"Liquidity mining" has been popular for nearly two years since Compound launched "lending as Mining" in June 2020. Due to the increase of on-chain activity driven by DeFi, GAS charges remain high for a long time. When Curve issued governance tokens in August 2020, at a Gas Price of 250 GWEI, a deposit transaction in Curve required a Gas fee of about 0.3 ETH. While liquidity mining helped projects get off to a cold start, it also created a huge bubble as the market began to redefine project valuations and many of the DeFi leaders fell 90 per cent directly from their highs.

Despite the new crypto bear market, the DeFi market has grown significantly from two years ago. According to Defi Llama, TVL in Defi apps stood at $128.65 billion as of May 31, 2022, an increase of about 116 times compared to $1.1 billion two years ago as of May 31, 2020; But it was down 53.7% from its high of $277.98 billion as of December 3, 2021. Over the past two years, Head's DeFi project has built a brand moat, while constantly innovating and iterating new versions to provide better products to the market.

Uniswap

Originally launched in November 2018, Uniswap has consolidated its position as the leader through step by step innovation, from Uniswap V1, which could only pair ERC20 tokens with ETH, to Uniswap V2, which could provide liquidity between any ERC20 token. Now Uniswap V3 can customize the liquidity range and fee ratio.

In May this year, Uniswap's transaction volume was about $62.6 billion, representing a 220-fold increase from $284 million in May 2020. That's down about 26.1 percent from a high of $84.7 billion in May 2021. Current Uniswap liquidity totaled $5.97 billion as of May 31, 2022, down 43.1% from a high of $10.5 billion as of December 1, 2021.

The V3 update has further boosted Uniswap's market share to 74%. In the past, most DEX transactions have a default fee ratio of 0.3%, while Binance and other centralized exchanges have a fee ratio of less than 0.1%. DEX does not have a fee advantage over centralized exchanges. After Uniswap V3 goes live, traders will enjoy a lower fee ratio due to more concentrated liquidity around market prices, while liquidity providers will enjoy higher returns due to improved capital utilization.

SushiSwap

Launched in late August 2020, Sushi is Uniswap's early fork project, an attempt to capture Uniswap's market with a vampire attack without Uniswap launching governance tokens. Users provided liquidity on Uniswap, then pledged LP tokens to SushiSwap for liquidity mining, and at one point APR was over 1000% for some trade pairs. After a period of time, this liquidity is automatically withdrawn from Uniswap and deposited at Sushi.

After Uniswap issued the coin, Sushi lost ground. Even though Sushi has expanded to more than a dozen chains and added Kashi's lending and Miso's IDO functions, it still lacks core competencies. Personnel changes have also been a destabilizing factor for Sushi. In September 2020, Chef Nomi, the founder of Sushi, handed over the administrator authority; In September 2021, anonymous leader 0xMaki also announced his official exit. Sushi's liquidity was only $2.07 billion, down 70.6 percent from $7.04 billion as of Nov 9, 2021, Defi Llama showed. Trading volumes of $3.93 billion in May were down 84.4 percent from a high of $25.2 billion in May last year.

Curve

Curve was released in January 2020 and dominates the major stablecoin trading market. Due to the competition between convex-Convex and its similar project and the rise of algorithmic stablecoins, "Curve War" makes relevant participants in the market need to buy CRV and pledge, so as to control the issuance of CRV and attract more liquidity for their supported stablecoins on Curve.

Uniswap V3 competes with Curve in the stablecoin market with a 0.01% first tier fee, and Curve is also trying to enter the cross-asset market with various innovations. In addition to the main stablecoin exchange, Curve has also made a lot of efforts in cross-asset trading. Curve has partnered with Synthetix to launch a cross-asset trading feature, such as trading DAI to WBTC, which will first convert DAI to sUSD in Curve, and then convert sUSD to sBTC in Synthetix through synthetic asset trading. Then convert sBTC to WBTC in Curve. Since the market value of SNX is gradually declining, the liquidity of synthetic assets is limited, and large transactions are limited by the liquidity of synthetic assets such as sUSD in Curve.

Curve's Tricrypto2 pool has also accumulated more than $470 million in liquidity, with USDT, WBTC, and WETH each accounting for about a third of the current transaction fee ratio of 0.069%, providing a low-fee, low-slip trading route for the top three tokens by market capitalization.