Weekly Notes 9
31-07-2023 to 06-08-2023
Developments
Tether BTC Accumulation
Tether now ranks as the 11th largest holder of Bitcoin globally, with approximately $1.6 billion worth of the digital asset. In Q1 of this year, the stablecoin issuer disclosed its Bitcoin holdings, announcing plans to invest up to 15% of its profits regularly into Bitcoin. This move is part of its strategy to shift reserves from U.S. government debt to cryptocurrencies.
On-chain analysis shows this wallet matches up with Tether’s quarterly reported BTC holdings:
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The stablecoin issuer now holds 55,020 BTC.
$10 Billion Cumulative ETH Burned
Since EIP-1559, a cumulative $10billion in ETH has been burned.
A16Z Maker Position
A16Z have finished exiting their MKR position. They sold a cumulative 14,000 + MKR over the past month. Despite the sales, MKR still rallied throughout > 100% in that time. Part of this sell pressure from Paradigm & A16Z is being absorbed by the smart engine burn which has now accumulated and LP’d ~4000 MKR.
Ondo Finance launched USDY, a tokenized note secured by US Treasuries and bank deposits. USDY pays holders a yield, initially 5% APY. This is an addition to their Short-Term US Government Bond Fund (OUSG) which now has a total TVL > $150 Mil.
GMX launch their highly anticipated v2 product. The product offers isolated GLP-like pools for assets to segregate risk. v2 allows users to trade more alts with half the maker and take trading fees as before in v1. However, a skew-based funding rate is included in v2 trades.
The current asset for trade are:
SOL, ARB, DOGE, XRP, LTC, UNI, LINK, BTC & ETH
3Pool Weightings
USDT at 60% weighting in the 3pool, notably on much lower token inflows as 3pool liquidity continues to dwindle.
Arbitrum Permissionless Validation
In their current state, Arbitrum One and Nova employ permissioned validation (fraud proof contestation) to counteract denial-of-service risks in their dispute protocols.
However, Offchain Labs announced BOLD (Bounded Liquidity Delay) today. BOLD makes validation of Arbitrum chains safely permissionless.
BOLD enables:
Fixed upper bounds on confirmation times for Optimistic Rollups’ settlement
Ensures a single honest party in the world can win against any number of malicious claims
Espresso Team’s Shared Sequencer Findings
Espresso team’s findings conclude that sequencers can enable complex features like flash loans, by ensuring transactions across different rollups are sequenced together, despite not guaranteeing atomic execution.
By utilizing a specialized "Bank" contract and crypto-economic incentives, this approach offers new opportunities for interoperability in the crypto space, but with limitations such as dependency on specific contracts and additional fees.
Frax Finance Move to Onboard T-Bills
To execute its FRAX v3 RWA asset strategy, Frax Protocol has posted a proposal with a potential mechanism to hold cash deposits and other low-risk cash-equivalent assets (including reverse repo contracts and treasury bills) using the FRAX stablecoin collateral. In order to onboard these assets Frax needs an offchain RWA manager. They have proposed to use FinresPBC.
FinresPBC facilitates the Frax Protocol's access to safe traditional financial assets on the blockchain without aiming for profits or charging fees, benefiting the public. Future plans include expanding traditional infrastructure and meeting Federal Reserve Master Account requirements.
Coinbase released their earnings for Q2, reporting a revenue of $707.9 million, surpassing the estimated $662.5 million. After hours, COIN jumped 10% higher on the news.
Michael Egorov Finds OTC For His CRV Position
Here is a summary of the counterparties to the Curve Founders CRV stake.
Base Network Public Access Launch
Coinbase announced that they will launch Base for public access on the 9th of August. An official Ethereum bridge is already live, allowing token movement between Ethereum mainnet and Base. The upcoming public release will include collaborative events and the introduction of NFT functionalities such as cb.id crypto usernames on the Coinbase Wallet.
Sei and CyberConnect join Binance Launchpool
Sei, an L1 built using Cosmos SDK, and CyberConnect, a social network protocol, have joined Binance’s Launchpool. Users can stake BNB, TUSD and FDUSD to farm SEI and CYBER.
According to a lawyer representing the bankrupt firm, Voyager Digital Holdings Inc. potentially faced a hack of user data as it reopened its crypto platform to allow customers to retrieve their funds during a court-supervised liquidation process.
FTX has confirmed plans to restart the exchange in a plan filing.
Microstrategy acquire 467 Bitcoin
In July, Microstrategy acquired an additional 467 BTC for $14.4M and now holds 152,800 BTC.
Leetswap Exploit / Sushi Launches on Base
LeetSwap, DEX on Base and Canto, was exploited for 340 ETH, worth approximately $628K.
Sushi has launched their DEX on Base with pools live for ETH/axlUSDC and BALD/ETH.
dYdX Shifting from LP Rewards to Market Maker Rebates Gains Early Support
dYdX proposal to increase market maker rebate from 0.5bps to 0.85bps, and reduce the per-epoch LP rewards by 50% from 1,150,685 DYDX/epoch to 575,342.50 DYDX/epoch has gained a lot of early support.
Curve Exploiter Returns Funds
In three transaction batches, the Curve Finance exploiter refunded a total of 4,820 alETH and 2,258 ETH to the protocol, which amounts to approximately $12.7 million in returned funds.
