Liquid staking derivative (LSD) protocols continue to ship after Shapella, memecoins surged as MEV bots run wild, and much more in our weekly DeFi roundup.
Almost two weeks after Ethereum’s latest major upgrade, Shapella, liquid staking derivative (LSD) issuers continue to ship and flourish. Cosmos-based Ethereum Virtual Machine (EVM) chain, Evmos narrowly avoids a critical vulnerability as the team fixes the bug quietly. Finally, memecoins rally on-chain as market participants enter a temporary manic phase in the markets.
Wild week! Let’s see what went down this past week in DeFi.
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Overview: Bears Take the Wheel
Total value locked (TVL) across all chains took a hit of almost 8% across the week as crypto markets tanked, driven by aggressive spot selling. Notable increases in TVL occurred on the Secret Network, likely due to the launch of ShadeSwap, a decentralized exchange (DEX) on the network.
Source: DeFiLlama
Welcome To Alpha Central
Veteran crypto developer, Taylor Monahan, shares a huge thread on a large wallet draining operation which has seized more than 5,000 ETH since December 2022 across all 11 chains. The root cause is currently unknown.
Francesco shares a comprehensive guide to EIP-4844, Proto-Danksharding, the next big milestone for Ethereum, with the completion of the Shapella upgrade two weeks ago. EIP-4844 could make fees on rollups significantly cheaper for users.
WinterSoldier dives deep to compare the designs of perpetuals DEXs: Gains Network, GMX and Synthetix.
Ethereum: Memes Mooning
Memecoins on-chain see a huge rally in the week, sending retail users scrambling to find the next coin to ape into. In the background, MEV bots run wild with sandwich attacks, with the most notable being jaredfromsubway.eth, which at one point became the 7th highest gas spender for a single day, spending 950k in gas fees on Ethereum.
CoWSwap launches partially fillable limit orders, allowing better fills on limit orders, especially in low liquidity environments where orders can be gradually filled over time. CoWSwap is known for protection against Maximal Extractable Value (MEV) attacks during transactions.
Enso Finance launches Enso V2, introducing a new DeFi dashboard to the space. Enso allows access to a range of decentralized applications (DApps) including Yearn, Curve, Aave and more, allowing one-click deployments to provide liquidity as well as bundled transactions.
ETH LSD provider, RocketPool, launches RocketPool Atlas, bringing greater efficiency to the protocol as well as higher rewards for node operators and higher rETH capacity among other optimizations.
ETH LSD platform, Asymmetry Finance, introduces safETH, a basket of LSDs, at zero additional cost to the end user. This basket will include their own flagship LSD, afETH, which will be released in the coming months.
ETH LSD issuer, Unsheth, releases new details on their updated governance model using vdUSH, which is obtained from locking their native token USH or their USH/unshETH Balancer liquidity pool token.
Stakewise discusses the road to the launch of Stakewise V3 mainnet with the Shapella upgrade finally completed. Stakewise V3 will enable greater flexibility and composability for stakers with a single LSD token, osETH.
Advanced on-chain trading protocol, Carbon DeFi, goes live on Ethereum mainnet, allowing for complex strategies such as recurring orders, arbitrage trades on pegged assets, strategies for sideways markets and more.
Compossable leverage protocol, Gearbox Protocol, rolls out a suite of security updates leading up to the launch of Gearbox V3.
Multichain DEX and DEX aggregator, KyberSwap freezes their Elastic Liquidity pools and unclaimed rewards due to security concerns. Rewards that have not been claimed are now reopened for claiming.
Bridge aggregator solution, Li.Fi Protocol, partners with insurance platform, InsurAce, to insure bridging transactions on Jumper Exchange, a bridge and cross-chain DEX by Li.Fi. The insurance pool is funded from a small fee on all funds bridged via Jumper Exchange.
Omnichain liquidity layer protocol, Entangle, drops their litepaper, covering their underlying mechanism, technologies, revenue model and the tokenomics of the ENTGL token.
Institutional decentralized credit platform, Maple Finance, introduces their Cash Management Pool, a cash management solution for institutions, decentralized autonomous organizations (DAOs), Web3 treasuries, and offshore companies.
