JustLend, the Tron-based web3 lending market, has overtaken Aave total value locked to emerge as the sector’s leading protocol.
Data from DeFi Llama shows JustLend ranking as the third-largest DeFi protocol with a TVL of $6B after growing by 12% in 30 days. The move propelled the protocol past the lending sector’s long-time leader, Aave, which currently holds $5.75B in assets after posting a 3.7% gain over the same period.
JustLend exclusively operates on the Tron network, while Aave boasts deployments across nine chains from the Ethereum ecosystem plus the Harmony alternative Layer 1.
The milestone is the latest sign that Tron has cemented itself as the leading rival to Ethereum’s DeFi dominance.
Tron overtook BNB Chain as the second-largest network by DeFi TVL in March, with Tron crossing above $5B and continuing to produce growth while BNB Chain slipped below $5B and entered a protracted downtrend that would not reverse until last month.
Tron now boasts a TVL of $8.2B while BNB Chain ranks as a distant third with $3B. Ethereum’s TVL sits at $25.5B.
Alt L1s Decline
Tron’s impressive growth comes in defiance of the heavy losses incurred by many of the alternative Layer 1 networks that dominated during the previous bull cycle.
Skyrocketing fees driven by ravenous demand for block space on Ethereum gave rise to low-cost networks hosting forks of DeFi’s leading protocols. Many users who felt priced out of Ethereum’s ecosystem opted to transact using the likes of PancakeSwap on BNB Chain to bypass the comparatively high fees associated with Ethereum-based decentralized exchanges.
BNB Chain, Solana, and Avalanche were among the top gainers, each of which boasted a more than $10B TVL at their respective peaks.
However, with much of alt L1s’ growth propelled by unsustainable inflationary incentives, plus the rise of Layer 2 network offering cheap fees in combination with the security and decentralization of Ethereum’s base layer, low-cost Layer 1s were among the sector hardest hit by the recent bear trend.
The TVL of both Avalanche and Solana is down more than 94% from their respective peaks, while BNB Chain sank 86%.
Tron’s market dominance
Tron is by far the leading network by daily active users with 1.5M, according to Token Terminal. BNB Chain follows with 965,000, while Ethereum sits at 320,000.
Tron’s impressive user base enjoyed growth alongside its emergence as the leading network for stablecoin volume owing to its low transaction fees. Recent analysis from The Defiant suggests stablecoin transfers incur roughly $1.30 worth of fees, compared to $3.50 on the Ethereum mainnet.
Ethereum Layer 2s offer stablecoin transfers for just $0.11, but require great technical knowledge from users as assets must be bridged over from the Ethereum mainnet.
StUSDT, a Tron-based stablecoin offering yields derived from government bonds, ranks as the eighth-largest DeFi protocol with a $2.3B TVL after launching in July.
In July, Justin Sun, the founder of Tron, withdrew $52.5M worth of stablecoins from Aave. Sun also withdrew $4.2B worth of assets from Aave in October 2021.