Trending Assets
Top 300 Performers
Top 300 Losers
Below $100M MC by performance, on chain
DMT, up 383.48, is the top performer over the past week for coins below $100M MC.
Notably, SankoGameCorp recently announced that they will be releasing an L3 (on Arbitrum) in August with DMT as gas.
Above $100M MC by performance, on chain
YGG, up 243.92%, is the top performer for coins above $100M MC over the past week, followed by OX, up 57,87% over the past week, and BITCOIN, up 52.22% over the past week.
Above $1B MC by performance, on chain
SHIB, up 13.46%, is the top performer for coins above $1B MC over the past week, followed by OP, up 6.10%.
TVL
TVL Above $10M
Over the past week:
Morpho Compound TVL grew by 186.49%.
Agni Finance TVL grew by 110.88%.
Morpho Aave v3 TVL grew by 98.65%.
Fees
Ethereum earned the highest fees over the past week, at $37.7M, followed by Lido, at $12.9M, and Tron, $8.62M.
Notably, Aave v2 fees earned are up 59.06% week on week, at $4.97M.
Governance Proposals
#AIP: 13.6 - Adjustment in Interest
Proposal to apply collateral-based interest to both CRV cauldrons. Given the current outstanding principal is $12.5M, the base interest rate would be 150%.
Lido - April Slashing Incident: Key Limit Follow-up
In April 2023, a slashing occurred involving validators operated by the RockLogic GmbH. Proposal is to see if RockLogic GmbH can resume increasing their validator count.
MIP-25: Mantle Economics Committee, and ETH Staking Strategies
Proposal to authorize the Mantle LSD and Lido ETH staking strategies, with a combined allowance of up to 200L ETH, and Lido ETH staking strategies up to an individual allowance of 40k ETH.
[GIP-66] CA side incentives reduction
Proposal to reduce Credit Account users liquidity mining rewards. This will reduce 0.196% of the supply on an annual basis, equal to $100K yearly.
[FIP - 275] Add a new market into Fraxlend on Ethereum (FRAX/WBTC)
Proposal to add FRAX/WBTC market into Fraxlend on Ethereum.
[FIP - 276] Add a new market into Fraxlend on Ethereum (FRAX/WETH)
Proposal to add FRAX/WETH market into Fraxlend on Ethereum.
AIP #13.5: Interest rate adjustment for the CRV cauldrons
Proposal to apply collateral-based interest to both CRV cauldrons. Given the current outstanding principal is $18M, the base interest rate would be 200%.
At this interest rate, the loan would be fully covered within 6 months. As principal is repaid, the base rate would decrease.
Articles / Threads
Trader Joe is now live on Ethereum Mainnet
Trader Joe has launched their concentrated liquidity AMM ‘Liquidity Book’ on Ethereum Mainnet.
Through their integration with Socket, Kwenta will now offer users use their interface to bridge to Optimism from Ethereum Mainnet, Polygon, Arbitrum & BSC rewards as OP tokens.
Aerodrome: Launch & Tokenomics
Aerodrome has announced their official tokenomics ahead of their launch on Base.
Allocation:
veAERO
Airdrop for veVELO Lockers: 200M (40%)
Ecosystem Pairs and Public Goods: 105M (21%)
Aerodrome Team: 70M (14%)
Protocol Grants: 50M (10%)
AERO Pools Votepower: 25M (5%)
AERO
Voter Incentives: 40M (8%)
Genesis Liquidity Pool: 10M (2%)
Vertex Protocol now supports stop-market orders, and will soon support all stop orders.
On-chain Limit Orders
Trader Joe has launched on-chain limit orders. Users can set automated buy or sell orders that execute with no fees or price impact. The on-chain limit orders will allow:
No reliance on external oracles
Your trades have perfect execution
Swaps with no additional fees or price impact
Complete decentralization ‘on-chain’ execution
Vertex partners with Toa Capital Partners
Vertex has partnered with Toa Capital to provide deeper liquidity on the exchange. Toa will act as a market maker on Vertex.
Protectorate development team has been working on deploying PRTC vesting contracts (which should launch this week), development of V1 and launch of flagship product NFT Capsule and oPRTC (claiming & exercising).
Perennial has launched a dedicated interface for Maker’s and LPs. LPs can pick between simplified Earn page or advanced Make page.
$WLD is live on Synthetix Perps
Synthetix is launching $WLD perpetual futures for leverage trading.
Tokenomics and Transparency Update
unshETH team has burned 2M USH from team allocation in response to vdUSH farm exploit. Additionally, team members have extended vesting period to 2 year linear vest for remaining tokens.
Conic has raised $1m from Curve founder Michael Egorov. The $1M of additional funding is held in the Conic treasury and was raised at a valuation of $17M. The sold tokens are subject to an 8 month linear vesting schedule.
Clearpool Expands To Polygon zkEVM
Clearpool is expanding Polygon zkEVM.
End-of-V1 & Looking Ahead to nftperp V2
nftperp is sunsetting V1, where they generated 281.9K ETH in trading volume ($530M) across 2,576 of wallets. V1 was paused due accrued bad debt by the protocol.
V2 will move away from vAMM and use a hybrid Fusion AMM and decentralized limit order book system.
Love reading this weekly reports, keep it up guys!
By the way, are you looking for interns to join your team?