DeFi & L1L2 Weekly (01/11/2023)

Ethereum devs confirm Dencun upgrade ruled out for 2023. Arbitrum Orbit is now officially mainnet-ready. Lido DAO raise concerns over LayerZero’s unapproved wstETH bridge rollout.

Nov 01, 2023 DeFi Weekly

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The real-world asset (RWA) tokenisation race is intensifying. Tokenised versions of US Treasuries grew sevenfold year-to-date, with the market surging to US$704 million from around $100 million at the start of the year. Protocols on the Ethereum and Stellar networks lead in the value of Treasury tokens on-chain, reaching over $300 million in market capitalisation each.

Outside treasuries, further innovations are enhancing the RWA narrative. This past week, European clearinghouse Euroclear unveiled Digital Securities Issuance (D-SI), a service which facilitates the issuance, distribution, and settlement of fully digital international securities. Developers of meme coin Floki also launched its RWA tokenisation platform TokenFi, allowing users to launch any cryptocurrency without writing code. 

Learn more about RWA tokenisation in our research report: Real-World Assets: Bringing Real-World Value to DeFi Tokenised Treasuries Market Cap DeFi Index Token Performance

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News Highlights

  • Ethereum core developers confirmed that the anticipated Dencun upgrade will not be implemented in a network hard fork before the end of 2023. They are currently working through problems with the next suite of upgrades featuring EIP-4844, and have pointed to “consistent consensus issues” on the ten developer networks (devnets) that have been spun up to test the upgrade as the main reason. 
  • Ethereum scaling solution Arbitrum Orbit is officially mainnet-ready, allowing developers to create their own chains that will settle onto one of Arbitrum’s Layer-2 chains, such as Arbitrum One, Arbitrum Nova, or testnets Arbitrum Goerli or Arbitrum Sepolia. 
  • Polygon launched its new token, POL, which will underpin its forthcoming revamped staking layer. The migration process from the old MATIC token to the new POL token has been initiated, and several prominent DeFi dapps have integrated Polygon’s migrator contract into their protocols, including CoWSwap, ParaSwap, and Kyber Network.
  • LayerZero rolled out its wstETH bridge, allowing users to seamlessly move Lido’s wrapped stETH tokens between Ethereum, Avalanche, BNB, and Scroll. However, LayerZero’s bridge deployment without Lido DAO’s permission has caused a backlash, with some Lido DAO members voicing concerns that the DAO is being strong-armed into approval.
  • The Starknet Foundation allocated 50 million STRK tokens to a new Early Community Member Programme (ECMP) to incentivise early developers and contributors to help build the network. The application process for ECMP runs through 19 November; however, the allocated tokens will be locked until at least next April.
  • Interchain Foundation, the core developer of Inter-Blockchain Communication (IBC) protocols, announced that Landslide — the team developing the IBC light client on Avalanche — will launch its incentivised testnet on 1 November. The development will pave the way for seamless interoperability between Avalanche, Cosmos Hub, and over 100 other IBC-enabled chains.
  • Blockchain infrastructure firm Fireblocks identified and assisted in addressing an Ethereum ERC-4337 account abstraction vulnerability in the smart contract wallet, UniPass. The vulnerability, which was found in hundreds of mainnet wallets during a white hat hacking operation, could have allowed a potential attacker to carry out a full account takeover of the UniPass Wallet by manipulating Ethereum’s account abstraction process. 
  • Unibot, a Telegram-based trading tool, confirmed that it was hit by a token approval exploit that resulted in the theft of approximately $580,000 worth of crypto from users. Investigations are ongoing while Unibot tries to contain the issue, and it stated that funds lost will be compensated.
  • Solana introduced Firedancer, its second validator client developed by Jump Crypto, which has officially launched on the testnet. Firedancer aims to improve the throughput within the Solana network by reducing latency times and to achieve scalability by rewriting each component of the Solana architecture. In its performance demo, it showcased about 1.08 million transactions per second (with ~1kB transaction size) off just four CPU cores, surpassing Solana’s recommended 12-core setup. 

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We’re all ears.

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Research and Insights Team


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