Inscriptions hype spreads outside of Bitcoin as other layer-1s see a surge in transactions from Ordinals — check out the latest DeFi news here!
EigenLayer surpasses $1 billion in assets deposited on their platform as they raise the capacity for token deposits again this week. Inscriptions take over L2s as Arbitrum and zkSync both succumb to the congestion, resulting in downtime on both chains.
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 jump higher as markets continue moving higher, propelled by anticipation surrounding the ETF decision by the SEC. Notable outperformers include the Manta Pacific L2, which began their new points system campaign, New Paradigm, and Near, which saw renewed interest due to hype around its data availability solution.
Source: https://coinmarketcap.com/chain-ranking/
Welcome to Alpha Central
Li Jin from Variant Fund discusses the seemingly overnight wave of points-based reward systems in crypto and how to best design an effective point system.
TL;DR:
- Point morph user behavior, even if these users were already going to use the product without the point system.
- Points also change the type of users who use the app.
- Keeping ambiguity about the value of points gives apps greater flexibility on how they can be used as a customer acquisition tool.
Ethereum: EigenLayer Breaks 1 Billion in TVL
ETH restaking platform, EigenLayer, raises caps for liquid staking tokens (LSTs) to 500K tokens across all supported LSTs, while simultaneously introducing six new LSTs to the platform. The protocol has since surpassed more than $1 billion in ETH LSTs staked with them.
Other Product Launches and Updates
- DeFi suite, Frax Finance, partners up with interoperability infrastructure protocol, Axelar, to bring Frax assets to six new chains including: Osmosis, Kujira, Mantle, Linea, Manta and Scroll.
- ETH restaking platform, Renzo, arrives on mainnet, allowing users to finally natively restake ETH without waiting for the next EigenLayer cap raise while still earning EigenLayer’s restaking points and Renzo’s own restaking points.
- Composable leverage protocol, Gearbox Finance, launches their V3, bringing passive lending and margin trading with deep liquidity and no funding rates to the platform. Rewards paid in the GEAR token have also begun.
- Telegram trading bot, Unibot, and interoperability protocol, LayerZero, partner up to offer cross-chain bridging options within Unibot, enabling traders to access and trade across different chains straight from Telegram.
- DeFi credit hub, IPOR Labs, launches Stake Rate Swaps, enabling speculators and hedgers to take positions against the staking yield of Lido’s stETH, with up to 500x in leverage.
- LSDFi protocol, Prisma Finance introduces smkUSD, a liquid version of mkUSD deposited into Prisma’s Stability Pool. SmkUSD provides mkUSD depositors with a liquid token that can be utilized in other DeFi applications. Liquidations on Prisma will also be rebalanced into mkUSD, increasing the pool when smkUSD is redeemed for mkUSD.
L2s: Inscriptions Take Down L2s
Arbitrum goes down for an hour this week, due to a surge in inscriptions on the chain, inspired by similar trends on other chains such as Bitcoin and Solana. Other chains such as zkSync also fell to a similar surge in activity this week as well, but both have returned to normal operation.
Synthetix-backed decentralized exchange (DEX), Infinex, launches Infinex Accounts, allowing users to create a smart contract account, bound to their identity. Keys will be generated on-chain upon registration and will be abstracted for trustless recovery.
Other Product Launches and Updates
- Manta Network announces Manta New Paradigm, a new program to reward ETH and USDC deposits to Manta Pacific with native yield on their deposits. Users who deposit will receive their yield-bearing tokens immediately as the chain is already live.
- BitDAO-backed L2, Mantle, announces double the rewards on their liquid staking protocol, MantleLSP. The doubled rewards will begin on 22nd December with a target APY of 7.2% for a minimum of two months.
- Aori launches on Arbitrum mainnet, bringing to the chain the concept of “flash market making” to connect arbitrageurs, market makers, solvers and maximal extractable value (MEV) searchers.
Solana: Meteora x Kamino Finance
Lending protocol, Kamino Finance and dynamic liquidity protocol, Meteora, partner up to integrate each other’s products. Kamino Lend will be integrated in Meteora’s vaults while Meteora’s Dynamic Liquidity Market Maker pools will be integrated into Kamino’s new strategies.
Real-world asset (RWA) protocol, Ondo Finance, brings their two products, USDY and USDG, to Solana. USDY is a tokenized note product backed by US treasury bills while USDG is a tokenized version of Blackrock’s Short Treasury Bond ETF.
Cosmos: Liquid Staking for Celestia Now Live
Celestia liquid staking protocol, Milky Way, goes live, allowing users to stake their TIA tokens and receive milkTIA. MilkTIA can be used for liquidity provision for yield or to be used as collateral in DeFi.
Another Week, Another Airdrop
NFT-focused L2, Frame, announces their airdrop, dropping FRAME tokens to active NFT traders on Ethereum in the past two years.
ZKFair, an ETH L2 powered by Polygon and Celestia, is now live, with an airdrop to follow from their launch. The airdrop consists of two phases: the gas fee airdrop for gas spenders on the chain and airdrop to ZKFair’s community which consists of Polygon zkEVM users, users of other zk-rollups, among others.
Cosmos-based perpetual trading platform, Levana, releases the checker for the LVN token airdrop. Users who have registered prior and traded on the platform will be eligible for the airdrop.
Tweet of the Week
Awawat makes fun of ETH and ETH ecosystem coins and their recent price performance as the ETH ecosystem underperforms alt-L1 ecosystems and ETH/BTC makes new yearly lows.
Stay updated on your favorite projects and stay tuned for next week’s edition, and keep supporting your favorite projects, degens!
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