DeFi & L1L2 Weekly (09/11/2022)

FTX set to be acquired by Binance. Aave votes to deploy on zkSync v2 testnet. GALA crashed as pNetwork was misconfigured. Deribit halts withdrawals post-US$28M hot wallet hack.

Weekly DeFi Index

This week’s market cap, volume, and volatility indices were all positive at +4.39%, +33.21%, and +120.98%, respectively.

• In preparation for its mainnet release, Chainlink announced that its Early Access Eligibility App for Chainlink Staking v0.1 has been launched. Chainlink Staking v0.1 is part of a broader initiative around Chainlink Economics 2.0, and the staking pool will initially be capped at 25 million LINK tokens, with plans to scale up to 75 million LINK over time.

Project Spotlight

• Cronos ID announced the upcoming minting and public launch of 500 million Cronos ID native governance tokens, $CROID. This token will offer extended functional utility such as discounted prices for rare Cronos ID domain names. It also partnered with the Crypto DeFi Wallet, enabling users to send and receive tokens by using their (or their recipients’) human-readable Cronos ID “.cro” domains. 
• DeFi and NFT analytics platform DexCheck has integrated Cronos into its analytics platform, enabling the tracking of tokens, trades, or individual wallets. Check out the app on DexCheck.

News Highlight

• On Tuesday, FTX announced that the exchange will sell its non-U.S. business to Binance. This ‘strategic transaction’ was set in motion a day after FTX CEO Sam Bankman-Fried tweeted that the company and its assets were ‘fine’ (the tweet has since been deleted). 
• Matter Labs’ proposal to deploy Aave on the zkSync 2.0 testnet has been approved, following a unanimous vote by Aave community members. The vote marks the first stage of the decentralised lending protocol’s rollout to a zero-knowledge rollup.
• A suspicious address minted US$2 billion worth of GALA on the BNB Chain on 3 November. The newly printed GALA tokens were dumped to PancakeSwap and drained the BNB/GALA pool, earning approximately $4.5 million in the process. This was followed by GALA’s price dropping dramatically by 25.6%. Then, some arbitrageurs found the transactions and started buying GALA from PancakeSwap and selling the tokens on Huobi, causing a price crash from $0.04 to $0.0003 on the exchange. GALA Games confirmed that the cross-chain bridge it uses, pNetwork, initiated the minting to safeguard its liquidity pool from vulnerabilities.
• Banking giant JPMorgan executed its first live DeFi trade on a public blockchain as part of Monetary Authority of Singapore’s (MAS) Project Guardian initiative, which explores ways that financial institutions can leverage asset tokenisation and DeFi protocols. 
• U.S. dollar-pegged stablecoin Magic Internet Money (MIM) briefly dropped to nearly $0.95 on Tuesday due to the FTT token tanking. FTX’s native token FTT accounts for 33% of MIM’s underlying collateral, which saw a drop from $22 to $5 within 24 hours early this week.   
• Crypto exchange Deribit halted withdrawals after suffering from a security breach, with hackers taking away nearly $28 million. Deribit confirmed the attack has now been isolated and quarantined to its BTC, ETH, and USDC hot wallets, and developers have control of the exploit.

Recent Research Reports

Research Roundup Newsletter [October 2022] In this issue, we cover our recent Bloomberg Terminal integration, special research report for the Singapore Fintech Festival, and feature articles on NFT financialisation and utility.	NFT Financialisation and Utility: An Overview As NFT utility grows, so does the potential to make money from them. Financialisation could help to achieve greater liquidity for and unlock the value of NFTs.	NFT Utility: A Multifaceted Overview and Use Cases For NFTs to increase in value and be deemed viable economic and financial assets, they have to go beyond collectability and aesthetics. One way to tackle this is through utility.

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