Weekly DeFi Report: Terra Reincarnated

Summary

Risk sentiments turned sour over the last 2 days in crypto, as BTCETH broke down below trend line, and bitcoin dominance broke above 46 (highest since Oct’21). This is despite risk assets enjoying a strong bounce (both S&P500 and NASDAQ each rising by more than 2%) with FOMC meeting minutes released was not as hawkish as feared. The breakdown in BTCETH hints crypto- native funds turning bearish, and alts generally underperformed BTC and ETH. Rather important piece of news in the last 7 days is Ethereum merge potentially happening in August.

In the last 7 days:

Out-performers in the Top 100:

TRX (+8%), XMR (+11%), ETC (+7%), XCN (+52%), AAVE (+4%), FTM (+3%), LUNC (+6%), CELO (+4%)

Under-performers in the Top 100:

AVAX (-27%), EGLD (-22%), MKR (-22%)

In the DeFi space, TVL numbers are mixed across chains but largely in line with underlying token prices. Tron (+32%), Fantom (+2%), Aurora (+9%) have seen increase in TVL, whilst Avalanche (- 12%), WAVES (-12%), DFI (-10%) have seen biggest drops in their TVL. In terms of activities, headlines and actual activities are very muted as market activities/developments subside during bear market.

Deep Dive

Terra Prop 1623 passes

What’s Prop 1623: proposal to create a new Terra chain without the algorithmic stablecoin. The old chain will be called Terra Classic, while the new chain will retain the name of Terra — the new LUNA tokens will be airdropped across UST and LUNA holders based on snapshots. The new Terra chain is expected to go live on Saturday. Interestingly, Terra’s wallet is excluded from the airdrop address, raising eyebrows on how the company might be able to incentivize growth in the new ecosystem.

Exchange support: Exchanges including Binance, FTX, Crypto.com, Huobi, Bitfinex, Bybit, etc. are expected to support Terra 2.0 and the airdrop

Dopex introduces interest rate options vaults

More about the vault: the first vault is for MIM3CRV interest rate, and the vault allows users to write interest rate options that would enable users to hedge/punt on underlying interest rate, with up to 500x leverage.

Following

Big Money Raises

A16z raises $4.5bn crypto fund
More about the raise:
“we think we are now entering the golden age of crypto” with massive wave of world-class talent entering crypto. Crypto Fund 4 will provide $1.5bn in seed financing and $3bn in venture funding; Web3 gaming, DeFi, zero-knowledge proofs, decentralized social media, are amongst the fund’s areas of focus

Standard Crypto raises $500m crypto fund, which will invest in both equity and crypto

Starkware raises $100M Series D at $8bn valuation

Adam Neumann’s Flowcarbon raises $70M private token sale round led by a16z More about Flowcarbon: the project aims to provide crypto-based carbon credits to offset pollution from corporates by putting carbon credits market on the Celo blockchain. The native Goddess Nature Token (GNT) is backed by carbon credits certified by Verra, one of the 4 market-recognized registries.

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