DeFi & L1L2 Weekly (26/10/2022)

Aave released a technical paper of its upcoming GHO stablecoin and first audit findings. MakerDAO voted in favour of founder’s ‘Endgame Plan’. NEAR Foundation to shut down USN stablecoin.

Weekly DeFi Index

This week’s market cap index was positive at +1.30%, while volume and volatility indices were negative at  -11.19% and -4.91%, respectively.

Check the latest prices on Crypto.com/Price

DeFi Index Tokens

News Highlight

• Decentralised lending protocol Aave released a technical paper on its upcoming GHO stablecoin, along with the results of its first security audit conducted by security firm Open Zeppelin. GHO was proposed and passed in July this year, with 99.9% of community votes in favour of launching the coin. The code audit found two medium-severity bugs in the codebase; however, there were no critical or high-severity bugs found. 
• MakerDAO votes in favour of founder Rune Christensen’s ‘Endgame Plan’, one designed in the hopes of improving protocol governance mechanisms and making it more decentralised. It involves restructuring the DAO into smaller teams dubbed MetaDAOs, where each will have its own governing token and aligned mission.
• NEAR Foundation will shut down its USN stablecoin, an update that comes after the network suffered a US$40 million ‘collateral gap’. In light of this event, it also launched the USN Protection Programme to support the digital asset’s wind-down and fully cover this collateral gap, ensuring eligible USN holders can redeem their USN on a 1:1 basis with USDT.
• Polygon-based decentralised exchange QuickSwap recently announced plans to close its lending platform following a flash loan exploit. The attack took place on the Market XYZ lending market, and over $220,000 worth of tokens were reportedly stolen. QuickSwap confirmed that the hacker has returned the stolen funds and that the vulnerability exploit did not affect its smart contract.

DEX Protocols Metrics

Lending Protocols Metrics

Charts on Layer-2 Projects

• The overall L2 market remained at the same level last week, as its TVL rose slightly by +0.41%. Optimistic rollup and zero-knowledge rollup projects jumped +0.79% and +1.21%, respectively. Ethereum’s TVL change was positive at +4.23%.

• The TVL changes for all optimistic rollup projects were all slightly positive except for Metis Andromeda (-0.86%). Optimism surged the most at +0.87%.

• ZK rollup projects’ TVL movement was a mixed bag: StarkNet saw the highest growth at +34.20%, while Loopring plummeted the most at -2.57%.

Further Reading

• zkSync rolls out critical testnet integration for its validity proofs ahead of mainnet
• Circle partners with Axelar on cross-chain initiative for USDC
• Umee: Mainnet upgrade to unlock the full potential of the Cosmos ecosystem
• Q3 update: Bitcoin mining now consumes 0.16% of the global energy production
• An unknown miner commands more than 51% of BSV’s hashpower, consecutive strings of empty blocks makes chain unreliable
• Ankr becomes one of the first RPC providers to the Aptos blockchain
• Flashbots has a new plan: ‘Make TradFi look embarrassing’

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Research and Insights Team

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