[CHAINRISK] weETH Market Evaluation
Excited to see this proposal. Here’s a market analysis of the weETH asset by Chainrisk to provide transparent insights into potential upsides for listing it on Compound.
Market Data
All data given below are as of 11th December 2024
Market Cap: $6.96B
At $6.96 billion, the market cap indicates a moderate level of investor interest and market presence for weETH.
24h Volume: $8.81M
The 24-hour trading volume of $8.81 million suggests healthy trading activity, indicating that weETH is actively traded among investors.
Circulating Supply: 1,783,632 weETH
The circulating supply of 1,783,632 weETH tokens reflects the total number of tokens currently available for trading, calculated as the total coins created minus any coins that have been burned.
Fully Diluted Value: $6.97 B
The FDV of $6.97 billion provides insight into the potential future valuation of weETH if all tokens were to be issued.
Current Rankings
- CoinMarketCap: 6
Volatility Analysis
Asset Volatility
Liquid Staking Basis (LSB)
This rank is for rehypothecated crypto (e.g. staked, restaked, or wrapped).
The LSB represents the price difference between weETH (liquid staking token) and its underlying asset, ETH. It measures the deviation of the weETH price from the ETH price.
weETH is a value-accrual type LSD token and therefore can be expected to have a constant increase in LSB value. The chart below shows the constantly increasing trend (linear) of the weETH LSB value over time:
Closeness to Underlying (c2u)
The descriptive statistics for the ‘Closeness to Underlying’ (c2u) between weETH and ETH indicate that weETH generally trades at a slight premium to ETH.
Trading Volume to Market Capitalization Ratio
It is an indicator of liquidity. A trading volume-to-market capitalization ratio of 0.1265% indicates a low level of liquidity, making it a bit difficult to buy or sell the cryptocurrency close to its true value on exchanges.
Historical Performance
The historical price data includes:
Historical Price:
Historical Market Cap:
Liquidity Analysis
Token On-Chain Liquidity
The three most liquid pools are the Uniswap Pool with $57.15M, followed by Balancer with 16.69M and then Curve pools with $474.30K in TVL.
Slippage
The DefiLlama slippage estimator (Token Liquidity) tool shows that a weETH-> USDC trade of $3.8M (10000 weETH) over KyberSwap will produce 0.60% trade slippage in weETH.
Supported CEXes & DEXes
CEXes: The weETH Token is currently not listed on any centralized exchanges.
DEXes: The weETH token is actively traded across a few of decentralized exchanges (DEX), including Curve, Uniswap and Balancer.
Markets on decentralized exchanges:
Projected Revenue Estimate:
Current Market Position
Morpho:
weETH has established itself as a collateral asset on Morpho, facilitating the borrowing of WETH. The current supply of weETH stands at $10.87 million, with a borrowing volume of approximately $10.00 million. The annual percentage yield (APY) for borrowing is 1.94%, reflecting a competitive rate in the decentralized finance (DeFi) landscape. Historically, total borrowing reached around $10.32 million, indicating robust demand and utilization metrics.
Aave:
weETH has established itself as a collateral asset on Morpho, facilitating the borrowing of WETH. The current supply of weETH stands at $4.47 billion, with a borrowing volume of approximately $13.30 million. The annual percentage yield (APY) for borrowing is 1.08%.
Calculation Methodology
Revenue from lending protocols can be estimated using the formula:
Estimated Revenue = Total Borrow × APY
Assuming an average total borrow of $12 million worth of weETH and an APY of 2%, the projected annual revenue would be calculated as follows:
Estimated Revenue = 12,000,000×0.02 = $240,000
To further understand how varying borrowing levels and APYs could impact revenue projections, a sensitivity analysis can be conducted:
If the community shows sufficient interest, we’re happy to share our recommendations for the asset.