In 2020, DeFi was considered one of the fastest-growing segments of the financial market. Therefore, updating and analyzing information related to DeFi is extremely important for investors. To support this, the DefiLlama tool was born. So what exactly is DefiLlama Chain in technical analysis? How to use DefiLlama? Read the following article by Crypto Trading to find the most accurate answer!
DefiLlama Tool Overview
DefiLlama was born in the context of the decentralized financial market developing rapidly. To better understand this special type of tool, let’s explore the information below.
What is DefiLlama in Crypto Trading?
DefiLlama in Crypto Trading is a website that visualizes information related to DeFi. Traders can track and grasp the most popular Blockchains. And also the DApps that are operating on those Blockchains. Including Ethereum (ETH), BNB Chain (BNB), and Solana (SOL)…
The decentralized nature of Blockchain networks makes it difficult for users to access and track On-chain activities or transactions in the DeFi market. Therefore, DefiLlama was born with many outstanding features to support users to get closer to DeFi more easily.
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Who should use the DefiLlama Chain?
DefiLlama was developed to serve investors in need. Anyone who wants to learn about protocols can use the Chain. Without spending much time or effort, all information on the DeFi market can be in the palm of the user’s hand. Because with it, you can check and compare all Blockchains in the same place. Besides, the data on the website is taken from public sources. So you can completely trust in transparency and accuracy.
How does DefiLlama work?
So how does the DefiLlama technical analysis tool work? It’s will scan over 80 Layer 1 Blockchains for publicly available data. It even tracks hundreds of data-containing applications, along with other projects, to find sources. It also partners with other data collectors to ensure that their information is as timely and accurate as possible.
In short, DefiLlama has access to permissionless Blockchain APIs, so whenever information on Blockchains is updated, the data is sent directly to the DefiLlama Chain website for users.
2 Outstanding Features
Possessing many outstanding features, what makes DefiLlama so popular today is:
Data Dashboard DefiLlama
Data Dashboard is the first feature that traders will see when accessing the Chain homepage. With an intuitive data dashboard, investors can easily identify, conduct technical analysis, and compare TVL indicators. In which, TVL is a certain amount of money deposited on Blockchains as collateral or LP Token.
Furthermore, the website homepage also displays the TVL table of Blockchains and DApps based on USD value. This data includes all transactions on DEX exchanges, insurance protocols, yield-generating protocols, other DeFi applications, etc. In particular, DefiLlama also allows traders to know whether the application is compatible with the Chain or not. Thereby, traders can determine the best DeFi exchange for the Chain without having to do individual research.
Crypto Trading DEX Meta-Aggregator Products
The second feature is DEX Meta-Aggregator – DefiLlama Chain’s new product. Meta-Aggregator is a tool that helps aggregate liquidity from many different sources. This tool has a mechanism to optimize slippage and transaction fees for users. Thereby, helping traders save and trade more conveniently on the DEX exchange.
Similar to other Aggregators, Meta-Aggregator DEX also aggregates from 8 liquidity sources. However, it aggregates data and liquidity from famous Aggregator platforms. Thereby increasing the ability to select and search for liquidity faster. Not only that, DefiLlama Meta-Aggregator also develops Private Mode to support traders by IP address security method. Ensuring the most optimal security for users on DeFi.
Analyzing the pros and cons of the DefiLlama tool
Most traders prefer to use it because of its outstanding features. However, it still has some disadvantages that need to be overcome. Specifically:
What are the advantages of using the DefiLlama Chain?
Some of the advantages of using the Chain in Crypto Trading are:
- This platform aggregates TVL from multiple ecosystems rather than a single blockchain, thereby increasing the diversity and accuracy of DeFi information.
- Offers traders investment opportunities to capture extremely potential cash flow trends.
Disadvantages of the technical analysis tool
Besides the benefits that the Chain can bring, it still has some disadvantages that traders need to consider when using it. That is, the website sometimes synthesizes TVL data slowly and is not 100% accurate. This can be overcome if traders know how to select and apply it in combination with the Wyckoff method.
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How to Use DefiLlama in Crypto Trading
So if you are new to the DeFi market, how should you use DefiLlama effectively? Using the Chain is a fairly simple process.
Just visit the website, you can see vertical tabs on the side of the screen. Here, you can navigate to specific Blockchains, Forks, or Oracles. Besides, traders can also look up data about NFT Tokens.
Several tabs allow traders to filter by liquidity rules, governance, or any other criteria thattheyu feelares appropriate. Once you click on a filter, you will be taken to a page that displays the TLV of that project as a chart. You will then have access to multiple tabs to filter further data.
Summary:
When people realize the true potential of Blockchain, DeFi becomes more popular than ever. Therefore, understanding and mastering the DefiLlama tool is an essential factor to help you be more successful on the path of investing in the DEX market. Hopefully, what Crypto Trading has shared above will help readers better understand this type of tool. To be able to update more related information, don’t forget to follow Crypto Trading’s Blog.
FAQs:
Is there a fee to open a DefiLlama account?
No, users do not need to open a Chain account but can access the website directly.
Is the data on DefiLlama accurate?
DefiLlama claims to get information from transparent sources but does not guarantee 100% accuracy. Therefore, traders must know how to filter and combine it with other technical analysis methods.
Where does DefiLlama website revenue come from?
DefiLlama is a non-profit operation and earns income from user donations. In addition, the platform also has income from affiliate marketing activities for other Crypto projects. Including MarkerDAO, Lido, dYdX, GMX, NEX…
