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Sovryn, a project aiming to bring decentralized finance (DeFi) to Bitcoin, has surpassed $50 million in total value locked (TVL). According to data tracking site DeFi Llama, the non-custodial, smart contract-based system for bitcoin lending, borrowing, and margin trading has seen an uptick in its TVL from just under $45 mln at the end of May to just above $52 mln, as of June 10. With this, the project has joined the top 100 DeFi projects by TVL and is currently at 99th place. However, up until yesterday, the TVL was worth billions of dollars which sparked some arguments on Crypto Twitter (CT). TVL is a popular and dominant metric in the DeFi space, but many analysts argue its merit and that “a few whale users can create the illusion of activity.” It all started after Anthony Pompliano, a Bitcoin proponent and an investor in the project — Pomp Investments led the $9 million investment round of Sovryn in April, promoted the Sovryn team’s tweet about the project having a higher TVL, at $1.9 bln, than popular DEX Uniswap V3. He said,
“I keep telling everyone that DeFi infrastructure on Bitcoin is the most mispriced opportunity in the market.”This sparked a debate with Chainlink Community Ambassador, ChainLinkGod arguing,
“Staked governance tokens should not count as TVL for a lending protocol, no other protocol tracks their market's TVL like this, look at Aave and their safety module, seems quite misleading because that capital isn't available for borrowing.”In response, DeFi Llama removed the staking from Sovryn’s TVL and is issuing an update to the site that allows anyone to choose whether they want staking to be included or excluded on TVL to stay neutral on the matter. https://twitter.com/APompliano/status/1402714367473471499 Meanwhile, others argued that even if Sovryn did amass such capital, it wasn’t really an outlier as made to be believed as in the DeFi space there have been many projects that have accumulated TVL many times more than Soveryn’s in a much shorter period of time. Popular crypto Twitter personality CryptoCobain said,
“New protocols offer high yield for fast relative growth and same-cohort examples who launched at the same time have outpaced it by multiples. Of course, new things offering high APY grow quickly.” “TVL in the image of risk free yield farms is not really the same as risk-on protocol functionality / usage.”On Thursday, Sovryn announced that they had launched their token SOV on Uniswap to keep the “long-overdue conversation on the distorted way projects are reporting TVL” going. https://twitter.com/EdanYago/status/1403013163075969024 “DeFi for Bitcoin is finally here to offer a much needed alternative,” said the Sovryn team.