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Big Data Protocol Amasses 10% of DeFi TVL Over the Weekend

Big Data Protocol wasn’t even live a week ago. Now it sits third in terms of total value locked, ahead of DeFi mainstays Compound Finance and Uniswap, according to data compiled by DeBank. 

With over $6B locked up since rewards emissions began on Saturday, the project has DeFi watchers wondering how it rocketed from nowhere to unseat major DeFi players in the fight to attract liquidity.

The Rewards

The basic reason for the meteoric jump in TVL was the 1,000% plus APYs on 11 of the 12 tokens available to stakers on the first day of the six-day liquidity mining program. The yield’s source is Big Data Protocol’s token, BDP. 30% of BDP’s total supply will be distributed equally to the 12 asset pools during its six-day rewards program. 

The rewards have cooled by the time of writing as more participants have joined, with many of 12 tokens in the program, like WBTC, USDT, and WETH now reporting yields below the triple-digits.

Alongside rewards, the price of the BDP token has halved to $3.14 from its launch price of $6.5 as stakers are immediately selling their rewards upon receiving them.

Concentrated Wealth

The wealth of the 705 staking participants is concentrated at the top with over 56% of the protocol’s TVL attributed to two wallets and over 90% concentrated among the top 50 at the time of writing.

According to Igor Igamberdiev, Research Analyst at The Block, the top wallet, with over $1.6B staked, belongs to Tron founder Justin Son, and the second wallet, with $769M belongs to cryptocurrency trading firm, Alameda Research, led by Sam Bankman Fried. 

Notably, three of the top five wallets in terms of locked value in Big Data Protocol hold less than $1 of BDP, meaning that the wallets’ controller either moved the tokens elsewhere or sold them.

Exit Liquidity

Julian Koh of Ribbon Finance thinks it’s the latter, telling The Defiant, “the top whales are farming with billions of dollars and dumping immediately and the people who put money in the incentivized LP pool get rekt.”

The incentivized LP (liquidity provider) is the second pool in Big Data Protocol’s liquidity mining program which rewards users with a second token, bALPHA, for providing liquidity on BDP/ETH or bALPHA/ETH pairs.

These users are exposing themselves to impermanent loss at the hands of the stakers in the first set of pools. “They’re essentially providing exit liquidity for whales,” Koh commented.

The bALPHA token, according to the protocol’s launch post, will be used to access what the project calls “commercially valuable” data. 

The token’s value has dropped by 80% to $5,109 from its opening price of $25,188. 

The BDP token will be, according to the yield farming release post, “burned as usage of the Protocol and marketplace grows over time.”

The Use Case

The eye-popping APYs have some crypto “apes” taking a “shut up and take my money” attitude. Others, like Yearn Finance’s banteg, are taking pause. 

“Why is there $3B in a contract that launched a day ago?” he tweeted Saturday.

Big Data Protocol’s launch post states that it has access to “14,141 professional data providers” which it will connect to its data consumers, by way of Amass Insights, which it describes as “the industry’s largest alternative data marketplace.” 

The protocol aims to tokenize the data from Amass Insights data providers. If a user has a bALPHA token and is willing to burn it, they will be able to access a “data basket” and its underlying data sets.

Subsequent data tokens bBETA, and bGAMMA, are forthcoming and will be used to further incentivize liquidity.

Ocean Association

Big Data Protocol has released a slew of partnership announcements, including one with on-chain analytics company Glassnode as a data provider. 

Big Data Protocol’s Data Market is an amicable fork of Ocean Protocol. This means that, according to a Big Data Protocol post announcing the strategic partnership, that the protocol’s data providers will be able upload their tokenized data with the full functionality of the Ocean Market

This functionality includes the capability that tokenized data can be cross-listed across the two protocol’s marketplaces. It also means that the Ocean community will receive a percentage of the fees generated on Big Data Protocol’s Data Market.  

Big Data Protocol’s Data Market is scheduled to go live in April. With billions locked in the project some will be wondering whether the data marketplace is the next big thing in the space or one more yield farming scheme that dries up once the APYs are gone.