Weekly DeFi Index
The market capitalisation and volatility indices grew slightly by +0.69% and +0.12% respectively, while the volume was negative at -4.20%.
- MakerDAO (MKR) has decided to disable borrowing against Wrapped Bitcoin (WBTC) and reduce its vault debt ceilings to zero. This move follows concerns over WBTC’s custodian, BitGo, transferring control to a joint venture involving BiT Global and Justin Sun, whose reputation has raised security concerns. Current WBTC positions remain unaffected for now. Other DeFi platforms like Aave are also considering alternatives like tBTC.
- Aave (AAVE) reached a new all-time high with 40,000 weekly active borrowers. This growth is driven by new lending markets like Base and Scroll. Aave’s total value locked (TVL) has increased by 70% this year and now stands at US$11.85 billion.
- Curve DAO (CRV) founder, Michael Egorov, proposed a request for 21 million CRV tokens (~$6.3 million) to support the development of Curve Finance. The proposal has sparked debate due to lack of clarity on fund utilisation and potential impact on the DAO’s financial sustainability.
Chart of the Week
Trading volume on Solana decentralised exchanges (DEXes) continues to fall for the third week since the week of 29 July. Last week, it also marked the largest week-on-week drop by 35%. Volume on Pump.fun and Raydium plunged by 26% and 19%, respectively. Additionally, Solana Exchange-Traded Products (ETPs) experienced a record outflow of $39 million from the week of 12 August to 16 August, according to CoinShares.
The drops may have resulted from a sharp decline in trading volumes of meme coins, on which Solana heavily relies.
News Highlights
- Cronos Labs launched the Cronos zkEVM Alpha Mainnet, a Layer-2 blockchain on Ethereum powered by ZKsync technology. This network is part of a collaboration involving Matter Labs, Crypto.com, and others. The zkEVM uses $zkCRO as its gas token and features innovations like native account abstraction and a secure Ethereum bridge. It aims to enhance user experience with features like gasless transactions and simplified onboarding.
- EigenLayer introduced permissionless token support, allowing any ERC-20 token to be used as a restakable asset. This upgrade aims to expand the range of assets in EigenLayer, attracting more validators and enhancing security across decentralised networks. The feature is live on the testnet and set for mainnet deployment soon.
- Arbitrum DAO approved an ARB staking proposal that introduces a liquid staked ARB token, stARB, to enhance governance and utility. It aims to address token utility issues and improve security by incentivising active delegation and staking. The new system will use surplus sequencer fees to reward stakers and implement a Karma Score – measured by a combination of Snapshot voting stats, on-chain voting stats, and forum activity – for delegate eligibility. This initiative seeks to increase ecosystem participation and protect against governance attacks.
- Optimism Foundation reverted to permissioned fraud proofs after community audits discovered vulnerabilities in its permissionless system, including two high-severity issues. To address these, a hard fork named “Granite” is scheduled for 10 September. The decision was made to ensure network stability and security, although no user assets were at risk.
- Tether launched its USDT stablecoin on the Aptos blockchain. This integration aims to leverage Aptos’ scalability, providing users with low gas fees for transactions.
- Solayer Labs launched its Solana restaking protocol on the mainnet, marking the start of Solana’s restaking era. Initial Asset Verification Systems (AVSs) include Bonk, AltLayer, and others. This development aims to enhance Solana’s staking ecosystem.
Recent Research Reports
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- Research Roundup Newsletter [July 2024]: We present to you our latest issue of Research Roundup, featuring our deep dives into latest crypto market sizing, L2 Interoperability and Web3 Socials.
- Alpha Navigator: Quest for Alpha [July 2024]: Cryptocurrencies showed mixed performance in July, Fixed Income was up while Equities were down. US, EU maintain interest rates; UK cuts rates while Japan hikes rates for the second time since 2007.
- Crypto Market Sizing Report H1 2024: Global crypto owners reached 617 million by the first half of 2024.
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Recent University Articles
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Ethereum’s Prague/Electra Upgrade — What to Know About ‘Pectra’ |
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| Ethereum’s Prague/Electra Upgrade — What to Know About ‘Pectra’ |
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- What Is a Short Squeeze and How Does It Affect Bitcoin?: Short squeezes happen when a heavily shorted asset climbs in price. Here’s how they play out on Bitcoin and other cryptocurrencies.
- Ethereum’s Prague/Electra Upgrade — What to Know About ‘Pectra’: The Prague/Electra upgrade, Pectra for short, is slated for late 2024 and set to be a transformative milestone for Ethereum. Here’s what to expect.
- What Is Degen (DEGEN) and How to Buy DEGEN: Discover how Degen, a cryptocurrency developed to bridge the gap between online contributions and real-world value, is transcending its meme coin origins.
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