, we take a look at the main lending platforms, their ability to attract and put capital to use. We also compare across several metrics to gauge where token valuations lie among them.

When Compound introduced liquidity mining last summer, they set the DeFi sector aflame. Lending Deposits have grown exponentially since, reaching a cumulative $20 billion among the top three platforms, generating $660 million interest per year as of the time of writing.

On the other end, Borrowing Volume has also grown exponentially, recently reaching $7.6 billion.

Below we look at key valuation metrics for major lending protocols to see how they’re priced relative to each other. Afterward, we assess the strengths and risks of each protocol and where pricing dislocations might lie.

First, an overview of the five largest protocols: