Level Protocol: A Comprehensive Data Analysis
@levelusd launched lvlUSD as a fully collateralized stablecoin backed by USDC and USDT, with reserves strategically deployed into established lending protocols like Aave and Morpho.
Level Protocol's fundamental premise was compelling: to create a stablecoin that generates a sustainable yield from real economic activity, rather than relying on token emissions. Users could stake lvlUSD into slvlUSD to capture returns from borrowing demand across integrated lending markets.
The protocol's design centers on delivering sustainable, low-risk yield from blue-chip DeFi lending protocols. Users can hold lvlUSD as a stable asset or stake it into slvlUSD to earn automated yield while maintaining composability across DeFi applications. And the same time, $2.4 million in cumulative yield has been distributed.
As of October 2025, Level Protocol had a total lvlUSD supply of $3.37 million with slvlUSD at $1.95 million, representing a combined $5.32 million in circulating tokens. The staking ratio sits at 0.5444, indicating that 54% of lvlUSD holders have chosen to stake their tokens into the yield-bearing slvlUSD variant.
The weekly supply chart traces the protocol's trajectory from its October 2024 launch through October 2025. Starting from near-zero, the supply peaked in May 2025 at approximately $184 million before declining to current levels.
This analysis examines on-chain data across Level Protocol's primary liquidity venues, Pendle, Curve, Morpho, and Spectra, tracking adoption patterns, liquidity distribution, and usage trends from launch through October 2025.
Access the Dashboard here: https://dune.com/0nchainlabs/level-lvlusd-dashboard
lvlUSD & slvlUSD Utilisation and Distribution
Examining the distribution across all venues reveals how Level Protocol's liquidity was allocated throughout the DeFi ecosystem.
At peak capacity in May-July 2025, Pendle held approximately $30 million, Curve held roughly $16 million across both pools, Morpho reached $10 million, and Spectra achieved $20,000. This accounts for approximately $46 million across the four tracked venues.
With a peak total supply of $184 million, the tracked venues represent roughly 26% of total protocol supply. The remaining 74% was probably distributed across direct holdings, other DeFi integrations, wallets, or applications not captured in this analysis.
Pendle: Principal Yield Tokenization
Pendle tokenizes yield-bearing assets, allowing users to split assets into ownership and yield components for separate trading. Level Protocol achieved significant traction on this platform, making it one of the protocol's largest liquidity venues.
The platform showed near-zero activity in April 2025, growing rapidly to approximately $30 million in total value locked by early July 2025. This $36 million peak represented the protocol's strongest single-venue performance across the entire ecosystem.
Current TVL stands at $816,704 as of October 2025.
The composition of assets on Pendle evolved notably over time. During the growth phase, slvlUSD dominated liquidity pools, reaching roughly $29 million, while lvlUSD held around $8 million.
By September 2025, this distribution shifted toward approximate parity.
Curve: Stablecoin Exchange Dynamics
Curve Finance operates as a decentralized exchange optimized for stablecoin swaps with minimal slippage. Level Protocol deployed two distinct pool types on Curve: lvlUSD/USDC and slvlUSD/lvlUSD, each serving different user preferences.
The lvlUSD/USDC pool currently holds $492,225 in TVL, while the slvlUSD/lvlUSD pool holds $185,538. This creates a 2.65x size ratio favoring the USDC-paired pool.
However, both pools grew steadily from April 2024 through July 2025, with the monthly TVL chart showing a consistent upward trajectory during this period.
The larger size of the lvlUSD/USDC pool probably demonstrates user preference for trading against established stablecoins rather than swapping between lvlUSD variants.
Morpho: Lending Market Performance
Level Protocol deployed two lending markets on Morpho: the M11C vault and the Steakhouse vault, each attracting different levels of user engagement.
The M11C vault currently holds $168,779 in TVL, representing 95% of total Morpho lvlUSD activity. The Steakhouse vault holds $1,852, accounting for the remaining 5%. This 20x difference in size indicates strong user preference for the M11C vault, likely due to earlier launch timing, greater visibility, or more attractive yield parameters, or it could be any factor really.
The M11C vault's activity timeline shows distinctive patterns. The vault experienced rapid growth to approximately $2 million in early June 2025. This was followed by significant volatility through July, with TVL declining to near-zero before partially recovering to current levels.
The Steakhouse vault experienced rapid growth to approximately $14 million in early June, launching after M11C, and has since flattened out to current levels.
Morpho's lending markets captured meaningful protocol usage, with the Steakhouse vault achieving eight-figure TVL during its peak performance period.
Spectra: Enhanced Yield Pools
Level Protocol's presence on Spectra represents the smallest of the four major venues analyzed, but provides insights into user behavior around higher-yield opportunities.
Current TVL on Spectra stands at $1,439. The pool's history shows it launched around July 20, 2025, experiencing rapid initial growth to approximately $20,000 by July 27, a 14x increase in the first week of operation.
This represented the fastest relative growth rate across any Level Protocol venue.
Interestingly, the pool's composition has consistently favored lvlUSD, which comprised roughly 60-70% of the pool during its peak and continues to dominate the current distribution.
Level Protocol Data Observations
The Level Protocol Dashboard was something that I had been working on for some months at @0nchainlab to capture the complete cycle of Level Protocols stablecoin and its utilisation. The subsequent months through October 2025 show the protocol operating at reduced but stable levels around $5 million in combined Supply.
Maybe that's due to the announcement that the Level team is getting acquired by a leading DeFi protocol and the team would be joining them, thereby sunsetting both the lvlUSD and slvlUSD.
