DeFi & L1L2 Weekly (08/02/2023)

Ethereum testnet processes first ETH staking withdrawals. Lido unveils V2 upgrade, to focus on new staking router and ETH staking withdrawals. Optimism Foundation proposes Bedrock upgrade.

Weekly DeFi Index

This week’s market cap, volume, and volatility indices were positive at +7.14%, +18.77%, and +77.10%, respectively.

• Trader Joe has integrated with LayerZero to convert its native token, JOE, into an omni-chain, fungible token. This move will enable users to seamlessly move JOE across supported networks like Avalanche and Arbitrum, and is expected to lessen security issues associated with communication methods across blockchains.

News Highlights

• On 7 January, Ethereum’s Zhejiang testnet successfully processed simulated withdrawals of staked ETH for the first time. The next testnet upgrade, Sepolia, is scheduled in the next few weeks, followed by Goerli.
• Ahead of Ethereum’s Shanghai upgrade, Lido unveils details of its next upgrade, which includes features focused on Ethereum staking withdrawals and a new staking router. 
• Optimism Foundation proposes Bedrock, its first protocol upgrade that proposes to completely rewrite the core components of Optimism’s architecture and aims to “offer a new level of modularity, simplicity, and Ethereum equivalence for Layer 2 solutions.” 
• The Uniswap community proposed to deploy its V3 to BNB Chain, and is currently voting on whether the protocol should use Wormhole or LayerZero bridge to do so. The proposal has come under further scrutiny after VC firm a16z rejected the proposal and used about 15 million of its UNI tokens to vote in favour of LayerZero.
• Following a recently completed community vote, Aave approved a proposal to distribute Lido staking rewards across Ethereum, Arbitrum, and Optimism.
• Decentralised exchange CoW Swap recently suffered an exploit, with over US$180,000 worth of funds in DAI, BNB, and ETH reportedly stolen. CoW Swap said in a tweet that it has mitigated the issue and user funds are not at risk.

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