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Top ETH liquid staking derivative (LSD) issuance protocol, Lido Finance, deploys Lido V2, enabling the highly anticipated staked ETH withdrawals from the platform. Perpetuals decentralized exchange (DEX), GMX, puts out their V2 as well, on testnet, allowing users to test out the synthetic asset trading on the platform. Finally, teams around the Cosmos come together to work on mesh security for the ecosystem.
Pretty eventful week! Let’s see what went down this past week in DeFi.
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Overview: No Bull, No Bear — Only Crab
Source: DeFiLlama
Total value locked (TVL) across all chains remained largely flat as crypto markets crab along, with majors largely trading flat across the week. Nevertheless, zero-knowledge Ethereum Virtual Machine (EVM) chains continue to see healthy growth, especially Polygon zkEVM which saw a 300% rise in TVL, likely due to airdrop rumors. ZkSync Era and StarkNet saw healthy increases as well in the 15% range.
Welcome to Alpha Central
Flywheel DeFi covers all on upcoming updates and catalysts for stablecoin issuer, Frax Finance, including their upcoming governance upgrade, frxETH V2, Frax Educator Incentives Program and more.
Seth weighs in on hardware wallet, Ledger’s new feature: an opt-in feature which allows for seed phrase recovery. The feature has divided the community, with many feeling betrayed by Ledger and others feeling the outrage is overblown.
Alex dives into the upcoming Litecoin halving which is slated to roll out in ~70 days, the psychology behind halvings and the need for Litecoin.
New Order DAO explores the game theory of memecoins, the meme cycle and the factors leading up to memecoin mania.
Ethereum: Lido Withdrawals Live
Top ETH LSD protocol, Lido Finance, launches Lido V2 after successful on-chain governance vote in the prior week, finally enabling the long awaited withdrawals of ETH from the platform.
Cryptocurrency tumbler, Tornado Cash, suffers a governance attack over the week, with the bad actors granting themselves an overwhelming number of governance votes, through which they have drained the protocol’s staked TORN tokens.
Asymmetry Finance goes live, together with their flagship LSD product, safETH. SafETH is a basket of rETH, sfrxETH and wstETH, with the current yield sitting between 6-7%.
Origin Protocol releases OETH, an ETH LSD yield-aggregator, seeking to optimize yields for ETH LSD holders. OETH accepts ETH, stETH, rETH and frxETH as collateral to receive OETH. OETH optimizes for yield across LSDs and liquidity pools, accruing rewards directly to the user’s wallet via rebasing.
Stable asset protocol, Reserve protocol, launches high-yield USD (hyUSD), a high-yield savings product with an estimated 8% yield, obtained from Convex and Flux DeFi stablecoin liquidity pools.
The highly anticipated Curve Finance stablecoin, crvUSD frontend goes live, a week after the successful redeployment of the crvUSD contract. Currently, sfrxETH is supported as collateral for crvUSD, with stETH in line to be supported next as collateral.
AladdinDAO drops the whitepaper for f(x) Protocol, a decentralized product involving a low volatility “floating stablecoin” fETH, that changes in value by a fraction of ETH’s price movement. This token is stabilized by f(x) protocol’s other token, xETH, a zero-cost levered long ETH position to absorb the ETH price volatility.
Multichain yield-farming protocol, Harvest Finance, releases Harvest V3, bringing a slew of improvements to the protocol, including allowing liquidity pooling with any token, a mobile-friendly interface, more supported farms and better liquidity pool position tracking.
The decentralized autonomous organization (DAO) behind the impermanent-loss (IL) protected liquidity pooling protocol, BancorDAO, has been served with class-action lawsuit over its IL protection claims, which the plaintiffs allege IL losses of almost 50% of their original investment during a period in June 2022.
Gravita Protocol reaches mainnet, enabling the GRAI stablecoin to be borrowed against WETH, ETH LSDs, rETH and wstETH, and bLUSD. The current minting caps of $1.5 million have been hit for bLUSD, wstETH and rETH collaterals.
L2s: Aevo on Fire With Back-to-Back Launches
On-chain options trading platform, Aevo, launches Aevo OTC enabling options with weekly, biweekly and monthly maturities, on the top 13 most popular coins for the month. In the current rotation, coins like SUI, PEPE and APT are available. Aevo’s perpetuals trading was also launched in the same week giving traders ETH perpetuals with up to 20x leverage.
