Weekly DeFi Report — Goblin Town
Absolute bloodbath yesterday as aftermaths of CPI number and LUNA<>UST debacle weighed down on market sentiments. BTC went to the lows of ~$25k, whilst ETH went to low of $1,700. Bitcoin realized 2nd heaviest losses in history. Market has since recovered to levels of $30k and $2,080 respectively, but general sentiment is leaning towards selling the rip given still elevated funding premiums. Layer 1 trade has been unravelling for the last 1–2 weeks, with many L1 tokens down >80% from their ATH. $NEAR stands out for holding well, but with big supply overhang, it’s unlikely to outperform.
In the last 7 days:
- 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 the DeFi space, all chains are massively down in terms of TVL, with the most affected AVAX (-42%), FTM (-50%), CRO (-41%), and of course LUNA (-97%).
UST Bites the Dust
- 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
Lido deploys additional Curve stETH-WETH pool
- 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).
Bancor 3 launch
- 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
Following: Big Money Raises
6th Man Ventures is raising $145mio for a second crypto fund
- Led by Ryan Watkins, former research analyst at Messari, Pangea will be running a concentrated portfolio anchored by 3–7 high conviction liquid tokens
SPiCE VC announce $250m SPiCE II fund launch for blockchain investment with particular focus on institutional investors and the Dubai region
Fasanara kick off fundraising for a new $350m VC fund, the UK-based asset manager will focus on investing in fintech and crypto asset companies
Kucoin raises at $10bn valuation, following its Series A in Nov’18 when it raised $20m at a $100m valuation
Talos raises $105m in Series A; the crypto trading infrastructure firm’s fundraising was participated by TradFi names, such as Citigroup, Wells Fargo, BNY Mellon, DRW, SCB 10x, etc.
Binance Labs invests in pSTAKE