Another year in the books. This is the fifth year-end look at the top DeFi memes and charts from us at Dose of DeFi (take a look at what was in vogue in 2020, 2021, 2022 and 2023 DeFi). Memes and charts are information units of DeFi and crypto; they capture the vibes and market activity of the years in digestible nuggets.
2024 was a year where growth and success just weren’t fast or big enough. We’ve built infrastructure, products, grown TVL and even had number go up, so where’s the mainstream impact to silence the haters? It’s already there if you squint when it comes to stablecoins, prediction markets, and non-sovereign money. From here, it then becomes a question of adoption speed and the emergence of some new version of Moore’s law relating to financial activity moving onto blockchains.
DeFi is almost ready to scale to a billion users. The chain is almost fast enough. Transactions are almost cheap enough. And we almost have enough regulatory clarity to onboard institutional and retail investors. It all feels tantalizingly close, because we can see the progress: from the depths of the bear market in 2022, and from the euphoria postDeFi Summer in 2020. At both points,this DeFi thing already felt like the future (to us).
Anyway, without further ado, let’s get to the top-five memes and top-five charts of 2024:
Top-five memes of 2024
1. Bitcoin
What a year for Bitcoin, starting in January with Bitcoin ETFs, all the way through the election and past $100k. To say ‘Bitcoin has arrived’ is a bit clichéd, but there is a new level of mainstream acceptance as a macro asset that doesn’t feel like it’s going away. Bitcoin, in the words of Fed Chair Jay Powell, is “just like gold, only digital”, which makes it the ultimate meme coin.
The Bitcoin community has also largely abandoned the Bitcoin blockchain, solidifying around the meme of a fixed supply of BTC the asset. Last year and early this year, there was talk of Bitcoin Season 2, a route for stablecoins and DeFi apps to finally come to Bitcoin via L2s. Progress so far has been minimal, and most bitcoiners are instead talking about BTC the asset in a US Strategic Reserve. Maybe the scare from Google’s Willow quantum computing chip will rekindle interest in the underlying blockchain, but it’s hard to argue with the product-market-fit of Bitcoin – especially after its stellar 2024 and its seemingly inevitable path towards digital gold and non-sovereign money.
Bitcoin going up is undoubtedly good for the rest of crypto. Whether or not alt season takes off, the overall mood towards crypto experimentation in TradFi is much brighter when Bitcoin shines. At an individual level, after holding BTC for a while and it going up, the desire is to try more. And DeFi-enabled products are adjacent-possible for the crypto curious.
Reflect: After twelve years of writing about bitcoin, here's how my thinking has changed [JP Koning/Moneyness]
2. Crypto politicians
This was also the year that crypto truly arrived in American politics, with an extremely successful 2024 campaign season up and down the ballot for crypto candidates. There’s Trump at the top, who has wrapped himself in crypto from NFTs to DeFi forks, and of course with his speech in Nashville at the Bitcoin Conference, where he called for the US to become the “crypto capital of the planet”. And since the election, things continue to look up for crypto in Washington. Even this week, with the apparent cancellation of an anti-crypto Democratic SEC commissioner in the lame-duck session.
It’s hard to describe just how big of a turnaround this has been from a year ago, or even six months ago. Back then, the SEC was actively suing Coinbase and sending wells notices to every DeFi project it could get a US address for.
As we approach year-end, Jake Chervinsky of Variant is calling for the crypto industry to rethink their legislative preferences, now that it is negotiating from a position of strength. We’ve been overly optimistic that crypto legislation would get done but Republicans are eager to accomplish something that doesn’t cost any money and some Democrats will be eager to express bipartisan bonafides.
What could this mean for DeFi? Check out DeFi splits in two for our take or check out CoinCenter’s 2025 Top policy priorities for 2025.
3. Parasitic L2s
The success of the ‘Parasitic L2s’ meme demonstrates the power of the meme. It doesn’t really matter if it’s true or not, because the message is clear. In response, the L2s have wrapped themselves in the Ethereum flag, espousing their allegiances. This social layer is an underrated market enforcement mechanism for decentralization on Ethereum, but the bigger uncertainty is on the future Ethereum roadmap. Solana’s success has shaken many in the community and questioned Ethereum’s commitment to a rollup-centric roadmap. Many claim that L2s are earning fees that should go to ETH holders, while the Ethereum L1 is abandoning its core use case (DeFi) to support L2 development.
