New Ethereum layer-2s are set to enter the space, as Ethereum restaking protocol EigenLayer launches the second stage of its testnet. Read on to find out more in our DeFi roundup!
LayerZero drops their latest innovation for verifiable on-chain contribution and distribution via ColorTrace, centralized exchange (CEX), OKX, announces plans for an L2 chain with Polygon’s support, and EigenLayer reaches the second phase of their testnet.
Big week in the world of DeFi! Let’s dive deeper into what went down in DeFi this past week.
Overview
Total value locked (TVL) across all chains retrace slightly amidst pause regarding the ETF approvals from the SEC. Notable exceptions to the trend include Cosmos-based Ethereum Virtual Machine (EVM) chain, Evmos, and Ethereum zero-knowledge EVM chain, Manta Pacific, which both saw more than 35% jumps in TVL.
Source: https://coinmarketcap.com/chain-ranking/
Welcome to Alpha Central
Li Jin and Jesse Walden of Variant Fund discuss token distribution models and how crypto applications should go about doing so to achieve the desired results.
TL:DR:
- An opt-in, bottom-up approach to token distribution, known as progressive ownership should be adopted by applications
- Instead of using tokens to bootstrap networks and users, tokens should be used to deepen loyalty
- This creates a more targeted strategy for protocols, creating a more committed and loyal community
Crypto Koryo covers some key takeaways from observing the narratives that have taken hold of the markets for 2023 and things to keep in mind when chasing trends.
TL;DR:
- New narratives generally don’t maintain their top position for more than a month and will usually be the worst performing narrative in the subsequent months
- Sophisticated narratives such as options and privacy are rarely ever top narratives
- The strongest performer in a narrative tends to continue performing even after the narrative, as a whole, fades away
Ethereum: LayerZero’s ColorTrace and EigenLayer’s Testnet Phase 2
Omni-chain interoperability protocol, Layer Zero, unveils ColorTrace, a new method of tracing tokens from mint to their current state. In essence, ColorTrace allows the history of a token to be tracked and consequently, this can be used to reward users who participated in value accretive behaviors in the token’s history which contributed to their success.
Ethereum restaking layer. EigenLayer, opens up the second stage of their testnet rollout. Stage two allows operators to register with EigenLayer, restakers to delegate to said operators as well as for rollups to integrate EigenDA for their data availability needs.
Other Product Launches and Updates
- The Verified USD Foundation introduces USDV, a new stablecoin backed by short term treasuries and repos, built on Layer Zero’s latest ColorTrace technology, which allows protocols and ecosystems to be rewarded for contributing to USDV’s distribution.
- Perpetuals decentralized exchange (DEX), dYdX, suffers a $9 million loss from their insurance fund after a suspected manipulated move of the Yearn Finance token, YFI, resulting in liquidation gaps on the platform.
- Privacy-focused protocol, Nocturne, goes live on the Ethereum mainnet, introducing private accounts to users. Users can deposit, swap, stake and transfer funds anonymously via their Nocturne private accounts.
- OmniBot introduces OmniBotX, a tool to enable the use of any DeFi tool, from the Telegram app across any Ethereum Virtual Machine (EVM) chain, be it swaps, bridging, staking or token sniping.
L2s: Layer-2s Wars
Launched by Pacman, founder of NFT marketplace Blur, and backed by Paradigm and Standard Crypto, Blast is the newest, hottest L2 in town. In just 24 hours, over $81 million have been bridged, as speculators bet on the airdrop from Blast Points, similar to Blur's season rewards. Blast is an optimistic roll-up that claims to be the "first L2 with native yield," with ETH on Blast natively staked. Funds bridged to Blast are locked until mainnet launch sometime in February 2024.
Centralized exchange (CEX), OKX, announces their plans to launch the X1 chain, a zero-knowledge rollup on Ethereum, powered by Polygon’s chain development kit.
Intent-based DEX, IntentX, launches on Coinbase L2, Base, opening up 180 markets to perpetuals traders. IntentX boasts low fees, high available leverage and CEX-like liquidity to elevate the DEX trading experience.
Other Product Launches and Updates
- Real-world asset (RWA) protocol, Ondo Finance, introduces the Ondo Bridge, the latest tool from the protocol to bridge Ondo RWA assets between Ethereum and the Mantle L2 layer. The bridge is powered by cross-chain interoperability protocol, Axelar.
- Options protocol, Dopex, unveils their Concentrated Liquidity Automated Market Maker (CLAMM), as part of the Dopex V2 overhaul, giving users optimized yields and American-style options for traders.
- Arbitrum-based gamified DEX, SpartaDEX, goes multi-chain, integrating five new chains. Additionally, they are introducing no-risk initial DEX offerings (IDOs), which gives users up to a week to decide if they wish to withdraw funds deposited for IDO as long as they do not claim their tokens earlier.
- DeFi suite, Trader Joe, suffered frontend attack, resulting in swaps being redirected to a malicious address. The frontend has since been secured and affected users are advised to open a support ticket on the Trader Joe Discord server.
Solana: Real Estate Perps and JLP Collateral
Parcl introduces their tokenized real-estate trading platform, enabling users to trade perpetual futures on synthetic real-estate assets across 21 real-world real estate markets via a unified and scalable liquidity pool.
Money market protocol, Kamino Finance, launches Kamino V2, enabling yield-bearing kTokens to be used as collateral, thereby increasing the composability of said tokens. Additionally, they have also integrated the JLP token from DEX aggregator, Jupiter Exchange, as collateral on the platform.
Avalanche: JPM x Avalanche
JP Morgan’s Onyx blockchain, Apollo Global Management and Avalanche partner up under Project Guardian to link Onyx with the Avalanche Evergreen subnet, enabling the on-chain subscription and redemption of WisdomTree Prime funds.
Another Week, Another Airdrop
The PYTH airdrop from oracle network, Pyth, will be open for claims on 20th November 2023, with the claims page being open for 90 days until 18th February 2024. Users with eligible activity on applications supported by Pyth will be eligible for the retrospective airdrop.
Tweet of the Week
Factorydoge reminding us that the Ethereum pump is cursed, as the market fails to break higher again with price continuing to trend sideways.
Stay updated on your favorite projects and stay tuned for next week’s edition, and keep supporting your favorite projects, degens!
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