L2s: ARB Airdrop to Protocols
Arbitrum initiates transactions for ARB token airdrop to selected protocols, beginning the distribution of 1.13% of the ARB total supply. Several protocols are in governance discussions to determine how the ARB tokens will be used.
Arbitrum top perpetuals DEX, GMX, partners with multichain infrastructure, Socket, to allow minting of the GMX Liquidity Pool token, GLP, on any of their seven supported chains.
Arbitrum-based perpetuals exchange, Vela Exchange, airdrops 50m in USDC to their users after the Vela beta was closed early due to an uncovered bug in the Vela Liquidity Pool (VLP) code.
ZkSync orderbook DEX, ZigZag, deploys on Arbitrum, bringing an intuitive Web2-like interface to the chain.
Array announces Mayfair, their first incubated project, a DEX-traded fund (DTF) issuer, which will be launching on Arbitrum and zkSync Era. The platform allows users to long or short DTFs on the platform, allowing them to play to specific sectors or narratives. The platform goes live on 30th April.
Maverick Protocol brings their Dynamic Distribution Automated Market Maker (DDAMM) mechanism to zkSync Era after launching on Ethereum last month. They are celebrating the launch with a free Maya IV NFT for qualified users.
DeFi product suite, Popsicle Finance, introduces WAGMI, a new phase for the protocol. WAGMI brings in concentrated liquidity to the platform, an expansion to zkSync Era, and a new token for ICE token holders.
Zero-knowledge EVM project, Taiko, deprecates their testnet alpha-2, recording over 1.5 million transactions over 144,000 wallets since its launch almost a month ago.
Venture capital firm, a16z, introduces Magi, a rollup client built on the Optimism tech stack developed in Rust.
SpankChain founder, Ameen Soleimani, puts up a governance proposal for the deployment of a multi-collateral fork of RAI on Optimism, known as HAI. The fork will take a range of assets as collateral including ETH, RAI, ETH LSDs and more. It is expected to launch on mainnet in July.
Avalanche: Can I Get Another Gaming Subnet?
Gaming DAO, Merit Circle, deploys their very own gaming subnet on Avalanche. Known as Beam, the subnet will bring onboard Merit Circle’s games and deployment will be restricted to whitelisted developers. The Merit Circle token, MC, will also be used as the gas token on the subnet.
Binance Smart Chain: Ultrasound CAKE
Binance Smart Chain’s top DEX, PancakeSwap, releases a new governance proposal, looking to lower the inflation of the native token, CAKE, to 3-5. The proposal seeks to improve CAKE’s tokenomics, especially with the recent launch of concentrated liquidity on the platform.
The exploiter of SafeMoon’s DEX returns 80% of BNB stolen after negotiations with the protocol. The exploit occurred three weeks ago, draining the SFM-BNB pool on the SafeMoon DEX for almost $9 million.
Cosmos: Evmos Disaster Averted
The Evmos team uncovers a critical vulnerability in the Ethermint code during the week as well. Fortunately, the bug was fixed with the help of the Cronos and Jump teams.
Osmosis introduces StreamSwap, a novel mechanism for price discovery on Osmosis. Building off the original Osmosis Liquidity Bootstrapping Pool mechanism, StreamSwap removes the need for collateral provision, protects transactions from MEV, and separates primary and secondary markets.
ShadeSwap launches on the Secret Network, bringing private DeFi to the Cosmos. The launch also brings additional liquidity pooling opportunities for users, with incentives in the SHD token for providers.
Another Week, Another Airdrop
Crypto entertainment and metaverse platform, Gala Games, announces the airdrop of the GALA V2 to GALA V1 token holders as they migrate to a new token to introduce new functionality to the token. The snapshot will be taken on 15 May and users will have to withdraw from liquidity pools and smart contracts to qualify.
Euler Finance’s compensation plans for the exploit on their platform more than three weeks ago still remains open, with more than $10 million unclaimed in the claims contract.
Arbitrum-based lending protocol, Unbound Finance, airdrops compensation to affected users of the exploit on the protocol on 13 April.
Market sinks against a backdrop of sellers and fear after a strong first quarter. Builders' shipping shows no signs of slowing however. Stay tuned for next week’s edition, and keep supporting your favorite projects, degens!
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