Block Trade goes live on the Loopring L2, giving users access to centralized exchange (CEX) liquidity but from the safety of their self-custodied wallet. Market makers run the backend on a CEX and on Loopring’s DEX to enable this feature.
Pendle Finance yield-booster, Equilibria announces their initial DEX offering (IDO), with the whitelist sale beginning 22nd May. In the same week, they also released the tokenomics for the EQB token.
Lending protocol, Compound Finance, deploys Compound V3 on Arbitrum, opening up for ARB, GMX, WETH, and WBTC to be used as collateral to borrow USDC
Arbitrum-based money market protocol, Timeswap, relaunches USDC and ARB pools, offering fixed rates of 25% on ARB deposits and 15% on USDC deposits.
Arbitrum USDs issuer, Spearax, and Camelot DEX partner up to launch Spearax’s Demeter farms on Camelot. Rewards will begin accruing starting on 25th May and stakers of Sperax’s governance token, SPA, can vote to direct emissions to the new pools then.
GMX-style perpetuals DEX, Vela Exchange, introduces Hyper VLP 2.0, allowing Hyper VLP participants from their beta launch to return to their original reward tier from during the beta. Additionally, this update also grants additional esVELA rewards for the next 12 months to the first 30 million VLP minted.
ETH LSD issuer, Unsheth, initiates plans to expand to Arbitrum after a successful community poll on Twitter.
Synthetix improvement proposal (SIP) 2021 is up, proposing for the addition of wstETH and stETH perpetuals on Synthetix.
Avalanche: GMX V2 Live on Avalanche Fuji
Avalanche top perpetuals DEX, GMX, goes live with GMX V2 on the Avalanche Fuji testnet, introducing synthetics, isolated markets, reduced open interest (OI) skew and the much-awaited Chainlink oracle integration to the platform.
Multichain DEX, Trader Joe, sunsets vote-escrowed JOE (veJOE), as the DEX moves towards a emissionless DEX model, which would make veJOE irrelevant since it was originally designed to direct protocol emissions to liquidity pools.
Polygon: Concentrated Liquidity, Now on Balancer
Gains Network announces gTrade v6.3.2 which introduces borrowing fees in place of funding fees. The upgrade seeks to increase protocol efficiency, enable better risk management for the platform and better scaling as whole through supporting increased OI without requiring more TVL on the platform.
Concentrated liquidity pools are now available on weighted automated market maker (AMM), Balancer. The pools are designed by Gyroscope Protocol in collaboration with Lido Finance, with the first supported pool being stMATIC-wMATIC.
Aave V2 on Polygon uncovers a bug in their latest upgrade, which rendered almost $120 million in tokens locked on the platform. A fix is currently in the works and up for governance vote.
Capital efficient credit protocol, Atlendis V2 launches on the Polygon network, with fiat on-ramp platform, Banxa, opening the first lending pool with $2 million in USDT.
Cosmos: Mesh Security Incoming
Osmosis, Akash, Axelar and Atom Accelerator join forces to announce the Mesh Security initiative. Mesh security is a model in which appchains secure each other in a multilateral manner, allowing new appchains to quickly bootstrap security.
Cosmos-based EVM chain, Kava deploys their Kava 13 upgrade. The upgrade brings improved performance to the chain via node architecture optimizations as well as introduces seamless bridging between the Cosmos and Kava, among other improvements.
Trading-focused Cosmos chain, Sei Network, teases the imminent launch of the Sei Mainnet.
Perpetuals DEX, dYdX, dives deep into their protocol architecture for their upcoming dYdX v4 launch as a Cosmos appchain. In the same week, they also proposed more subDAOs to manage the protocol better
Algorithmic market making protocol, Elixir, integrates with finance-based chain, Injective, to bring their liquidity to the chain.
Another Week, Another Airdrop
Airdrop hunter, Olimpio, discusses his airdrop strategy for the zkEVM chain, Scroll, which is currently still in testnet.
Argent continues with Week 3 of their StarkNet Xplorer missions, this time requiring users to make a swap on StarkNet DEX, JediSwap, which can also be done within the Argent wallet itself.
Price action stays flat across the market, almost boring even. But builders keep the fire alive and the momentum strong. Stay tuned for next week’s edition, and keep supporting your favorite projects, degens!
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