Weekly DeFi Index

This week, the price index decreased by -9.66%, while the volume and volatility indices grew by +4.34% and +91.34%, respectively.

Chart of the Week

Ethereum is experiencing record transaction volumes and reduced fees, driven by its modular scaling architecture and stable staking conditions.

Ethereum transaction volume soared to a peak of over 2.8 million on 16 January. Concurrently, the median transaction fees decreased to the $0.01–$0.02 range, a reduction largely attributable to the Dencun and subsequent upgrades which improved Layer-2 data posting efficiency. Token transfers dominated Ethereum transaction types with over 75% share, and stablecoins like USDT and USDC were the most frequently transacted tokens.

News Highlights

• Pendle will replace its under-adopted governance token vePENDLE due to long locks and complexity. The new liquid token, sPENDLE, will feature a 14-day withdrawal or instant option with a fee. This simplifies participation and integrates with DeFi and restaking. Revenue will be used for PENDLE buybacks.
• Injective’s community approved governance proposal IIP-617 to accelerate INJ token supply reduction via updated issuance and continued buyback-and-burn, with 6.85 million INJ already removed. Changes are live, positioning INJ as highly deflationary.
• Felix Protocol partnered with Ondo Finance to introduce spot equity trading to the Hyperliquid ecosystem, starting with over 100 US stocks and expanding to 1,000+ equities in the coming months.
• Vitalik Buterin called for new DAO designs beyond token-voting models, criticising inefficiency, capture risks, low turnout, and privacy issues. He advocates specialised concave/convex governance, privacy tools like zero-knowledge proofs, AI delegation, and to treat DAO design as core infrastructure for oracles and dispute resolution.
• Sui blockchain recovered from a six-hour network outage on 14 January which halted transactions and restricted over $1 billion in value. The cause remains undisclosed.
• Ethereum DeFi platform Makina Finance suffered a flash loan exploit, losing 1,299 ETH (around $4 million) via manipulation of the DUSD-DUSDC pool on Curve using borrowed USDC. The impact was limited to certain liquidity provider positions, and platform activated security mode and advised withdrawals while the incident was assessed.

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