LD Capital Track Weekly Report [11/09/2023]
[Summary]
Lending: Venus announces the Prime plan aimed to incentivize the pledging of XVS tokens. The plan is expected to launch in Q4.
LSD: Last week, the ETH staking rate rose to 22.16%, up 0.44% from the previous week. 26.59 million ETH were locked in Beacon Chain, corresponding to a staking rate of 22.16%, a week-on-week increase of 0.44%. Active validator nodes amounted to 787,600, up 1.94% week-on-week, while validator nodes in queue decreased by 21.35% to 39,200. This week, the ETH staking yield was about 3.80%.
Ethereum L2: Layer2 TVL decreased by $230 million from the previous week, with the total locked amount being $9.4 billion. BaseTVL volume is approaching Zksync Era. The ecosystem actively arranges its position, announcing the first six investments from the Base ecological fund, joining the Tokenized Alliance (TAC), and Circle launching native USDC on Base and OP Mainnet.
DEX: Dex combined TVL is $11.74 billion, unchanged from last week. Dex’s 24-hour trading volume is $1.38 billion and the 7-day trading volume is $9.5 billion, down $2.5 billion from the previous week. The trading volume is sluggish.
Derivative DEX: The trading volumes for the major Derivative DEXs in the past two weeks were $6.4 billion and $4.8 billion, respectively. The trading volume shrank again, returning to the year’s lower range. After the sharp falls of BTC and ETH on August 18, the market entered a lateral oscillation downward trend. DYDX still leads in trading volume with $2.8 billion for the week, followed by Synthetix with $790 million, Vertex with about $490 million, and GMX with a mere $150 million, suffering the most significant contraction.
[Lending]
Venus: Venus, the top lending protocol on the BSC chain, announced the Venus Prime plan. Eligible XVS pledgers have the opportunity to obtain the bound token called Prime Token, which provides specific market boost rewards. The plan aims to incentivize XVS pledging.
Eligibility criteria:
• Non-Retrospective OG Prime Token:
1) Users need to lock XVS for 12 months.
2) Use Venus lending market at least once a month within a year.
• Retrospective Prime Token:
1) Pledge at least 1,000 XVS for a minimum of 90 days within a cycle. Tokens will be awarded after the pledge period.
2) If users decide to withdraw XVS and the pledge amount is less than 1,000, the Prime Token will be destroyed.
Prime Token rewards come from the protocol’s revenue. The lending protocol’s revenue = borrowing fees paid — depositors’ deposit returns. Based on token terminal data from the past year, Venus’ monthly income can reach about $1 million in good scenarios, but in less favorable scenarios, monthly income is only $200,000.
Radiant, ranked second in lending protocols on the BSC chain, is deployed on both Arbitrum and BSC. Radiant’s monthly income is currently stable at around $1 million. Comparing the two, Venus’s income is average, and the added benefit from the Prime plan might be limited.
[LSD]
Last week, the ETH staking rate rose to 22.16%, up 0.44% from the previous week. 26.59 million ETH were locked in the Beacon Chain, corresponding to a staking rate of 22.16%, a week-on-week increase of 0.44%. Active validator nodes amounted to 787,600, up 1.94% week-on-week, while validator nodes in queue decreased by 21.35% to 39,200. This week, the ETH staking yield was about 3.80%.
The growth rate of ETH staking has slowed
Ethereum (ETH) Staking Yield This Week: 3.80%
Of the three major LSD protocols in terms of price performance, LDO decreased by 6.4% this week, RPL decreased by 11.5%, FXS decreased by 9.4%;
From the perspective of ETH staking volume, Lido increased by 1.04% this week, Rocket Pool increased by 1.19%, Frax increased by 0.51%.
Currently, the balance of the Rocket Pool deposit pool stands at 17,744 ETH, with an RPL staking rate of 48.92%, an effective staking ratio of 92.01%, and a considerable number of nodes needing additional collateral. This week, focus is on the third mainnet launch meeting of SSV, where the third phase of SSV mainnet launch will introduce partner-staked ETH. As SSV network’s TVL (Total Value Locked) starts to rise, the protocol begins to capture revenue. Frax V3 has entered the code auditing stage, with the specific launch date not yet announced.
[Ethereum L2]
TVL (Total Value Locked) on Layer 2 decreased by $230 million compared to last week, with a total locked amount of $94 billion.
Cancun Upgrade Progress
On September 7, 2023, Ethereum core developers held the 117th All Core Dev Consensus (ACDC) conference call.
1) Regarding Dencun Testing, developers are continuing tests on Devnet #8 for the Cancun/Deneb (Dencun) upgrade. Ethereum Foundation’s DevOps engineer, Barnabas Busa, indicated that Devnet #8 remains stable and healthy. At this meeting, the release time for Devnet #9 was postponed by one week to Tuesday, September 19th.
2) Nimbus (CL) client developer, Etan Kissling, is working on upgrading Ethereum’s data structure to a new serialization format called SSZ. This new format essentially combines all the advantages of the previous formats and can also be reused for other purposes. He named this upgrade approach “StableContainer” and formatted it as an official Ethereum Improvement Proposal (EIP).
