DeFi & L1L2 Weekly (04/01/2023)

1inch’s new upgrade supports gas-free swap orders. SushiSwap proposes new tokenomics and will sunset its lending product. Debaub found a critical vulnerability in Uniswap’s smart contract.

Weekly DeFi Index

This week’s market cap, volume, and volatility indices were positive at +3.77%, +7.66%, and +82.54%, respectively.

• The rally of tokens like LDO and FXS that are from ETH liquid staking platforms may be driven by Ethereum’s upcoming Shanghai upgrade. Expected to happen in March 2023, the Shanghai upgrade will allow ETH withdrawals for tokens that have been staked in the Beacon Chain since December 2020.

News Highlight

• DEX aggregator 1inch released a protocol upgrade called Fusion, which can allegedly support users’ custom swap orders without gas fees.
• Liquid staking protocol Lido Finance overtook MakerDAO and became the highest TVL DeFi protocol. The spike of the protocol’s TVL benefits from Ethereum’s Merge in September 2022. Additionally, the availability of ETH withdrawals in Ethereum’s upcoming Shanghai upgrade also drove a surge in the TVL on liquid staking platforms and the value of their tokens.
• SushiSwap’s CEO Jared Grey proposed new SUSHI tokenomics in an attempt to revive the protocol amid a liquidity crunch. Under the new tokenomics model, SushiSwap will introduce token burn, time-locked tiers, and stop revenue sharing with non-liquidity providers.
• According to its CTO Matthew Lilley, Sushi will deprecate Kashi (Sushi Lending) and MISO (Sushi Launch Pad) because of low public interest and the significant effort that went into maintaining these two products. Sushi developers will focus more on the protocol’s DEX product.
• Security auditing firm Debaub found a critical vulnerability in Uniswap’s Universal Router smart contract that allowed third parties to steal funds during token transfers. No funds were stolen, and the bug was patched by the Uniswap team. Additionally, Debaub received a bug bounty of US$40,000 in USDC for the discovery.

Recent Research Reports

		
2022 Year Review & 2023 Year Ahead: 2022 has been a ride for the crypto industry. In this report, we curate the top ten crypto events and trends of 2022, followed by our outlook for 2023.	Decentralised Social Networks: An Overview: Decentralised social networks aim to enable participants to take back ownership of and better monetise their content and data. We explore the project landscape.	Social Graph and Digital Identity in Web3: Relationships and identities are key elements that make up social networks. In this report, we put a spotlight on the roles that decentralised social graphs and digital identity play in Web3 social.

Disclaimer

The information in this report is provided as general market commentary by Crypto.com and its affiliates, and does not constitute any financial, investment, legal, tax, or any other advice. This report is not intended to offer or recommend any access to products and/or services. While we endeavour to publish and maintain accurate information, we do not guarantee the accuracy, completeness, or usefulness of any information in this report nor do we adopt nor endorse, nor are we responsible for, the accuracy or reliability of any information submitted by other parties.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of, or located in a jurisdiction, where such distribution or use would be contrary to applicable law or that would subject Crypto.com and/or its affiliates to any registration or licensing requirement.

The brands and the logos appearing in this report are registered trademarks of their respective owners.

Author

Research and Insights Team

Get fresh market updates delivered straight to your inbox:

Be the first to hear about new insights: