Try Quests to earn cryptoStable coin lending activity in 2023
Comparing stable coin lenders behavior in Aave & Compound
Introduction & Methodology
Depositing stable coins on lending/borrowing platforms is one of the most common ways to earn yield in Defi. Here's how stable coin depositors behave in Aave on Ethereum chain in 2023, compared to Compound, another famous lending/borrowing platform.
You can see this here if you like to find more about Aave and here if you are interested to know more about Compound.
In this dashboard, I find the number of stable coin depositors on Aave and Compound. I also find the number of their lending transactions, and the volume and type of their deposits on each platform. In the next step, I will track their borrowing activity to figure out which platform's users are more active in borrowing instead of depositing stable coins.
Wallets
Findings
- Aave, which has 2686 unique stable coin lenders in 2023, has a higher level of popularity for depositing stable coins among the crypto community than Compound, which has 660. Also, if we look at the daily lender wallets, we see all days of 2023 Aave has a higher number of lenders than Compound.
- Only 4.6% (149 in numbers) of wallets that lent stable coins in 2023 have used both platforms! Except for this group, 79% made a single choice and used Aave and 16% chose Compound only.
- Although Aave has higher number of Stable coin depositors in total, but in Compound Stable coin depositors have higher share in total lender wallets Comparing with Aave, in other words, Stable coin depositing is more common behavior in Compound lenders comparing with Aave.
Number of lending transactions
Findings
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Based on the number of transactions $USDC is the main asset to lend on both platforms. However, in Compound, number of $DAI deposit transactions is close to $USDC transactions. We can see more superiority for $USDC in Ave compared with Compound.
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Although Compound has a lower number of stable coin lenders than Aave, we can see that Compound users are more active in lending stable coins compared with Aave!
Each stable coin lender on compound is making 4 deposit transactions on average, which is 2x more than the same metric on Aave.
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In terms of dollar volume, Aave deposit transactions are more valuable! In Aave, each stable coin lending transaction has a volume of $785k on average, $61k more than in Compound!
Findings
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If we look at the volume of the deposits, we see $USDC is the main choice to lend, just Like the number of lending transactions! And it’s interesting $USDC have almost the same share in total lending volumes in both Aave and Compound platforms (73.2% in Aave & 73.1% in Compound).
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In the terms of volume, The 2nd choice for lending is different on each platform, In Aave, $USDT is the main choice with 15.6% of share in all deposits, while Compound users prefer to deposit $DAI for lending after $USDC as $DAI have 17.7% share there.
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In Aave there are 9 different stable coins are available to deposit, while in Compound stable coins are less than half of this number! So Aave users have more options for lending stable coins,
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The lowest gap the volume of deposits of 1 asset in these 2 platforms belongs to $DAI, with $105m gap (469m in Aave vs 364m in Compound)
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In three of the four assets available on both platforms, Compound has a higher average deposit per unique user than Aave.
Additionally, Compound has a much higher average deposit volume per user than Aave.
But Aave still has a higher total volume of deposits across all stable coins compared with Compound .
In fact a larger community has played a significant role in helping Aave reach a higher total deposit volume compared to Compound!
Volume of lending transactions
Do the stable coin lenders borrow too?
Findings
- There are almost 5x more stable coin depositors who tried borrowing in Aave than in Compound (I think it’s not surprising, because Aave has more users compared with Compound). But on both platforms, most depositors do not attempt to borrow assets, if we take a look at the overall type of borrowers. As in both platforms, the share of stable coin lender users in all borrower wallets is less than 30%. But, in Compound this kind of behavior is a bit more common than in Aave (In Compound, 27.9% of the borrower wallets are the ones who deposited stable coins on the platform while in Aave this amount is 23.9%).
- On average, AAVE stable coin depositors are making 2 more borrowing transactions compared Compound stable coin depositors users, Also, on average each borrowing transaction in Aave has more volume than Compound ($936k vs $752k), So we can say an average Aave stable coin depositor is more active than a Compound depositor.
Borrower wallets and borrowing transactions
Findings
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For stable coin depositors, stable coins are again the preferred option for borrowing on both platforms! As more than 50% of the borrowing volume is made up of this kind of asset.
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When we look at the types of assets borrowed by Aave stable coin depositors compared to Compound depositors, we see that most of them are stable coins, while in Compound there are more risky options like $BAT, $LINK, $MKR, $SUSHI, $AAVE.
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$DAI is much more popular for borrowing by the Compound stable coin depositors compared with Aave depositors, as there is a $6.4m gap between the borrowing volume in these 2 platforms ($8.1m v 1.7m) . Instead, we can see an $8.7m gap for $USDT borrowing, which is the favorite asset for stable coin lenders on Aave to borrow.
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On average, AAVE stable coin depositors are borrowing $2.2m more compared with Compound stable coin depositors.
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Conclusion
- Aave is the primary choice of Ethereum users to lend stable coins rather than Compound. Although, an average user being more reactive to lending stable coins than an Aave user, having more users helps Aave to achieve much more deposit volume compared to its rival.
- There are few users who are active on both platforms at the same time, either in lending or borrowing. Users usually choice one platform and do their lending/borrowing actions in there instead of using both Aave and Compound on the same time.
- In spite of the fact that Aave offers a variety of stable coins for users to deposit than Compound, $USDC remains the most popular choice of deposits by far, this asset owns more than 70% of deposits volume on both platforms.
- Stable coin lenders are not risky players! The majority of their borrowings from these platforms are stable coins, the same type of assets they deposit here.
- Although the lenders prefer stable coins to borrow, their main choice is not the same asset in these 2 platforms. Based on the volume of borrowings, $DAI is the main choice in Compound and $USDT is the preferred one in Aave
- As opposed to lending actions, Compound stable coin depositors are less active in borrowing actions compared to Aave stable coin lenders.
