Check out our weekly roundup packed full of DeFi tweets, news and alpha you don't want to miss out on — as protocols continue to ship amidst the consolidation of the recent rally.
This week saw the bullish market trend take a breather as traditional markets soured the mood. But needless to say, the show must go on and builders must keep building.
A handful of lending protocols all around shipped new features, the Cosmos ecosystem saw an uptick in activity across various protocols and a new tool, Proof-of-Innocence emerged to protect Tornado Cash users.
Let’s see what went down this past week in DeFi.
Overview: Consolidation Amidst Volatility
The Total Value Locked (TVL) across all chains remains relatively flat across the week but as prices see increased downward volatility due to drag from the traditional equities market. The weekend, however, brought a new surge in asset prices, sending TVL slightly higher. Notable increases included Canto and Ronin, with percentage increases in the 20s, as their tokens received continued interest. Optimism (OP) also saw significant TVL increase as the OP reached a new all-time-high.
Source: Defillama.com
Ethereum: Lending Protocols Take the Stage
Compound launched Compound WETH III Markets, allowing Coinbase Wrapped Staked ETH (cbETH) and Lido Staked ETH (stETH) to be used as collateral, with collateral factor of 90% and a liquidation threshold at 93%. This greatly increases the ability to use ETH Liquid Staking Derivatives (LSDs) in DeFi. Just a day after the launch, cbETH vaults are already at maximum supply!
Multichain lending protocol, Aave, gets the go-ahead for the deployment of Aave V3 after a successful DAO vote. Aave V3 is now live on Ethereum allowing High Efficiency Mode, Isolation Mode, and gas optimizations across the platform.
As part of their 2023 roadmap, Sushiswap’s “Head Chef” Jared Grey announces an upcoming perpetual-focused decentralized exchange (DEX) on Sei Network. Sei is a DeFi-focused chain currently in testnet.
Lending protocol, Maple Finance, shelves their under-collateralized lending business model to bring real-world yields on-chain in a collaboration with centralized yield provider, AQRU. Maple Finance had gone into significant bad debt in November 2022 with the collapse of FTX.
Venture builder, Chainway, launches a “Proof-of-Innocence” tool, allowing users of decentralized crypto tumbler, Tornado Cash, to prove that funds received were not obtained via illicit sources.
DAI Stablecoin issuer, MakerDAO, allocates $100 million to Yearn Finance to generate yield on its large treasury after a successful proposal vote.
L2s: Still Powering Through
Gains Network begins their $100,000 Trading Contest on Arbitrum this week with prizes for the top 50 traders. In the same week, Gains Network also saw themselves on the Token Terminal leaderboard of highest earning protocols in the past 7 days.
Perpetual decentralized exchange, dYdX, shocks investors by announcing a push back of the long anticipated token unlock of 150 million dYdX tokens from February 2023 to 1st December 2023. DYDX token went up by over 30% since the announcement.
Transactions on optimistic roll-up, Optimism, falls almost 70% with the conclusion of the Optimism Quests. Optimism Quests were a set of tasks on Optimism to orientate new users to protocols on the chain. Most users also participated in hopes of qualifying for the final leg of the Optimism token airdrop, which explains the rapid decline in activity.
Treasure DAO launches MagicSwap, a one-stop automated market maker (AMM) which allows ERC-20 tokens and NFTs to be traded through the same platform to support their bustling gaming ecosystem.
Zero-knowledge Ethereum Virtual Machine (zkEVM) protocol, Scroll, has officially produced 1 million blocks in their Pre-Alpha Testnet.
Umami Finance releases a proposal for a potential collaboration with collateralized debt position (CDP) stablecoin platform, Abracadabra Money, to increase yield opportunities for their users.
Solana: LSD Incentives Inbound
Solana LSD platform, Marinade Finance, passed a governance vote to allocate $160 million worth of Marinade tokens over the next 12 months to incentivise activity in the ecosystem and boost TVL.
Options vault platform, Friktion, shuts down their platform putting vaults into “Withdrawal-only” mode from 25th January 2023 onwards. The team cites high costs as the main reason for this decision.
Cosmos: A Bustling Universe
Canto continues to capture the spotlight, with total volumes on DEXs on the chain surging past 63m in a single day. This puts Canto past Solana and right on the heels of Avalanche.
Injective also shines bright this week, injecting (pun intended) $150 million into the chain for development of their ecosystem in a move backed by several large venture capital firms.
Sommelier Finance hops on the “real yield” bandwagon, bringing them to the Cosmos ecosystem. Sommelier optimizes between liquidity provision and lending across Uniswap, Compound and Aave to maximize yields for depositors.
Another Week, Another Airdrop
Data analytics and wallet visualizer platform, Arkham Intel, expands to support Polygon and Avalanche this week. Arkham will be airdropping their token, ARKM, to users as part of their referral program, when the token launches.
Formerly on the Terra blockchain, Mars Protocol will be launching on 31st January 2023, with airdrops going out to users who held the MARS token on the Terra Classic chain.
Juicy, Juicy Alpha!
Thor Hartvigsen on 20 small DeFi protocols that he’s got his eyes on, covering a range of protocols including real-world yields, ZK roll-ups and many more!
If NFTs and DeFi had a kid, it would be NFTFi. DeFi Investor is back with hot alpha on the NFTFi thesis and the projects that he’s watching.
A guide to understanding Account Abstraction by Cami from Fuel Labs, for everyone who is not as tech-inclined to understand one of the more complicated topics to hit mainstream crypto lately.
An astute observation of the steady increase in stablecoin supply over the past week by Dogetoshi, which could signal a continued rally in the broad crypto market.
The bullish trend could be taking a breather, but the builders are certainly not. Innovation continues to sprout across all chains in various forms. Stay tuned for next week’s edition and keep supporting your favorite builders, degens!
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