Omnichain interoperability protocol, LayerZero, draws criticism following the release of a wstETH omnichain token on several chains. Perpetuals decentralized exchange (DEX), dYdX, goes live as a Cosmos appchain and dominant L2, Arbitrum, launches Arbitrum Orbit.
Big week in the world of DeFi! Let’s dive deeper into what went down in DeFi this past week.
Total value locked (TVL) across all chains climbed steadily as crypto markets surge upwards against a bearish equities market. Notable outperformers include Bitcoin L2, Stacks, which saw a 74% increase in TVL and newly launched zero-knowledge Ethereum Virtual Machine (zkEVM) chain, Scroll, which saw a similar increase.
Dark pools are common in traditional markets, making up 14% of US trade volume
Privacy protocols in DeFi can help to reduce price impact of large trades, without having to trust an operator
These protocols enable private transactions, and avoid front-running and wallet tracking
Zee Prime Capital discusses wedges for new protocols: targeting a small and specific market to open the doors to larger markets in the future, rather than targeting large markets from the beginning as many crypto projects attempt to.
Case in point: Uniswap's wedge was "allowing permissionless bootstrapping of liquidity (and trading) for long-tail of tokens." This was something that centralized exchanges could not offer, but founders needed.
Meanwhile, Blur's wedge is to active traders who seek higher liquidity and lower fees, while leveraging a crypto token for incentives.
Ethereum scaling solution, Polygon, unveils the POL token deployment on Ethereum mainnet. POL will be replacing Polygon’s existing token, MATIC, to power the Polygon ecosystem. Token migration from MATIC to POL has not been announced yet but will likely occur in the near future.
Popular Ethereum DEX, Sushi Swap, releases SushiXSwap V2, their cross-chain DEX product. SushiXSwap V2 uses universal USDC, provides enhanced security to users and does not require gas token on the destination chain.
Telegram bot, Maestro, has been exploited for 280 ETH via the Maestro Router. The bug has since been identified and fixed. The team has also promised to fully refund all affected users of this exploit.
Another popular telegram trading bot, Unibot, has been exploited as well. The cause of the exploit is due to a token approval vulnerability from Unibot's new router. The exploit reportedly siphoned off $560K, and caused the UNIBOT token to crash 40%.
Other Product Launches
Dollar-cost averaging protocol, Stackly, launches on Ethereum mainnet, enabling users to easily automate token purchases on both Ethereum and Gnosis Chain. Stackly is built on maximal extractable value (MEV) DEX, CoWSwap.
ETH restaking platform, Astrid, goes live, enabling users to staking their liquid staking tokens (LSTs) to receive liquid restaked tokens (LRTs). The currently supported deposit tokens are stETH, rETH and cbETH. Unfortunately, the protocol has since been exploited, but a full refund was processed by the team over the weekend to the affected users.
Stablecoin protocol, QiDAO, launches a revamped token, which is now an omnichain fungible token (OFT), powered by LayerZero technology. Their revamped tokenomics also reduces emissions and increases synergies with the Balancer ecosystem.
ETH liquid staking platform, Swell Network, releases Super swETH, a swETH vault which enables users to earn boosted Pearl rewards and revenue from the Swell Network decentralized autonomous organization (DAO).
Multichain perpetuals DEX, Contango, launches cPerps on both Ethereum and Polygon. Contango is powered by Aave’s liquidity across their supported chains, allowing users to identify the best rates for their trading needs.
Ethereum liquid staking infrastructure, SSV Network, launches a 12 month incentivized mainnet program to encourage the decentralization of Ethereum through the use of distributed validator technology (DVT).
LayerZero launches Lido’s wstETH as an omnichain fungible token (OFT), enabling its use across Binance Smart Chain, Avalanche and Scroll. The move has drawn some flak as it is perceived as circumventing Lido’s official governance process in the deployment of their token across chains.
Arbitrum unveils Arbitrum Orbit, enabling the permissionless deployment of customized chains using the Arbitrum Orbit technology. Arbitrum Orbit also allows for smart contracts to be written in Rust, C, or C++, while maintaining compatibility with Ethereum.
Other Product Launches
No-code rollup deployer, Conduit, partners with Uniswap to release Uniswap V4 Sandbox, an OP Stack rollup which enables custom automated market maker (AMM) deployment by tapping into Uniswap’s existing liquidity pools.
Astar Network launches their zkEVM chain, zKatana, on testnet. The chain is powered by Polygon’s chain development kit (CDK) and has partnered with various protocols such as LayerZero, Pyth and Gelato in preparation for their impending mainnet launch.
Liquidity gateway, Nimbora, partners up with stablecoin protocol, Liquity, to bring zero interest borrowing of LUSD to zero-knowledge rollup, StarkNet. Do note that this product is not a Liquity product.
Creator-focused network, Frame, announces their intention to launch as an L2 on the Arbitrum Nitro stack, to take advantage of low transaction fees, high throughput and security on Arbitrum Nitro.
ETH staking solution, EtherFi, releases native staking on Polygon zkEVM, giving users the ability to stake ETH on mainnet via Polygon zkEVM. Moreover, the tokens are restaked on EigenLayer, granting the potential for additional rewards in the future.
Perpetuals DEX, UniDEX, unveils 12 custom indices for trading, enabling traders to gain exposure to specific sectors in crypto in a single trade.
Perpetuals DEX, dYdX, finally goes live with dYdX Chain, a Cosmos-based appchain, after four successful testnets. Launching as an appchain allowed the team full customization over the protocol and increased decentralization of the protocol.
Blue-chip asset bridge, Altitude DeFi, announces a surprise airdrop of one million ALTD tokens to Stargate token holders. With both protocols powered by LayerZero, the airdrop could indicate possible collaborative efforts in the future.
Fejau welcomes the bull market back with open arms, noting the strength in the BTC bid.
Stay updated on your favorite projects and stay tuned for next week’s edition, and keep supporting your favorite projects, degens!