Determination of DeFi, NFT attraction to Ethereum and Binance Whales

In the past few weeks, the DeFi and NFT boom seems to have slowed down significantly as the price movement of large crypto assets gains momentum. On the whole, their performance is still phenomenal, but one is the fact that many speculators believe the story of DeFi, NFT, to be the same. While DeFi or various dApps have some kind of functionality, NFTs are just valuable collectibles.

With Ethereum and Binance Smart Chain (BSC) leading the DeFi and NFT markets, we need to analyze market data to determine investors’ DeFi and NFT allocation ratios.

DeFi whales are like “sand in the desert” on Ethereum

If you break down the data from the third quarter of 2021, you can see that, despite the huge interest in NFT and blockchain games, DeFi space has seen over 590,000 unique whales active daily, valued at $ 178 billion in TVL achieved. Whales thrived more on the Ethereum network than on BSC, with the average transaction size on Uniswap reaching USD 52,900 and PancakeSwap not exceeding USD 1,000.

Source: DappRadar

Right now, whale concentration is most likely to be seen in Ethereum logs, although the transmission or gas fees are usually higher than BSC. With a higher volume of liquidity, DEX on Ethereum reduces latency, enables better price execution and minimizes slippage.

Source: Coinecko

However, according to the latest 24-hour trading volume, PancakeSwap is currently outperforming Uniswap by 1.3%. While consistent whale activity may not be apparent on PancakeSwap and BSC, it could be the platform casual traders are looking for, and for them cheaper gas rates are a huge plus.

NFT too

Source: DappRadar

After determining the presence of whales on Ethereum and Binance, let’s look at the number of wallets that interact with at least one DeFi protocol and have an NFT token. According to the graph above, in October 2021, 83% of users in both Ethereum and BSC only interact with DeFi, while 17% participate in both NFT and DeFi.

So, while interest in NFTs and games is largely marketed, the numbers favoring the functionality of protocols and NFTs could become less important in the future.

Is that the whole truth?

It is not fair to immediately ignore NFTs as they gain a benefit that will appeal to a new class of investor. This add-on is exclusive because investors can have a completely different collection than another collection.

Does it have any real practical value? Probably not, but influencer-tied NFTs will attract a lot of publicity, for example, a Cristiano Ronaldo NFT will sell for millions of dollars just because of its value. Hence, the NFT certainly has a market element. Although it is currently very small compared to large industry, there is still a long way to go.

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