How to find the next 100x coin using TVL trading volume? Three key strategies for DeFi data mining

On-chain data is real-time, transparent, and immutable. TVL measures the total value locked but is easily affected by token prices, so it should be combined with USD net inflow. Trading volume tracks DEX and perpetual contract activity; changes in market share are more important than absolute values. Open interest indicates liquidity. Fees are paid by users, and revenue stays with the protocol. Three steps: focus on sustained growth, track stock and flow, consider token unlocks.

Why is DeFi data more reliable than traditional financial reports?

On-chain data not only signifies a breakthrough in evaluating crypto assets but also represents a revolution in the entire financial data field. Imagine how traditional investors evaluate companies: they need to wait for quarterly financial reports, and some even suggest changing the reporting frequency from quarterly to semi-annual. In contrast, financial data of DeFi protocols is available in real-time; sites like DefiLlama update relevant data daily or even hourly.

This is undoubtedly a revolutionary breakthrough in transparency. When you buy stock in a listed company, you rely on financial data published after audits, which often have delays of weeks or even months. When evaluating a DeFi protocol, you directly read transaction records on an immutable ledger in real-time. Accountants may falsify data, but blockchain does not lie.

Of course, not every crypto project has fundamental data worth tracking. For example, many meme coins or projects with only a whitepaper and a Telegram group are “air projects” with little substance, making fundamental analysis less useful. But for protocols that generate fees, accumulate deposits, and distribute value to token holders, their operations leave data traces that can be tracked and analyzed, often providing early signals before market narratives form.

For instance, Polymarket’s liquidity has been growing for years, and this trend started before prediction markets became a hot topic. The explosive price growth of HYPE tokens last summer was driven by its sustained high revenue performance. These indicators have long hinted at future directions—you just need to know where to look.

DeFi Core Indicator Quick Reference

TVL (Total Value Locked): Total assets deposited in protocols, shows user trust but is sensitive to token price fluctuations

Trading Volume: Activity on DEX and perpetual contracts; market share changes are more important than absolute volume

Open Interest: Total value of active positions on derivatives platforms; speed of recovery after liquidations reflects attractiveness

Stablecoin Market Cap: On-chain total stablecoin supply, measures real capital inflow unaffected by token prices

Fees and Revenue: Total paid by users vs. protocol retained; income for token holders indicates the protocol’s ability to capture value

Three-Step Analysis Method: From Data to Investment Decisions

Step one: prioritize sustained, stable growth. Protocols with short-term spikes in revenue charts that quickly collapse do not reflect sustainable value creation. What truly matters is steady growth over a longer period. For example, if a protocol’s monthly revenue gradually increases from $500K to $2M over six months, that indicates sustainable growth. Conversely, if revenue suddenly spikes to $5M in one week but then drops back to $300K, it’s likely a transient anomaly.

In crypto, time moves much faster than in traditional markets. One month of continuous growth in crypto roughly equals a quarter in traditional markets. If a protocol’s revenue grows steadily over six months, it can be considered akin to a company with six consecutive quarters of revenue growth. That performance is worth noting.

Step two: track both stock and flow indicators. Stock indicators like TVL, open interest, and stablecoin market cap tell you how much capital is deposited. Flow indicators like fees, revenue, and trading volume show actual activity levels. Both are equally important.

Activity volume is easier to manipulate. For example, protocols can incentivize or artificially inflate trading volume through rewards or wash trading. Liquidity, however, is harder to fake. Genuine user deposits and long-term retention require real utility. When evaluating any protocol, analyze at least one stock indicator and one flow indicator. If both show growth, the protocol is genuinely expanding. If only activity volume grows while liquidity stagnates, deeper analysis is needed—there may be manipulation.

Step three: consider token unlocks and incentive measures. Token unlocks can create selling pressure; weekly released tokens are often sold. Without other demand sources to offset this selling, token prices tend to decline. Before investing, check the token’s unlock schedule. A protocol with 90% circulating supply has minimal future dilution risk. Conversely, a protocol with only 20% circulating supply and large unlocks in three months faces higher risk.

Similarly, a high-revenue protocol that distributes more tokens as incentives than it earns from users may have less impressive revenue figures. DefiLlama tracks this via the “Yield” metric, which deducts incentive costs from revenue. While incentives are effective for early growth, they do create selling pressure that must be offset by other demand.

Overall, mastering core DeFi data like TVL, trading volume, open interest, combined with the three-step analysis, helps you identify potential projects before market narratives emerge. Data doesn’t lie, but it must be interpreted correctly.