Open Interest increased 324% QoQ and 45X over the previous six months, ending Q2 2024 with a total OI of $186 million. Ethereum emerged as the leading chain by OI in the second quarter.
Volume increased 394% QoQ to a total of $674 million. This growth occurred despite a significant pullback in the broader crypto market.
Morpho became the largest money market by volume, growing to $269 million in the second quarter. Aave and Silo followed with $224 million and $116 million, respectively, while the combined value of the remaining money markets was $65 million.
Details on the oTANGO airdrop were shared. Points holders will be entitled to an oTANGO airdrop based on their accumulated points, with at least 12% of the total supply reserved for the airdrop.
Primer
Contango is a DeFi protocol that allows users to loop various assets onchain, creating leveraged positions similar to perpetual contracts but with lower funding costs. It enables trading by building positions on top of spot and money markets, thus aggregating liquidity from both markets and facilitating large trades with minimal impact on rates and prices. Contango supports trading on multiple chains and markets, including six chains, 13 money markets, and more than 160 trading pairs.
Contango is designed to accommodate various types of users, providing distinct interfaces for different needs. Loopers can automate their recursive lending and borrowing strategies, while advanced traders can utilize the professional trade interface to take directional bets. Farmers and newcomers can leverage the simplified strategies to farm yields and rewards from LSTs, LRTs, and stablecoin pairs. With its comprehensive looping capabilities and UX, Contango positions itself as a leading looping layer in DeFi.
Contango is operational on six EVM-compatible chains: Optimism, Arbitrum, Gnosis, Ethereum, Base, and Polygon. As of the end of Q2 2024, Contango had a total open interest (OI) of $186 million. Ethereum emerged as the leading chain by OI, accounting for 68% of the total. Historically, the OI was more evenly distributed across the chains, but in June 2024, Ethereum's OI surged from approximately $40 million to $127 million. This sharp rise was attributed to the addition of (s)USDe pairs, allowing users to farm Ethena. Additionally, eETH pairs from Etherfi and increased popularity of looping on Contango on LRT/LST via Ethereum due to better liquidity contributed to the rise.
Arbitrum held the second position with an OI of $41.1 million at the end of the second quarter of 2024, representing 22% of the total OI. The large increase in Arbitrum OI in March was due to Pendle PT trading on Silo, and the decline in April was due to the PT expirations. The other chains had comparatively lower OI, with Base at $8 million, Gnosis at $5.9 million, Optimism at $2.5 million, and Polygon at $1.4 million. Open interest increased on every chain in Q2 except for Optimism and Polygon. By the last week of the quarter, Contango ranked among the top five leading protocols by open interest.
During the first quarter of 2024, Arbitrum was the leading chain by volume, achieving a total trading volume of $66 million. Optimism followed as the second highest, with a total trading volume of $26 million, while Ethereum ranked third with $22.5 million.
In the second quarter of 2024, significant changes occurred in the leading chains by volume. Ethereum surged to the top position, experiencing a 1,400% increase in volume to reach a total quarterly volume of $343.5 million. Arbitrum also saw substantial gains, with a 285% increase in trading volume, reaching $254.1 million. The remaining chains combined for a total trading volume of $76.7 million, marking a 59.7% QoQ increase. However, Optimism was the only chain that experienced a decrease in volume, dropping 17% from $25.9 million to $21.5 million. Total Contango volume peaked on June 26th with $41 million.
Overall, Contango's total trading volume in Q2 2024 was $674.4 million, up 394% QoQ. This growth was achieved during a period where the broader crypto market saw a significant pullback.
Throughout 2024, Contango has steadily added support for multiple money markets. By the end of Q2 2024, Contango supported 13 money markets across six EVM chains.
At the end of Q2 2024, the largest money market on Contango was Morpho, which experienced a significant increase in volume, growing more than 25 times from $10 million to $268.6 million in the second quarter. Aave, which was the leader at the end of the first quarter, also saw gains with a 169% QoQ increase, ending Q2 with $224.3 million in volume. Silo rounded out the top three, with a 449% QoQ increase, reaching $116.1 million in volume by the end of the quarter.
The combined value of the remaining money markets was $65.3 million.
Similar to the trends observed in open interest (OI) and trading volume, Contango saw an increase in trades and traders in Q2 2024. This growth is a continuation of the strong performance in Q1 2024. Notably, the breakdown of chains by users differs from the OI and volume breakdown. Arbitrum leads in terms of trades and traders, while Ethereum ranks second to last, only ahead of Polygon. This distribution suggests that whales are leveraging Ethereum, whereas smaller traders are operating on L2s where transaction fees are lower.
Activity on Contango peaked in March 2024, with the yearly high occurring on March 26, when the platform recorded approximately 730 trades and 100 traders. This peak coincided with the launch of Phase 2 of Contango Points. Phase 1 of Contango Points began on January 24 and was deemed successful, resulting in a sixfold increase in volume, a fivefold increase in OI, and a tenfold increase in users. Phase 2 is ongoing and will continue until the Contango token launch, for which no official date has been released. However, in June, the core team released a blog detailing the oTANGO airdrop.
Points holders will be entitled to an oTANGO airdrop based on their accumulated points. oTANGO is an option token that allows holders to redeem TANGO at a discount, with the current system setting the conversion rate at 1 point = 3 oTANGO. At least 12% of the total supply is reserved for the airdrop.
At the end of the second quarter, Contango had a Total Value Locked (TVL) of $22.5 million, representing a 171% increase QoQ and a 20-fold increase over the previous six months. Ethereum and Arbitrum were once again the leaders in this metric, with TVLs of $14.1 million and $6.1 million, respectively. The combined TVL of the other four chains at the end of Q2 2024 was $2.3 million.
Closing Summary
Despite a market-wide slowdown in Q2 2024, Contango demonstrated robust growth across all key metrics. Total open interest increased by 324%, while trading volume surged by 394%. The platform also saw significant growth in the number of trades, traders, and TVL on the network.
Throughout 2024, Contango has steadily expanded its support for multiple money markets. By the end of Q2 2024, Contango supported 13 money markets across six EVM chains.
Lastly, details on the oTANGO airdrop were shared. Points holders will be entitled to an oTANGO airdrop based on their accumulated points, with at least 12% of the total supply reserved for the airdrop.
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