How to answer this Technical interview question about Performance Metrics for Mid-Level DeFi Analyst?

What metrics do you track to assess the performance of DeFi protocols?

DeFi Analyst

Technical

Asked at

Aave

Difficulty :

Medium

Explanation

This question evaluates your understanding of key performance indicators (KPIs) in the DeFi space and your ability to interpret them to assess protocol health and performance. Recruiters are looking for candidates who can use metrics to provide actionable insights. A strong answer will include specific metrics, their relevance, and examples of their application. Avoid generic responses or failing to tie metrics to decision-making.

Answer Example

I track metrics like Total Value Locked (TVL), trading volume, user growth, and yield rates to assess the performance of DeFi protocols. For example, while analyzing a lending platform, I noticed a consistent increase in TVL and declining default rates, indicating strong user trust and protocol health. I also monitor on-chain activity using tools like Dune Analytics and DeFi Pulse. These metrics help identify trends, measure user engagement, and ensure the protocol’s sustainability over time.

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