Weekly DeFi Index

This week’s market cap, volume, and volatility indices were negative at -7.35%, -10.76%, and -42.16%, respectively.

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DeFi Index Tokens

News Highlight

Ethereum’s The Merge took place on 15 Sep, as the network shifted seamlessly to proof-of-stake. Hardware-based miners were replaced by validators who stake ETH to process transactions and create new blocks.
Ethereum Co-founder Vitalik Buterin shared his vision for layer-3 protocols. Different from layer-2 solutions that focus on scaling Ethereum, layer-3 will provide “customised functionality”. On his blog, he gave the example that applications would utilise ZK proofs to submit privacy-preserving transactions to layer-2.
Compound Treasury, a cash management service for institutions powered by the Compound Protocol, launched a new feature that allows institutions to borrow USD or USDC with fixed rates using digital assets as collateral. Bitcoin, Ethereum, and supported ERC20 assets can be used as collateral and the rates start at 6% APR.
Wintermute, a crypto algorithmic market maker based in the UK, was hacked. The attacker drained around US$160 million worth of over 70 different tokens from the company’s DeFi operations. The company’s OTC and centralised finance operations were not affected. Blockchain cybersecurity company Certik commented that a vulnerable private key generated by the Profanity app was exploited. The defect has been known since at least January.

DEX Protocols Metrics

Sources: CoinGecko, DeFi Llama, Nomics, Crypto.com Research

Lending Protocols Metrics

*LDR (Loan to Deposit Ratio) = Total Borrowed / TVL
Sources: CoinGecko, DeFi Llama, Crypto.com Research

Charts on Layer-2 Projects

The overall L2 market displayed a downtrend in the last week as its TVL dropped by -4.72%. Optimistic rollup projects dropped by -4.30% and zero-knowledge rollups decreased by -3.69%. But they outperformed Ethereum, as its TVL decreased by -7.08%.

The TVL changes for all major optimistic rollup projects were negative last week, and Metis Andromeda declined the most at -8.30%, followed by Boba Network at -6.46%.

ZK rollup projects maintained its downtrend since July. Almost all ZK rollup projects’ TVL fell except Loopring (+0.71%), and ZKSpace plunged most at -35.87%.

Further Reading

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21 Sep 2022|MARKET UPDATES

DeFi & L1L2 Weekly (21/09/2022)

Ethereum completed The Merge, and Vitalik Buterin shares his vision for layer-3. Compound Treasury launched borrowings for institutions. Crypto market maker Wintermute hit by US$160M hack.

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