Weekly DeFi Index
This week’s market cap, volume, and volatility indices were positive at +11.98%, +62.24%, and +28.10%, respectively.
Chart of the Week
Ethena Labs launched its USDe stablecoin on the public mainnet on 19 February. The stablecoin is an Ethereum-based synthetic dollar collateralised with ETH and corresponding short futures positions. One of its features is staking; users staking USDe receive sUSDe, which offers a high annual percentage yield (APY) of up to 27.6% — significantly surpassing other yields in the market. Since its launch, Ethena’s USDe has grown its market cap to nearly US$500 million, with about 222 million USDe staked to date.
However, the community raised concerns about USDe’s yield rate and the sustainability of such high yields, especially with regard to the potential risks related to yield inversion and bear market scenarios.
- Uniswap’s governance token UNI surged by 60% following a proposal by a Uniswap Foundation leader to potentially revamp the protocol’s decision-making process and fee mechanism. The proposal aims to distribute protocol fees among UNI holders who stake and delegate tokens for improved governance. On top of this, it recently launched new features — a browser extension, limit orders with predefined timeframes, and a data and insight platform with real-time trade information — as part of its ongoing efforts to build a more seamless approach to swapping tokens.
- Sushi (SUSHI) is set to launch a new decentralised derivatives platform named Susa on the Ethereum Layer-2, Layer N. Susa will leverage Layer N’s Nord Engine to facilitate thousands of transactions in under one millisecond, to rival centralised exchanges in performance.
News Highlights
- Crypto.com entered into a strategic agreement with BTG Pactual, the largest investment bank in Latin America. The partnership aims to further advance crypto banking services across the region. As an initial focus, Crypto.com will enable the listing of BTG DOL, BTG group’s proprietary stablecoin with a 1:1 parity with the US dollar.
- Ethereum developers confirmed that the Ethereum Dencun upgrade was “successfully activated on all testnets” and on track for mainnet deployment on 13 March at 13:55 UTC. In line with this, they urge node operators to upgrade their clients before the Dencun upgrade activates on the mainnet.
- On their latest All Core Developers call, Ethereum developers agreed to include EIP-6110, EIP-7002, and EIP-7549 in the Pectra upgrade, which is the next upgrade after Dencun. EIP-6110 seeks to embed validator deposits directly into the Execution Layer, simplifying the deposit process, and EIP-7002 introduces a method for validators to exit the beacon chain using 0x01 withdrawal credentials. Additionally, EIP-7549 seeks to enhance the efficiency of Casper FFG clients by excluding certain committee information from consensus votes.
- Decentralised storage protocol Arweave launched the public testnet of its “hyper parallel computer” AO, a scalable blockchain network built on its data storage platform. The AO computer is a decentralised, actor-oriented machine that emerges from a network of nodes adhering to a core data protocol. It is designed to offer an environment where an arbitrary number of parallel processes can coordinate through an open message-passing layer, allowing for the creation of sophisticated applications requiring extensive data handling and computational resources.
- Polygon and StarkWare have collaborated to introduce Circle STARKs, a new cryptographic proof system aimed at enhancing transaction speed and cost efficiency within Ethereum’s ecosystem. It is specifically designed to accelerate the proving process for rollups, ultimately enhancing their scalability and efficiency.
- Days after moving from Aave, DeFi risk manager Gauntlet shifted to Morpho, a rival decentralised lender. Aiming for increased earnings and flexibility, Gauntlet said this move can create its lending products using Morpho’s model, which offers a more efficient risk management approach compared to Aave.
- Frax Finance is considering a proposal to share protocol revenue with stakers of its veFXS token, following Uniswap’s lead in rewarding token holders who stake and delegate their UNI tokens with a portion of fee earnings. If approved, it would allow users who lock their FXS to receive veFXS tokens, enabling them to retain utility and governance rights while potentially benefiting from shared protocol revenue.
- StarkWare revised its token emission schedule following community backlash. Initially, 13.4% of the STRK token supply was set to unlock on 14 April. However, this was changed to just 0.64%, representing a drastic reduction in the amount released.
- New activities are underway in the EigenLayer ecosystem. It recently partnered with community-owned AI network Ritual to build AI-powered decentralised applications. VC firm a16z also announced it has invested $100 million into the restaking protocol.
- Avalanche encountered a significant outage on 23 February, failing to produce blocks for over four hours after releasing a software upgrade for Avalanche nodes that disabled logic, which led to an “excessive amount of gossip” between validator nodes. Ava Labs speculated that the issue could also be “related to a new inscription wave” that launched on the network an hour prior to the outage.
Recent Research Reports
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| Alpha Navigator: Quest for Alpha [January 2024] | Research Roundup Newsletter [January 2024] | Crypto ETFs |
| Alpha Navigator: Quest for Alpha [January 2024] |
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| Research Roundup Newsletter [January 2024] |
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- Alpha Navigator: Quest for Alpha [January 2024]: Fed signals rate cut in March unlikely. Asset class performance was mixed in January, with crypto and equities up slightly.
- Research Roundup Newsletter [January 2024]: We present to you our latest issue of Research Roundup, featuring trending market insights in January, charts of the month, and our deep dive into the world of crypto ETFs.
- Crypto ETFs: This report explores what crypto ETFs are, providing an overview of the current crypto ETF market and looking into how they work as investment vehicles. Plus, we explore their features, significance, advantages, and drawbacks.
Recent University Articles
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| What Is Ethereum’s EIP-4844 Update? How Proto-Danksharding Can Reduce Gas Fees | How to Calculate ROI for Crypto | What Is CDCETH and How Does It Work? |
| What Is Ethereum’s EIP-4844 Update? How Proto-Danksharding Can Reduce Gas Fees |
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| How to Calculate ROI for Crypto |
| What Is CDCETH and How Does It Work? |
- What Is Ethereum’s EIP-4844 Update? How Proto-Danksharding Can Reduce Gas Fees: Learn about Ethereum’s Cancun-Deneb upgrade, a major protocol update to reduce gas fees and enhance scalability through Proto-Danksharding.
- How to Calculate ROI for Crypto: What is crypto ROI? Learn how to calculate ROI for your crypto assets and use it as a tool to evaluate the performance of your investments.
- What Is CDCETH and How Does It Work?: CDCETH allows liquid staking for ETH with Crypto.com. Here’s why this can earn you more rewards than traditional staking.
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