Weekly DeFi Report — Goblin Town

  • Outperformers in the Top 100 (aside from non-UST stablecoins): TRX (-5%), LEO (+2%), MKR (+17%), XCN (+7%), GT (-11%)
  • Underperformers in the Top 100: SOL (-41%), AVAX (-44%), APE (-43%), ATOM (-43%), SAND (-41%), MANA (-44%), RUNE (-44%), GMT (-49%)
  • In what felt like ages ago, UST blew up, with first massive sell-off on Curve’s UST-3Crv pool, which led to basically a breach in trust of an algostable (not unlike what we saw with other algostables, such as ESD, DSD, Basis Cash, etc.) leading to death spiral of LUNA<>UST. Rumoured emergency raise of $1–1.5bn also fell through, and currently, the plan seems to be saving UST (debt) at the expense of LUNA (equity). The rapid minting of $LUNA from arbitrageurs also led to heightened risk of attack on the network — validators have halted the network and blockchain has halted.
  • Price action: magic internet money turned to dust, and things pretty much went to zero. After UST capitulation, market FUD shifted to USDT with USDT trading at discount, whilst USDC went to trade at a premium. Since then, market has largely stabilized.
  • Other effects: Curve transaction volume exceeded $5.8bn, setting a record for the highest single-day transaction volume in history; other algostables also suffered, with either the algostable itself (USDN) or the underlying token (FXS) taking a hit; MKR token outshined in this rout of sell-off
  • More about the pool: Lido will allocate additional 1M $LDO token for the next week in incentives to incentivize users to migrate liquidity from existing Curve and Balancer pools to a new one. stETH-ETH looping trade has gotten extremely popular (similar to MIM-UST trade), with less attack vector (Lido exploit / pool imbalance). However, amongst extreme market fear yesterday, stETH/ETH Curve pool also suffered from imbalance (66/33).
  • More about Bancor v3: Bancor is one of the oldest DEX on Ethereum, and v3 has been in the work for last 1 year
  • New features include: omnipool, single-sided staking, instant impermanent loss protection amongst others
  • Led by Ryan Watkins, former research analyst at Messari, Pangea will be running a concentrated portfolio anchored by 3–7 high conviction liquid tokens

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