Sui ecology explodes, Navi or Scallop, who is the leader in lending?

When evaluating DeFi protocols, you cannot simply look at TVL.

Written by: Spinach Spinach

What is the reason for Sui’s surge? Is Sui's ecosystem about to explode? Spinach will give you a brief review and understanding of some projects in the Sui ecosystem that are currently worthy of attention.

After Spinach discovered last time that Sui's TVL and cross-chain activities had increased significantly, Spinach also experienced a surge in Sui by accident (without doing any research in advance).

We have never studied or paid attention to the Move ecology before, so we have never understood it well. However, since I wrote several tweets about Move smart inscriptions, we have discovered the advantages of the Move language, especially its advantages in financial application scenarios. A very powerful advantage because it can realize the decoupling of asset ownership and smart contracts.

This is different from the Ethereum system. In the EVM system, if there is a security problem with the smart contract, then the assets inside will also have problems. Using the Move language can avoid such a situation, even if the smart contract has a security problem. The problem is that your assets will be fine (this depends on the design of the contract, if it is a pool, there is still a risk). In short, the Move language will be safer and more flexible than Solidity.

However, because the Move language is still relatively young, many people do not understand it, and the developer ecosystem is not as good as Ethereum and Solana. It has been tepid before, but with the narrative of high-performance chains and the rebirth of Solana, Spinach believes that Sui may There will also be an ecological explosion, especially in the fields of finance, RWA, and DePIN.

First, let’s briefly review what is the reason for Sui’s surge this time? There are two main factors:

1. When holding the Move Ecological Conference, generally speaking, public chain conferences will most likely engage in a wave of "pulling". After all, you need to give everyone a boost to be more motivated. 😂
2. The Sui ecological project has opened up high subsidies, which is also the main factor for the rapid growth of TVL and cross-chain activities.

For example, the interest rates for depositing Sui and USDC on Navi Protocol @navi_protocol have exceeded 20%. The high subsidies have attracted a large amount of funds to come to collect wool, which has also resulted in a large number of Sui being locked in the protocol to earn interest, causing a certain The flywheel effect will continue to push up the price of Sui.

The outbreak of Sui has also attracted widespread attention in the market. In addition to Cetus, which has issued coins, the DeFi lending projects Navi Protocol @navi_protocol and Scallop Lend @Scallop_io, which have not yet issued coins, have become everyone’s focus. s project.

For these two projects, many people in the market have analyzed the mechanism design of the two projects, and according to TVL, Scallop is called Dragon One and Navi is called Dragon Two. However, in fact, if we analyze it from another perspective, Navi is in There will be more advantages in some aspects.

一.TVL

We can see on Defillma that Scollop's TVL is currently higher than Navi's. Many people also use this to judge which project is Longyi, but it is too simple to judge based on this.

Another indicator for evaluating a DeFi lending project is the amount of borrowing (Borrow) activity. If we include the borrowed money, Navi’s TVL will become the leading project in the Sui ecosystem, because the default view of Defillma is not Counting the amount of funds re-deposited after borrowing.

This logic is like comparing two banks. Bank A has more deposit reserves, while Bank B has less deposit reserves than Bank A, but Bank B has more loan business. The "credit" generated through credit in the Bank B system Currency" is higher than Bank A, although there is currently no "credit-derived currency" in the DeFi field.

But to put it simply, Navi is higher than Scallop in terms of lending activities and scale, and the profit of a Defi lending project mainly comes from lending activities, so Navi is better in terms of real lending business.

2. Profit rate

Another aspect is revenue expectations and future demand. Currently, when we enter the official websites of these two projects, we can find that Navi is higher than Scallop in terms of deposit subsidy revenue and TVL of each token. Counting Extra’s vSUI, Navi's return rate on SUI and USDC/USDT is about 5% to 13% higher than Scallop.

And Scallop currently does not support revolving loans, while Navi's interest rate difference between deposits and loans allows users to obtain higher returns through revolving loans. For example, you can earn 25.8% + 4.2% by depositing SUI and then borrow SUI with an interest rate of 13.51% to continue depositing. , and there is almost no risk of liquidation when borrowing local currency, so Navi’s return rate is currently higher than Scallop’s.

Regarding the future trend of SUI, what we currently know is that this high subsidy will last for one or two quarters, and since both projects have airdrop expectations, they will bring a lot of TVL data, and the data is good. , it’s easy to hype, you understand.

To sum up briefly, SUI’s current outbreak mainly comes from the lock-up positive flywheel caused by its high ecological subsidies and the holding of ecological conferences. From the perspective of the Move ecosystem, SUI’s TVL is already much higher than APTOS, but its market value is low. With APTOS, and the future data is getting better and better, there is more room for speculation. Currently, among the two leading DeFi projects above, Scallop is the leader in terms of TVL, but if you include the TVL of the loan amount and the volume of loan activities, Navi has more advantages and higher profits. Technically speaking, the Move language has higher advantages in financial scenarios. Coupled with the advantages of high performance, the RWA and DePIN fields of the Move ecosystem may also be worthy of attention.