July Review — #OHMISBACKED

5 min readAug 4, 2021

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July met and continued to exceed expectations. To get an idea of how the system is growing, let’s again review our protocol metrics.

Data Source

The data used in this article is taken from The Block’s DeFi revenue page, which you can find here, and sh4dow’s Dune Dashboard, which you can find here.

Tl;dr

Treasury Risk-Free Value +$13.7m (↑144%)
Treasury Market Value +$38.4m (↑115%)
Highest Revenue in Industry
Lowest Market Cap/Revenue ratio in Industry (14.1x lower than next lowest)
Lowest Market Cap/Protocol Revenue ratio in Industry (44x lower than next lowest)

The Charts n’ Numbers

First up we’ve got the Realized Value of the treasury. This number measures the USD value of our treasury. This has no price risk — it is the minimum USD value of the treasury, barring an exploit or loss of peg on DAI or FRAX.

RV more than doubled in July, rising from $9.5m to $23.2m.

The realized value of the treasury. This value is agnostic to the market and contains no price risk.

Value realized by the treasury each day.

Market value rose similarly, going from $33.3m to $71.7m. The market value of the treasury is a more volatile metric because it includes the market value of treasury-owned LP shares, which change in value along with OHM price.

The market value of the treasury. This value is exposed to the market and carries price risk.

Treasury market value gained or lost each day.

Both of these have led to a considerable increase in backing per token. (+$8.45/+44%)

Despite balances increasing by 48%.

The index measures the increase in balance of an OHM staker (i.e. 6.1 OHM staked on July 1 became 9.24 OHM on July 31).

Combined, we can see the index-adjusted backing per token. This takes balance increases into account, and provides a more consistent measurement of value accrual.

Liquidity also rose significantly over the month, going from $29.2m to $48.2m. This accumulation has accelerated in recent weeks with a greater emphasis placed on it within policy.

You can see the comparative growth of the aforementioned metrics here.

The previous metrics feed into overall revenue. This is the amount of capital taken in by the protocol, measured as market value at the time of acquisition. In the case of networks like Uniswap, Sushiswap, and Bancor, revenue comes from trading fees. For Aave and Compound, it comes from interest. For Olympus, it primarily comes from bonds.

Revenue brought in by DeFi protocols in the month of July.

Annualized, it looks like this:

Annual revenue of DeFi protocols if each month was equal to July. (July revenue * 12)

While pure revenue is a great metric, it doesn’t tell the whole story. This metric includes both fees accruing to the protocol, and fees accruing to users (liquidity providers, lenders, etc). If we want to look at this data to analyze the value accrual of the network itself, its more accurate to use Protocol Revenue (revenue excluding what gets paid to users).

Total value accrued to protocols in the month of July.

You can see that, for the month of July, Olympus had by far the highest protocol revenue in the industry. (Note: this does exclude Axie). Annualized, it looks like this:

Annual value accrued to protocols if each month was equal to July. (July protocol revenue * 12)

Finally, let’s put it in the context of network values. Here we have the market caps of each protocol.

The market capitalization of top DeFi protocols. (Token Supply * Price)

Here is the market cap to annualized revenue ratio: (if a protocol has a market cap of $1b and will take in $100m this year, this number would be 10).

Here is market cap to annualized protocol revenue, which measures how much value is accruing to the token relative to the market cap of the token.

Next we have market cap versus the realized value of the treasury. This can be thought of as our fractional reserve rate. The higher it is, the higher the fractional reserve. We saw a steady deleveraging throughout the month.