Echoes of this conversation have dominated the discourse for why ETH has trailed BTC and SOL over the last twelve months. L2s are parasitic, while the shared state of Solana makes it easy for builders to launch their app without conducting a market research study on which Ethereum L2 to pick.
Parasitic L2s were one of many critiques hurled at Ethereum this year from an eclectic class of folks who have either migrated to Solana (Max) or who straddle multiple communities (Jon Charbonneau of DBA). These critiques have had three effects so far. First they’ve provoked an autoimmune response from some old Ethereum community members who are pushing back with the Ethereum concernoooorrrrs meme. Second, L2s are draping themselves in the flag of Ethereum. And lastly, core devs have “publicly voiced support for scaling the L1” in the last month.
So the memes (and the criticism) work?
Explore more: Abstract away! The race towards interoperability [Dose of DeFi]
4. Trading memes power Solana’s rise
During a gold rush, sell shovels (so the saying goes). And it certainly rings true for Pump.fun, the first and leading meme coin launch platform, as it has generated $180 million in revenue since its launch in March. The numbers involved are a sign of the times, with the top-three tokens launched on the platform boasting impressive market capitalizations: $1.2 billion for Peanut the Squirrel, $800 million for Goatseus Maximus, and $640 million for a third token (whose name we will not disclose here).
We see the irony in one of the year's top memes being about trading memes. Regardless, this does tell a bigger story about the rise of Solana, which has been the center of the memecoin frenzy that has driven usage metrics that surpass Ethereum. Solana has arrived in its own way in 2024, commanding enough of the market that it’s presenting growth opportunities for Ethereum DeFi projects. For example, in November, Sky launched its new USDS stablecoin on Solana and one wonders when Aave will follow (although rewriting a codebase is a bit harder than minting some tokens). Solana is also carving its own path and approach to MEV that still needs work, but luckily, Ethereum exile Max Resnick is taking his talents to Solana to help. At the moment, Solana’s ecosystem is generating more MEV. This may be because there’s more fat, yet the sizable opportunity ultimately means more people are willing to fire up Solana bots to play in the game, bringing more liquidity to the system overall. Jito has been a massive success and arguably the second most important MEV project after Flashbots.
Back to the memes and their trading. We aren’t very nihilistic here at Dose, nor are we judgmental, so we’ll keep our comments brief. Crypto financializes everything. The ability to create and distribute a token is probably crypto’s biggest unlock; it will just be used in a multitude of different ways. But yeah, maybe don’t buy or sell memecoins?
Explore MEV on Solana more with Solana’s fee-market fork in the road from April in Dose of DeFi
5. ASS (Application-specific sequencing)
Application Specific Sequencing (ASS) is a deliberate provocation. Its creators are using meme warfare to try and manifest into existence an idea around MEV architecture. And it’s largely worked? Well, for an admittedly small audience (MEV researchers). Atlas and Sorella Labs are leading the meme charge. Both have products built around the idea that applications can dictate the economic distribution of its MEV supply chain. This gives them the ability to minimize MEV for users, but also determine who can extract and how.
Building ASS applications is challenging because any attempt to bypass validators — and thus cut them out of the value chain — risks censorship from those same validators (or really, builders). In essence, today’s blockchains aren’t censorship-resistant enough to fully support ASS architectures within their existing frameworks. That’s why projects seeking to control their sequencing have resorted to launching new chains or L2s, just as Uniswap did this year. Still, new proposals like Braid, Focil, Monad, and SUAVE show promise in making ASS deployments feasible. Meanwhile, Flashbots continues pushing MEV research forward, championing its own vital meme: TEEs
Overall, it was a bit of a down year for MEV meme-wise, after dominating the dialogue over the past few years and arguably still “THE problem to solve in crypto”.
A deeper look: Order flow auctions’ bumpy road to credibility
Top Charts of 2024
Note: charts are interactive online!
1. The return of high yields
Yield is the lifeblood of DeFi. Double digit returns have always been the reason for major inflows. 2023 was a particularly tough year for DeFi yields because regular bank savings rates were higher than stablecoin DeFi deposit rates. That changed in 2024 as the market roared. This time the double-digit yield was not from random governance tokens, but from someone on the other side paying interest. We are seeing billions of dollars of borrowing at 15%+ returns all across DeFi the last month.
