Weekly DeFi Report

2022–04–22

Summary

Strong open in the market was met by day-long selling pressure in the US equity market yesterday.

With risk under pressure, crypto didn’t fare well as well, but still within a broader trading range. Bitcoin penetrated the 50dma ($42k) and reached a weekly-top of $43k on Thursday, followed by a pull back to $40k, the level traded a week ago.

For the last 7 days, BTC was flat (+0.23%) while the average funding rate was slightly negative (- 1.98%).

• Outperformers in the Top 100: LUNA (+16%), TRX (+12%), XMR (+23%), APE (+16%), RUNE (+10%), EOS (+10%), ZEC(+16%), GMT (+45%),
• Underperformers in the Top 100: DOGE (-5%), NEAR (-4%), KLAY (-5%), WAVES (-9%), HNT (- 10%), MKR (-7%), CHZ (-6%)

In the DeFi space,

• In terms of networks: Biggest gainers in TVL were Terra (+12%), Avalanche (+5.5%), Tron (+5%), and Near (+18%), whilst Fantom (-6%), Waves (-7%) saw the largest fall in TVL.

Next up: deep dive

L2 War Heats up

• What’s the deal: there’s been on-going rumours that some of L2 projects, most notably Optimism and Arbitrum, would be soon launching their tokens — the rumour was intensified when Coinbase showed price page for Optimism (despite the token not existing yet). A few days ago, Optimism also published a blog post titled “A New Chapter”, also hinting on potential token launch. Token prices of L2-related projects, such as Synthetix and Lyra have rallied in anticipation of token launch. Will L222 (Layer-2 2022) be real?

Algostable War Heats Up

• What’s the deal: They say imitation is the greatest form of flattery — multiple L1s are taking a page out of LUNA/UST seigniorage playbook, introducing their native stablecoins. Most recently, Tron’s founder, Justin Sun, announced that Tron would be launching a decentralized algostable called USDD, in which Tron’ native token TRX will be used to help the USDD stablecoin stay pegged to the stablecoin along with $10bn of crypto as collateral. Tron DAO will administer a reserve for the stablecoin with a 30% interest rate. Market is looking at what the $10bn of crypto collateral will be comprised of. USDD will be available on Ethereum and BNB Chain when launched via the BitTorrent network’s crosschain protocol. Other protocols that introduced their native algostables include Near Protocol (yet to be launched) and Waves (which blew up). It remains to be seen how other decentralized stablecoins such as DAI, FRAX, UXD will fare in face of these new challengers.

Beanstalk $181mio Exploit

• What is Beanstalk: credit based stablecoin protocol
• What’s the exploit: malicious governance proposal was pushed through by a flash loan, and the attacker then voted to transfer all the assets to himself. The exploit netted the attacker $181mio, but the attacker only kept $76mio, and even donated 250k USDC to Ukraine Crypto Donation (…). Since the exploit, the team doxed themselves and moved to fix immediate hole by moving to centralized multi-sig governance mechanism. They will also be going through Trail of Bits audit commencing in June.
• For more details on the exploit, refer to this coverage.

Yeti Finance Goes Live

• What is Yeti Finance: decentralized borrowing protocol built on Avalanche. Most notably, Yeti allows users to borrow against LP tokens, staked assets, and base assets at 0% interest rate

Kadena ($KDA) announces $100M grant program for web3 developers

• What’s the deal: jumping on the bandwagon of L1s aggressively deploying their treasury warchest to attract developers and liquidity, Kadena announced $100m grant program for Web 3 developers. The grant applications will be evaluated based on technical strength, experience of teams and usefulness of the projects to the Kadena ecosystem. Kadena has briefly captured people’s attention in Q4 of last year, with its unique position as a PoW, yet scalable blockchain. However, since then, interests have largely faded with no significant dApps deployed on its blockchain.

Aptos Labs x Google Cloud

• What’s the partnership: Blockchain startup Aptos Labs (L1 started by former Meta employees) partnered with Google Cloud in a move that will allow companies and developers to build more easily on its network — it’s the first time that Google has opted to support a L1. Through the partnership, anyone can power a node on the Aptos network via Google Cloud.

Following: Big Money Raises

Flipside Crypto raises $50M at $350M valuation, led by Republic Capital, with participation from Galaxy Digital, Terra, Hashkey, etc.

• What is Flipside: on-demand analytics tool for blockchains. Flipside currently partners with several blockchains, including Terra, Flow, Algorand, Solana, and Osmosis

Bastion raises $9m in Series A funding, led by 3AC, with participation from FTX Ventures, Jump Crypto, Jane Street, CMS, Crypto.com

• What is Bastion: lending protocol on Aurora blockchain (EVM-compatible subnet of NEAR blockchain)