3) The Holesky testnet will launch this Friday, September 15th.
Base
The growth rate of TVL has slowed down, with a weekly increase of 2.35%. However, the total TVL is now approaching that of the Zksync Era.
1) Earlier this year, the Base ecosystem fund, led by Coinbase Ventures, was launched to invest in the next generation of on-chain projects based on Base. On September 8th, the Base ecosystem fund announced its first six investments from over 800 applications: Avantis, BSX, Onboard, OpenCover, Paragraph, and Truflation.
Avantis is a synthetic derivatives protocol based on oracles, allowing users to trade cryptocurrencies and real-world assets with up to 100x leverage. Users can also earn returns by providing USDC liquidity as market makers.
BSX is building a decentralized limit order book, enabling users to leverage long and short positions.
Onboard provides a chain-native, self-custody route for users to transfer cryptocurrencies peer-to-peer through their MPC wallets and smart contracts.
OpenCover is the first L2 insurance aggregator in collaboration with underwriters like Nexus Mutual, protecting DeFi users from on-chain risks such as smart contract hacks and oracle failures.
Paragraph is an on-chain creator platform that assists creators in publishing, sharing, and building businesses around their content, leveraging permissionless protocols to amplify growth and profit potential.
Truflation is an on-chain financial oracle, compiling data from over 18 million points and more than 40 data sources in real-time, offering automated and independent daily inflation reports.
2) Circle has launched native USDC on Base and OP Mainnet.
3) Base has joined the Tokenized Asset Coalition (TAC), an alliance aiming to promote the adoption of public blockchains and asset tokenization, addressing inefficiencies in traditional finance and paving the way for a blockchain-native financial system. Coalition members include Aave, Centrifuge, Circle, Coinbase, Credix, Goldfinch, and rwa.xyz.
Arbitrum
In the past week, Offchain Labs withdrew 2.279 million ARB from Binance, equivalent to approximately $2.07 million, at an average price of $0.91. Since August 23rd, a total of 5.367 million ARB has been withdrawn from Binance, valued at approximately $5.07 million, with an average price of $0.94.
Starknet
1) On September 5th, Starknet announced the deployment of version V0.12.2 on the mainnet. This version includes key upgrades to enhance the network’s performance and reliability, as follows:
Enabled P2P authentication through a new endpoint, which can sign based on state differences.
Resolved some mismatch issues that might arise between pending blocks and pending state updates.
Increased the maximum steps for a single transaction from 1M to 3M.
Improved the maximum throughput and TPS, enhancing the overall speed and scalability of the network.
2) On September 6th, Starknet stated that its entire core stack has been open-sourced, including the Full Node, Execution Engine, Sequencer, and Prover.
On-chain Activity
[DEX]
Combined Dex TVL: $11.74 billion, unchanged from last week.
Dex 24-hour trading volume: $1.38 billion. 7-day trading volume: $9.5 billion, a decrease of $2.5 billion from last week, indicating a sluggish market trading volume.
Ethereum
ETH L2/sidechain Ecosystem
BTC L2/Sidechain
Alt L1
[Derivative DEX]
Over the past two weeks, the trading volume of major derivative DEXs were $6.4 billion and $4.8 billion respectively. The trading volume has once again shrunk, returning to the yearly low. After the sharp decline of BTC and ETH on August 18th, they entered a sideways consolidation downward trend. DYDX remains the leader in trading volume at $2.8 billion weekly; followed by Synthetix with $790 million; Vertex at approximately $490 million; GMX had a weekly trading volume of just $150 million, experiencing the most significant contraction.
The overall TVL of derivatives DEX (Decentralized Exchanges) is still in a declining state, with funds slowly flowing out.
On the User Front, the daily active user count for derivatives DEX continues to decline. GMX boasts a daily active user count of 500, making it one of the protocols with the highest number of active users. While Synthetix and Vertex have trading volumes higher than GMX, their daily active users are only about half of that of GMX. dYdX has not disclosed its number of daily active users, but according to its disclosed report for the 26th epoch (28 days), the number of users depositing collateral during this period was 1,932, which is a 12% decrease from the previous cycle.
Project Progress:
• dYdX releases its biannual report
The dYdX Foundation has released its biannual report, stating that the current focus remains on enabling the dYdX DAO and preparing for the release of the open-source software for dYdX v4 (dYdX chain).
Regarding the progress of dYdX v4, on August 23, 2022, dYdX Trading Inc. announced the dYdX protocol’s entry into milestone 4 of dYdX v4. According to previous plans, v4 has a total of 5 milestones. Milestone 4 corresponds to the public testnet phase, where anyone can become a staking node of the dYdX chain and participate in verification. Milestone 5 will see the official launch of the dYdX chain. Approximately 57 validators participated in dYdX Trading’s v4 public testnet #2. The current public testnet has a block production time of 1.8 seconds, with over 2.9 million transactions and over 2.9 million token bindings.
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