DeFi & L1L2 Weekly (06/12/2023)

Crypto.com secures approval as an Electronic Money Institution in the UK. DeFi market rebounds as TVL surpasses US$50B. Uniswap partners with Talos to bring institutional access to DeFi.

Weekly DeFi Index

This week’s market cap and volume indices were positive at +5.92% and +3.34%, respectively, while the volatility index was negative at -29.50%.

Chart of the Week

The total value locked (TVL) in decentralised finance (DeFi) has surged to US$50 billion, marking a $15 billion increase in six weeks. Growth was fueled by a rise in asset prices and the expansion of various ecosystems. Notably, the newly-launched Layer-2 platform Blast saw over $700 million in deposits.

News Highlights

• Crypto.com received authorisation as an Electronic Money Institution (EMI) from the United Kingdom’s Financial Conduct Authority (FCA). This new license allows Crypto.com to broaden its product offerings in the UK.
• Uniswap has partnered with institutional investing technology firm Talos to bring DeFi liquidity to institutional traders. Supported by Fireblocks, Uniswap Labs will be providing its trading APIs to Talos clients in a familiar Talos order book format.
• Mantle has released Mantle LSP, a liquid staking protocol and the second core product in its ecosystem. Mantle LSP allows users to stake their ETH on the Mantle Network and receive mETH tokens, which can be used to earn yield. 
• Cosmos-based networks Umee (a decentralised lending protocol) and Osmosis (a decentralised exchange) plan to merge and create a DeFi Hub for the Cosmos ecosystem. Through a software upgrade, the Umee UX Chain code will be implemented on Osmosis, combining the two networks and enabling advanced features in the exchange. 
• Decentralised exchanges Velodrome and Aerodrome warned users that their websites were compromised in a similar DNS attack for the second time in days. Both teams shared identical messages on X (formerly Twitter), stating that their provider had been exploited again and access to those websites had been restored after a few hours.
• KyberSwap has announced a grant initiative from its treasury to offer compensation to users affected by a significant exploit on 22 November, which led to a $48.8 million loss for the DeFi protocol. The grant will offer affected users the USD equivalent of the assets they lost in the security breach.
• Real-world lending project Florence Finance suffered a phishing attack, losing $1.45 million in USDC. The attack involved a phishing technique called ‘address poisoning’, where a malicious wallet address closely resembles a legitimate one, tricking users into transferring funds to the wrong address.

Recent Research Reports

• Research Roundup Newsletter [October 2023]: We present to you our latest issue of Research Roundup, featuring trending market insights in October, charts of the month, and our insights on friend.tech and SocialFi trends.
• Friend.Tech: Explore what friend.tech is, its success factors and criticisms, and some of the competing platforms that have emerged.
• Alpha Navigator: Quest for Alpha [October 2023]: US Federal Reserve holds steady on interest rates. BTC starts 4Q strong, outperforming other asset classes.

Recent University Articles

• Data Tokenisation: What It Is and Why It Matters for Crypto: Learn all about data tokenisation, how it works on the blockchain, and its application in crypto and other industries.
• Bitcoin Spot vs Futures ETFs Explained: Learn the difference between BTC spot vs futures ETFs — and why the Bitcoin spot ETFs haven’t yet been approved by the SEC.
• The Maker (MKR) Governance Token: How It Works and How To Get It: Here’s how MKR — MakerDAO’s governance and utility token — works and what rights holders have.

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