Why? Ethena's USDe is capturing the yield offered by the basis trade on centralized exchanges, where bullish crypto investors are willing to go long BTC & ETH even with high interest on their margin loans. This can generate 20%+ APY staking USDe for extra bullish times, which is why its market cap has exploded to almost $6bn from nothing a year ago. The yield from staking USDe (sUSDe) is lifting rates across DeFi as it represents pretty good collateral (backed simultaneously by a long and short position in ETH or BTC) to borrow against. So, smart investors have looped their sUSDe to borrow USDC, USDT or another stablecoin and then purchase USDe and stake and repeat. It makes sense to keep looping as long as the borrow rate is below the yield you can get from staking USDe. In reality, the only thing stopping more looping is because the sUSDe supply caps have been hit on Aave, Pendle and elsewhere.
Ethena's success is one of the biggest stories of the year and one wonders how many more eye balls come to DeFi if deposit rates stay double digit for much longer.
2. Stablecoins
Stablecoins have become massive crypto businesses. There’s roughly $200b in total industry market cap backed by primarily dollar assets earning an average of 4%+ yield. That’s almost $10b in interest that’s being earned by companies or distributed to DeFi investors via tokenized yield.
Tether is an amazingly efficient company, with less than 200 employees and annualized revenue of $6b+. It’s almost double its 2022 market high in circulating supply. USDC, meanwhile, is growing but no longer seems in the same league as Tether. There is pretty clear movement away from USDC towards Tether after the Silicon Valley Bank collapse in March 2023. Sky* has remained relevant but has not taken off. Its rebrand to Sky & USDS is targeted at mass retail but they haven’t gotten there yet. USDe from Ethena is not really a stablecoin (synthetic dollar is what they prefer), but its size ($6b) and much higher yield opportunities mean its going to be relevant to the stablecoin conversation regardless of what you call it.
3. Lending market share
Lending has always been DeFi’s most interesting and competitive market. Assets borrowed in DeFi have grown from $7.6b a year ago to over $22bn. The chart above shows the market share of the total amount borrowed in DeFi (a harder metric to game than TVL) with lots of changes from a year ago.
For starters, Compound and Spark/MakerDAO/Sky saw their market share decline precipitously. For Sky, this was not such a bad thing as the decrease in total amount borrowed reflects a transition to RWAs, which have better margins and are more consistent. Compound, meanwhile, bled assets as it continued to suffer from a vacuum of leadership. Morpho now has more assets borrowed than Compound, marking a huge shift in the lending market towards a modular world. Fluid, from DeFi OG InstaDapp, also burst onto the scene in 2024. And then there’s Aave, which started the year with a public split with Gauntlet to go along with tussles with Morpho, Ethena and Polygon (okay maybe it’s just Marc), but despite all of that, assets borrowed on Aave has outpaced the rest of the industry and gives Aave the most lending market share since MakerDAO in 2020. What’s more, their token price has also been on a tear, leading all DeFi tokens with a 300% return in 2024. But will their success continue or is the growth of Morpho an indicator that future growth will be in modular systems?
As we said, lending is the most interesting and competitive DeFi market
4. Private order flow %
The public mempool is not dead yet, but there has been a consistent shift away from it as users look for MEV protection from private mempools. Using the public mempool for a trade transaction is simply worse execution than sending it to a dedicated network of solvers who promise to return most of the value they could extract if they traded against you. We started the year where 10% of transactions were private and that shifted up to 30% because Metamask rolled out “Smart Transactions” to combat “frontrunning”.
MEV has been pushing transaction sequencing outside of Ethereum for several years and it looks like that is set to continue as wallets, users and applications become more MEV aware. Are more private transactions bad for Ethereum? It’s unclear but it surely changes the market structure and centralization risks.
5. Polymarket
Polymarket was such a huge story for crypto this year. Its penetration into the cultural zeitgeist makes it three successful use-cases for crypto: non-sovereign digital money, stablecoins and prediction markets. This will make skeptics more open to other crypto products and also be a funnel into other crypto products from Polymarket users.
The Election put Polymarket on the map, but will it have staying power the four years in between elections? The chart above is encouraging, showing Polymarket with over $1bn in non-election bets in December so far, double what it saw in August & September.
That’s it! Feedback appreciated. Just hit reply. I enjoyed writing this as a reflection on the year. Hope everyone has a lovely holiday season.
Dose of DeFi is written by Chris Powers, with help from Denis Suslov and Financial Content Lab. *I spend most of my time contributing to Powerhouse, an ecosystem actor for MakerDAO/Sky. Some of my compensation comes from MKR, so I’m financially incentivized for its success. All content is for informational purposes and is not intended as investment advice.
